Billionaire Holds Navy Ship Hostage

Oct 26, 2012 2:40pm
ap la libertad jef 121026 wblog Billionaire Holds Navy Ship Hostage

The three-masted ARA Libertad, sits docked at the port in Tema, outside Accra, Ghana, Oct. 20, 2012. (Gabriela Barnuevo/AP Photo)

So you’re a super-rich American investor and a large South American country owes you $1.6 billion, which it refuses to pay in full.

You can take a partial settlement that others have taken – which reportedly would get you just 30 cents on the dollar – or you could do something a little more drastic and, say, seize a high-profile naval vessel belonging to the offending country. What do you do?

Such was the real-world problem facing billionaire Paul Singer before he decided on option B, and his company convinced a small African nation to seize Argentina’s Libertad frigate.

As reported by Bloomberg.com, the ship’s seizure is the latest salvo in a standoff between Singer, a hedge fund kingpin and one of the largest GOP donors this election season, and the government of Argentina. The two have been locked in a global dispute over the reported $1.6 billion debt claim that resulted from the country’s nearly $100 billion default a decade ago.

Caught in the middle this time is the historic frigate ARA Libertad and the West African nation of Ghana. The stately, three-mast ship was seized three weeks ago after it docked in Ghana, where a local court ruled the ship could be held on behalf of NML Capital, a subsidiary of Singer’s investment group, Elliot Management Corp. More than 300 Navy sailors stayed with the ship until the Argentinean government ordered them to abandon it earlier this week. They returned home Thursday.

Top Argentinean officials have reportedly accused the Ghanaian government of violating rules of diplomatic immunity and likened NML Capital’s actions to a “vulture fund” involved in international extortion.

In a “Braveheart”-worthy declaration earlier this week, Argentinean President Cristina Kircher said on national television, “They may keep our frigate, but not our freedom.”

Argentina’s Foreign Minister, Hector Timerman, said Thursday he was confident the nation would get its ship back without negotiating with NML Capital, noting that such seizures had happened before – an astounding 28 times.

Today the Buenos Aires Herald listed several notable seizures including the grounds of the Argentinean ambassador’s residence in the U.S. in 2004 and the president’s private jet in 2007. Each were eventually returned. The frigate is estimated to be worth just 1 percent of the outstanding debt, Bloomberg reported.

As ABC News previously reported, Singer has made a name for himself in the high-dollar game of political donations. He has donated millions to Republican candidates in the last two election cycles but his most important role may be as a “bundler” for Presidential candidate Mitt Romney. He helped Romney raise $5 million with a single Manhattan fundraiser in May.

INTERACTIVE: 25 Wealthy Political Donors Who’ve Given Millions in 2012

Bloomberg reported the Libertad’s sailors were flown out of Ghana on a French commercial jet. Apparently the Argentinean government was afraid that if any Argentinean assets were sent to retrieve them, they too would be seized.

A call for comment on this report from Elliot Management Corp were not immediately returned. Representatives for NML Capital, which is listed on its website as being based in Cyprus, also did not immediately return after hours requests for comment.

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus