Two hedge funds that won lawsuits against Argentina in New York have requested information from Judge Loreta Preska about the country’s Central Bank, intending to seize gold reserves after they were sent abroad.

The funds’ proceedings revolve around the argument that Argentina’s Central Bank is an “alter ego” of the state — a legal term meaning that it does not constitute a separate entity.

The Bahamas-based Bainbridge Fund won a lawsuit against Argentina in 2023 for US$95 million of debt securities that were defaulted in 2001. Bainbridge has started a discovery process in Preska’s New York court. In an October 2 written presentation, the fund requested information on the country’s gold reserves. In July, after the leader of Argentina’s bank workers’ union made a public information request, Economy Minister Luis Caputo confirmed that the Central Bank had moved at least part of its gold overseas, calling it “a very positive move.”

Caputo said the gold would generate returns, but he did not specify how much gold had been sent, to which bank, or the kind of operation. Since the gold was moved abroad, some analysts warned that hedge funds in international litigation against Argentina could........

© Buenos Aires Herald