This whole situation arises from a clause in the bond restructuring deal that was common when it was made. If the exchange deal had a collective agreement claus

This whole situation arises from a clause in the bond restructuring deal that was common when it was made. If the exchange deal had a collective agreement clause, this would have been over 10 years ago, and contracts today normally have that clause (that if the majority of the bond holders accepts, the minority has to accept as well). I am willing to bet that the whole reason the new clause became common, was because of Argentina's or Congo's case with default swaps and hedge funds that exploit that loophole intro a 10000% profit lawsuit. Irresponsible spending is something that brought Argentina to its defaults, but not to the situation its now facing. The change in courts and terms are not part of the original default debt, but of the default swap in 2005: before that, Argentina didnt have to answer to the US supreme court for those bonds or to a hedge fund. When Argentina had economic recovery, and wanted to get rid of debt, it proposed a default swap bonds, at a discount rate. To make the deal appealing to bond holders and give trust to it, they proposed the US courts as a trustable mediator. 93% of the debt was restructured this way, and has given hefty returns, up to 77cents on the original bond dollar. However, the remaining debt is all owned by the hedge fund, whose entire strategy is the pari passu clause. Without it or with a collective clause, this situation would not happen, and the debt on these bonds would have been done and over.