Argentina will have to decide whether it’s going to pay more than $1.3 billion demanded by bondholders led by Paul Singer’s Elliott Management or default on its debt yet again, now that the US Supreme Court rejected its appeal without comment, reports Brent Kendall for The Wall Street Journal.

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Holdouts want 2001 debts paid in full

The case goes back to Argentina’s historic 2001 default on $80 billion in debt and the deal that it offered to bondholders at the time: accept new bonds worth $0.30 on the dollar or walk away with nothing. More than 90% of bondholders went along with the deal, but a few holdouts refused hoping to force full payment down the line.

Those holdout bondholders have since argued that Argentina has a legal obligation to treat its various bondholders equally, and that because payments are being processed within the US the courts have the right to order those payments to be distributed to original bondholders. This tactic neatly avoided the issue of seizing Argentine assets and found support first in a US District court and then in the Second US Court of Appeals. The US Supreme Court’s decision to leave those rulings in place means that Argentina doesn’t have any other options within the judicial system.

Argentina testified that it would respect the court’s ruling, but memo raises doubts

But that doesn’t mean Argentina is entirely out of options. A confidential memo was leaked earlier this month from the law firm Cleary Gottlieb Steen & Hamilton LLP arguing that Argentina’s “best option” in the event of losing at the Supreme Court would be to default again and then restructure the debt outside the US. As long as both the restructuring and future payments were handled outside the US, then the courts wouldn’t have the jurisdiction to get involved.

Argentina has said that it will abide by the Supreme Court’s ruling and that it has no intention of defaulting, but it also argued that the current setup “would seem to be obligating Argentina to default, because none of the intermediate agreement options resolve the dilemma created by the courts when they gave each one of the holdouts the right to interrupt payment to the rest.”

After so many years and so much rancor, Elliott Management and other holdouts are unlikely to rest easy until payments actually start to flow.

A spokesman for Elliott Management declined to comment.