Coming on the heels of Elliott Management blasting the Argentina’s government for not negotiating, the government will officially begin negotiations with the holdout creditors on July 7 in New York.

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Statement of Argentina’s Economy Ministry on the negotiations

In a statement released on the Argentine Economy Ministry’s website, a translated copy of which was provided to ValueWalk, read: “The Ministry of Economy reports that he is has appointed a delegation to meet the aforementioned official (Daniel Pollack) on July 7. Thus, Argentina reiterates its vocation for negotiation of fair, equitable and legal conditions covering the interests of 100% of the creditors, which means promptly allow cash to the bondholders restructured in the due course.”

Pollack is the New York attorney Judge Griesa named last week to oversee negotiations between Argentina and the holdout creditors.

The news of the July 7 meeting came shortly after a leading creditor holdout, Elliott Management, blasted Argentina in a statement reported on CNBC’s web site.

“Argentina’s professed willingness to negotiate with its creditors has proven to be just another broken promise. NML is at the table, ready to talk, but Argentina has refused to negotiate any aspect of this dispute,” Jay Newman, senior portfolio manager at Elliott, said in a statement Monday (NML is a unit of the firm).

“There are no negotiations underway, there have been no negotiations, and Argentina refuses to commit to negotiations in the future. Argentina’s government has chosen to put the country on the brink of default. We sincerely hope it reconsiders this dead-end path.”

Argentina’s settlement could be a rocky one

The path to a settlement could be rocky as emotions and the terse words that often follow have been flowing freely between Argentina and the “vulture hedge funds,” as they have been called.  In a Bloomberg View column yesterday Matt Levine offered four additional options.

Scheme 1: Default, then settle using CDS money: This would involve Argentina missing the grace period by one day, defaulting on its exchange bonds and curing the default by paying interest the following day then announcing a settlement “with Elliott and friends.” The key is to trigger a legal default on the bond payment so as to trigger the insurance contracts written against such an event.

Elliott owns credit default swap protection

Levine notes that it is widely assumed that Elliott owns credit default swap protection to the tune of nearly $500 million. With this default, the CDS insurance would be triggered, Elliott would get a payout from the poor sap that sold the swap protection (likely a big bank) and then Argentina would negotiate down the difference between what the swap protection insurance paid and the balance owed. Levine notes that “any settlement probably involves giving Elliott new bonds, and a default does nothing good for the value of those bonds.”

Scheme 2: Nondefault default:  As Levine notes “This scheme involves Argentina sending money to its paying agent, and then saying, ‘what? We paid, it’s not our fault if the U.S. payment system didn’t get the money to the holders.’”

This solution is appears as just a game of three card monte and eventually the house of cards will come tumbling down because creditors want their money.

Scheme 3: Pay by check: This is another scheme to avoid payment through the Depository Trust Company that manages the bonds. “The other problem here is that holding certificated notes is a big pain for the holders: They’re harder to trade, to repo, to finance, everything. So if your goal is not to hose the exchange bondholders, making them hold certificated notes, even if you could do it, doesn’t seem great,” Levine writes.

Scheme 4: Forced wire transfers: In this scheme, according to Levine, Argentina “paid” that money by telling its central bank to electronically credit some dollars to The Bank of New York Mellon Corporation (NYSE:BK)’s account at the central bank. “And BNY Mellon, in violation of the indenture but in accordance with a New York court order, didn’t send the money on to the exchange bondholders.”  This could be a “fun” little shell game but again might just be a delay tactic to the inevitable.

In the end, Levine notes, “a quick settlement here would be good for Argentina, and probably at least as good for Elliott. But it would be good for America too.”