I should've been clearer, I'm all over the place today and didn't finish my thought. I was referring to the "vulture funds", https://en.wikipedia.org/wiki/Argentine_debt_restructuring#B... who went a little further than that. Here's something from the linked article:
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Upon default, Argentina's bondholders sued to be repaid 100% of their bonds' face value.[6][20][21] Among the bondholders were vulture funds, who had speculatively acquired US$1.3 billion of the bonds' total value on the secondary market for cents on the dollar after the 2001 default.[5][22] Vulture funds also owned a large quantity of credit default swaps (CDS) against Argentine bonds. This created a further incentive to not only trigger a default against Argentina; but also to undermine the value of the bonds themselves, as the CDS would pay out at a higher rate if the defaulted bonds decline to extremely low values.[22]
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Actually the whole Argentina situation has helped evolve how sovereign debt is issued. Argentina's bonds lacked what is called a collective action clause which allows the bonds of all bond holders to be restructured if a predetermined percentage of the bondholders vote for a voluntary restructuring. It was further complicated by the fact that the swapped bonds had a clause that said that granted them most favored nation status if there was any further restructuring.
That entry is extremely opinionated and does not necessarily reflect reality in all cases. The part on CDS "incentives" highly depends on what CDS and bonds owned (a lot of CDS in this case used as a hedge) and a lot of people lost a lot of money on bad trades involving both.
You can call the vulture founds, but the facts of the matter is that the original owners would rather recover some of their money, for sure, than lose all of them, and that they have somebody to sell to means ultimately lower borrowing prices for everybody.
" Upon default, Argentina's bondholders sued to be repaid 100% of their bonds' face value.[6][20][21] Among the bondholders were vulture funds, who had speculatively acquired US$1.3 billion of the bonds' total value on the secondary market for cents on the dollar after the 2001 default.[5][22] Vulture funds also owned a large quantity of credit default swaps (CDS) against Argentine bonds. This created a further incentive to not only trigger a default against Argentina; but also to undermine the value of the bonds themselves, as the CDS would pay out at a higher rate if the defaulted bonds decline to extremely low values.[22] "