The government of President Cristina Fernández de Kirchner is now playing a high-stakes game of chicken with the holdouts. The group says they're open to a compromise that would allow Argentina to avoid yet another default.
Argentina is worried that a deal with the holdouts could trigger billions of dollars in additional claims. The country's government also insists it doesn't have enough time to reach a fair resolution.
So far, the two groups appear to be making very little progress in the court-mandated negotiations. A court mediator, Daniel Pollack, said Thursday that Argentina had declined to enter direct talks with the holdouts, which include several American hedge funds.
NML Capital, one of the holdout hedge funds, said in a statement that Argentina had shown a "total lack of willingness" to solve the problem.
"Argentina's government made clear that it will be choosing to default next week," NML said. "Argentina again refused to negotiate any aspect of the dispute. Instead, its representatives simply stated that no solution was possible."