Wednesday, September 24, 2014

Argentina/US: Update--CitiBank, on Buenos Aires' Behalf, Offers to Make Payment Before 9/30/14

According to The Latin American Tribune, US District Court Judge Thomas Griesa, who is hearing the case between Argentina and US hedge funds on debt bonds outstanding since 2001, has scheduled a new hearing this week on the case.

The hearing which will take place on Friday (September 26) has been convened at the request of Citibank, whose lawyer, Karen Wagner, wrote to Griesa requesting a clarification issued by the protocol for the funds blocked by the judge.

Wagner argues that the blocking of funds has caused the bank a legal incompatibility between Argentine and US regulators.

COMMENT: After the decision made by Argentina in June to pay bondholders of the restructured debt, Judge Griesa froze the funds on grounds that if they were made effective, the country would be in contempt of court for not respecting the payment order to those who did not accept the exchange, calling them “vulture funds.”

Citibank obeyed the order, but Argentina argued that such bonds were issued according to local laws and cannot be blocked by the United States, threatening to sanction the bank if the payment was not made effective before September 30.

Citibank and Argentina took the issue to the Court of Appeals, whose panel of three judges returned the case to Griesa’s court, saying the appeal was not within their competence.

The judge has asked CitiBank to submit documentation before the hearing substantiating their request for the release of the bond payment.

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