Citigroup Tells Appeals Court of Its Argentina Quandary
Citigroup has found itself in an awkward position: It must decide between defying a New York court order or a sovereign government, a move that it says would result in “grave sanctions” from Argentina.
“We’re going to obey, and if we obey, we have a gun to our head and the gun will probably go off,” Karen Wagner, a lawyer representing Citigroup, said.
Standing before a three-judge panel of the United States Court of Appeals for the Second Circuit, Ms. Wagner argued that the bank would suffer “serious and imminent hazard” if it obeyed a ruling from United States court judge that blocks it from making payments to bondholders.
Court’s decision prevents Citigroup’s Citibank Argentina branch from transferring $5 million in interest payments to bondholders by Sept. 30. Ms. Wagner appealed to the court to extend that payment deadline.
Citigroup is just one of a growing collection of disgruntled investors and financial institutions that have been dragged into a messy battle which has put Argentina’s president Cristina Fernandez de Kirchner against a group of entrenched New York hedge funds.
Judge Barrington Daniels Parker, Jr. complained about Argentina’s track record of defying United States court orders.
“We have a party that will not conform itself to the law,” Judge Parker said.
In a move that could put it in contempt of court, Argentina last month passed a new law that would allow it to evade Judge Griesa’s court order, replacing the Bank of New York Mellon with Argentina’s Banco de la Nacion.
Ms. Raggi, who was the most vocal of the three judges, told Carmine Boccuzzi, a lawyer for Argentina, “If you win I know you’ll be happy to abide by the court’s order.”
Source: NYT- Citigroup Tells Appeals Court of Its Argentina Quandary
