forbid Citi to pay anyone, even though NML concededly has no right to block payment on non-Exchange Bonds

"Oh Dear Me No, I Couldn't Possibly Hear Another Appeal..."

posted by Mark Weidemaier

The Second Circuit has refused to hear Citibank's appeal of Judge Griesa's order enjoining Citi from making payment on USD-denominated, Argentine-law bonds. The Second Circuit's order is a bit... Delphic. Weighing in at all of 56 words, not counting citations, the court simply "decline[d] to find jurisdiction" because the district judge's order "is a clarification, not a modification" of the injunction. The distinction seems a bit fine, given the stakes. Recall that some USD-denominated, Argentine law bonds are Exchange Bonds (and thus subject to the injunction) while some are not. But it seems that it is impossible to tell them apart. Two options, then: (1) forbid Citi to pay anyone, even though NML concededly has no right to block payment on non-Exchange Bonds, or (2) allow Citi to pay everyone, thus allowing a subset of Exchange Bonds to escape the injunction. The district judge chose option one. In theory, the district judge can reconsider (re-clarify?) that decision, but I am not holding my breath.

September 19, 2014 at 7:49 PM in Sovereign Debt