Citigroup Inc (NYSE:C) In A Web Of Cases As Judge Asks Argentina To Explain Its Position For Contempt Of Orders

Albany, New York (09/25/2014) – The case involving Citigroup Inc (NYSE:C)’s delayed payments to Argentina, is getting more and more intricate. Argentina is the next one to get caught in this web. Yesterday, Judge Thomas Griesa of the Manhattan federal court ordered Argentina to prove why it should not be considered for contempt of orders. The U.S. Judge said that Argentina should prove why the court need not levy contempt charges on it for violating orders that favoured creditors that had refused restructured bonds. These creditors did not accept the bonds from Argentina, on the grounds of Argentina’s default of 2002 on the amount of $100 billion.

Contempt of Orders

The district judge scheduled Monday for the hearing of this case, after holdout bondholders requested for the same. Interestingly, these bondholders have urged the judge to check the angle of order violation, which would eventually amount to contempt of command.

The judge had ordered Argentina to explain why the court should not demand it to come in compliance with its directives. Argentina had, defaulted in July, once again after it disproved payments to the bondholders.

Among various holdout creditors waiting for the payment, was NML Capital Ltd. the court had ordered Argentina to make a full payment to it before resuming for others. Eventually, the country did not abide by the Judge’s orders and this led to contempt.

Double Trouble for Citigroup

Meanwhile, it is a double trouble for Citigroup Inc (NYSE:C), who has pleaded the Judge to hold order that curtails it from paying bonds worth $8.4 billion under the local law of Argentina.  Citigroup has the deadline for September 30, 2014, after which, it said, that there will be criminal and regulatory sanctions from Argentina.

The company says that it should be allowed for making payments that it received from the country on those bonds that were issued under Argentina’s law. The Judge, on July 28, 2014, had, however, blocked the company from doing so because they were the bonds of the U.S. dollar denominations issued in accordance with their laws.

About the Author

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in market.

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