Boston, MA 09/11/2014 (wallstreetpr) – Diversified financial services provider Citigroup Inc (NYSE:C) has been provided with a relief by the Court on the question of providing evidence to show Argentina threat of punitive measures, including the closure of the bank. The court said that the bank need not have to comply with a subpoena from hedge fund company, NML Capital’s founder Paul Singer.
Court Order
The latest order from the court effectively meant that Citigroup Inc (NYSE:C) would not have to bother about the hedge company’s subpoena, Bloomberg reported. The financial services provider had to take up the matter with the Appeals Court, which has ordered hearing last week.
Citigroup Inc (NYSE:C) said before the Appeals Court that it could lose its branch in Argentina if it failed to distribute $5 million as interest payment to the bondholders. The bank also claimed before the court that it faced a ‘grave sanction’ under the law of Argentina in case it maintained another U.S. Judge order and refused to pay the interest. There was also a threat of regulatory and criminal penalties and wanted the Appeal Court’s intervention.
Hedge Fund Demand
NML Capital demanded Citigroup Inc (NYSE:C) to provide evidence of the threat from Argentina that if it violates a U.S. District Judge, Thomas Griesa, order, the bank will have to face punitive actions. The judge has earlier ordered Argentina to pay NML Capital that was owed over $1.5 billion in defaulted debt while paying the restructured bond holders. The order was passed since Argentina has planned to pay its holders of restructured U.S. dollar bonds as per the laws of its land from a Citigroup branch in Argentina. The judge barred Citigroup Inc (NYSE:C) from making interest payment,
Appeal by Argentina
Meanwhile, Argentina has also filed an appeal against Griesa order, which is scheduled for hearing on September 18 in New York.
Judge Griesa, who had earlier planned to hear the case on September 10, said that since the issue was pending before the Appeals Court, the court was not in a position to take any action at this point of time.
