Citigroup’s impassioned call to the United States Court of Appeals to reconsider a judgment by a Federal District Court judge in Manhattan has failed to gain support.
A three-judge panel of the United States Court of Appeals for the Second Circuit declined on Friday to rule on Citigroup’s appeal of a ruling by Judge Thomas P. Griesa of the United States District Court that prevents it from making $5 million in interest payments to the holders of Argentine bonds on Sept. 30.
“Nothing in this court’s order is intended to preclude Citibank from seeking further relief from the District Court,” the panel’s order said.
Citigroup has been forced to make a difficult decision: defy a New York court order or face what it has called severe sanctions from Argentina. On Thursday, Karen Wagner, a lawyer representing the bank, argued that Argentina was holding a gun to the head of Citigroup. If the bank obeys the New York ruling, that gun will go off, Ms. Wagner said.
The case is part of a bigger battle playing out between Argentina and a group of New York hedge funds that are demanding full payment on bonds that defaulted in 2001.
Citibank’s case will now return to Judge Griesa’s court.
