The U.S. Supreme Court on Monday refused to review Argentina’s petition challenging a Second Circuit ruling that requires the country to hand over reversionary interests in collateral tied to $400 million in defaulted sovereign bonds.
The case centers on Argentina’s 2001 default on bonds issued in 1994 under the Brady Plan, a U.S.-backed debt-relief initiative. The Second Circuit ruled in August 2024 that these reversionary interests in collateral, including U.S. Treasury bonds and Deutsche Mark bonds, fall under the Foreign Sovereign Immunities Act (FSIA) commercial activity exception because Argentina had used them in U.S. commercial activity.
Argentina’s Petition Rejected
Argentina petitioned the Supreme Court in December, arguing that the Second Circuit erred by applying New York state law to determine the location of the reversionary interests, rather than a federal standard. The country warned that the decision could lead to inconsistent outcomes across states.
“The Second Circuit’s approach would mean, contrary to the FSIA’s command of uniformity, that the same property would be subject to execution in some states but not others,” Argentina argued.
