The petition also disputed the Second Circuit’s conclusion that the collateral was used for commercial purposes in the U.S. Argentina claimed its interests in the Deutsche Mark bonds were unrelated to U.S. activity, stating, “The republic has never used any interest it holds in the collateral in commercial activity in the United States.”
Long-Running Litigation
The dispute originated after Argentina defaulted on $400 million in bond payments. Bondholders sought to recover collateral assets tied to Brady Plan bonds, which matured in March 2023. These bonds were secured by zero-coupon U.S. Treasury bonds and Deutsche Mark bonds, with collateral held in the New York Federal Reserve and European banks.
In 2023, U.S. District Judge Loretta A. Preska ordered Argentina to turn over reversionary interests in the collateral. Argentina appealed, arguing that the interests belonged to the country’s central bank, Banco Central de la República Argentina, and that FSIA immunity applied since some collateral was located outside the U.S.
