By Nate Raymond
NEW YORK (Reuters) - Argentina's central bank lost a bid Wednesday to dismiss a lawsuit by bondholders seeking to hold it responsible for the country's obligations on defaulted debt, in the latest victory for holdout creditors.
U.S. District Judge Thomas Griesa in Manhattan rejected a motion by Banco Central de la República Argentina (BCRA) to dismiss a lawsuit by two bondholders seeking to have the central bank declared the "alter ego" of the South American country.
Griesa did not rule on the case's merits, and said a finding that Argentina and the central bank were legally the same "could really have effects or implications beyond what I would intend."
But citing "irregularities" in Argentina's behavior, Griesa said at a court hearing that "there could be some account or some assets of the BCRA that could be legitimately attached or executed on to satisfy the judgment debts here."
The ruling is the latest in years of litigation by bondholders who refused to participate in restructurings in 2005 and 2010 of Argentina's debt, following a $100 billion default in 2002.
The ruling came in a lawsuit brought by NML Capital Ltd, which is a unit of Paul Singer's Elliott Management Corp, and EM Ltd, controlled by investor Kenneth Dart. Together, they are seeking to collect $3.41 billion from Argentina, the complaint said.
Creditors who participated in the debt swaps received 25 cents to 29 cents on the dollar, while holdouts remain in court, seeking authority to collect more.
The U.S. Supreme Court will meet on Monday to decide whether it will review a related appeals court ruling requiring Argentina to pay $1.33 billion to holdouts, including NML.
NML and EM, in their case, argued that it was a "legal fiction" that the central bank and the country are separate.
Griesa has previously found them to be alter egos, but on Wednesday he said that was in a more limited context, where holdouts chased $100 million on deposit with the Federal Reserve Bank of New York.
That ruling was later reversed in 2011, but Griesa said that was on other grounds.
Robert Cohen, a lawyer with lawfirm Dechert who represents NML, said a broad ruling could help holdouts avoid relitigating the matter as they pursue Argentina assets elsewhere, including tens of billions of dollars on deposit with the Bank for International Settlements.
"It's not purely hypothetical," he said.
Joseph Neuhaus, a lawyer for BCRA at Sullivan & Cromwell, said the relief that EM and NML seek should not be a "stepping stone" for pursuing other litigation. "It is supposed to end litigation."
The case is EM Ltd. et al v. Banco Central De La República Argentina et al, U.S. District Court, Southern District of New York, 06-07792.
(Reporting by Nate Raymond in New York; Editing by Leslie Adler)