By Noah Rayman
September 30, 2014

A U.S. judge found Argentina to be in civil contempt of court as it continues to defy his rulings that the country repay some $1.6 billion to holdout creditors–largely American hedge funds–before it pays other bondholders, Bloomberg reports.

Most recently, the country has moved to shift control of its structured debt payments to Buenos Aires from New York, despite the judge’s rulings.

U.S. District Judge Thomas Griesa in Manhattan said that move is “illegal and cannot be carried out.”

Griesa did not rule on a penalty, but the holdout creditors have asked him to fine Argentina $50,000 a day until it complies.

Argentina’s Foreign Ministry said on Monday that the contempt ruling undermines “the dignity of foreign states,” according to Bloomberg. “The decision by Judge Griesa has no practical effects beyond providing new elements in the defamation campaign being waged against Argentina by vulture funds.”

[Bloomberg]

Write to Noah Rayman at noah.rayman@time.com.

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