NEW YORK –  Argentina asked a U.S. judge late on Friday to maintain his order blocking payment on defaulted sovereign bonds to holdout investors until lingering questions are settled in a higher court's appeals process.
Less than 15 minutes before a midnight deadline on Friday, Argentina's lawyers filed their brief outlining why U.S. District Judge Thomas Griesa should reject the argument by holdout creditors to pay them in full on debt that has been in default since 2002.
The arguments came three days after Argentina asked the U.S. 2nd Circuit Court of Appeals in New York to reconsider its October 26 ruling that favored these holdout bondholders and rattled financial markets in the process.
That decision upheld the ruling, that was made by Griesa, that found the South American nation discriminated against bondholders such as Elliott Management Corp's NML Capital Ltd and Aurelius Capital Management. They refused to take part in two debt restructurings as Argentina tried to recover from a $100 billion default a decade ago.
Greisa had put his own ruling on hold pending the appeal and Argentina on Friday argued he should keep the freeze in place until outstanding issues were settled.
"The Court should not accept the false urgency plaintiffs are trying to create and allow the Republic and all potentially affected third parties to prosecute their appeal rights before any orders go into effect," Argentina said in its brief.
After the 2nd Circuit's ruling, Argentine officials were widely cited in the media saying they would flout the court and continue to pay investors who participated in the debt swaps but would never pay the holdout investors.

That prompted Griesa to demand a direct government pledge to comply with his orders.
National Director of Argentina's National Bureau of Public Credit, Francisco Eggers, submitted a signed affidavit saying the government would abide by the court's rulings and not seek to evade its directives.
"As directed by the court, on behalf of the Republic, I confirm that the Republic has complied, and will comply with the terms...," Eggers said.

Last month's ruling led to fears U.S. courts could ultimately inhibit debt payments to creditors who accepted the terms of the restructuring, out of consideration for investors who rejected Argentina's terms at the time.
This would trigger a technical default on approximately $24 billion worth of debt issued in the 2005 and 2010 exchanges.
"It is far beyond the bounds of equity to seek to enforce the rights of one litigant by jeopardizing the rights of others," lawyers representing a group of bondholders who participated in the exchange, led by Gramercy Funds Management LLC., said on Friday.
The briefs from Argentina and the exchange bondholders addressed two questions that the appeals court had referred back to Griesa for answers.
These were technical questions of how debt payments would be calculated and how to treat the involvement of third-party banks such as Bank of New York Mellon, which act as transfer agents for money owed to exchange bondholders.
Argentine President Cristina Fernandez said immediately following the October decision her country would not pay "one dollar to the vulture funds". That is her term for holdout investors who buy distressed or defaulted debt and then sue in international courts to get paid in full.
Eggers' statement contrasted with Fernandez's vow to keep making payments to other creditors.
Argentine bonds closed up 1 percent on average in over-the-counter trading in Buenos Aires on Friday after accumulating a loss of 4.1 percent in the previous three sessions.
TELL US WHAT TO DO
Bank of New York Mellon , which transfers funds from the Argentine government to the country's bond holders, argued in a brief filed late on Friday to Griesa that it is not an agent of the Argentine government and maintains an "arm's length" relationship.
The bank said its "duty of loyalty runs to the Exchange holders", that is, to enforce the rights of investors who exchanged their bonds in 2005 and 2010.
"Punishing an innocent third party to try to obtain compliance from an enjoined party goes beyond any legitimate purpose for contempt," BNY Mellon said.
The bank said it could be put between a rock and a hard place if Griesa rules they are to make payments to all parties but are prohibited because Argentina does not transfer any money through it.
"BNY Mellon will face a potential conflict between its obligations to Exchange Holders under the Indenture and its obligations to the Court," the bank argued.
In that case, the bank said, it needs guidance from Griesa on what its duties and responsibilities would be.
Ultimately, the bank wants Griesa's order to remain in place, leaving the payments frozen until the 2nd Circuit reviews and rules on his logic.
The judge is expected to make a speedy response as Argentina is due to start making $3.3 billion worth of payments to exchange bondholders starting December 2. Griesa's ruling will automatically return to the appeals court for review.
In a court filing this week, NML and Aurelius urged Griesa to lift his February 23 stay on payments pending appeal.
October's ruling by the appeals court largely upheld injunctions issued in February by Griesa in favor of the holdouts, which own roughly $1.4 billion of defaulted debt.
The holdouts said in their argument to Griesa that terms of the swapped Argentine bonds may allow the country to circumvent the United States by using subsidiaries in London and Luxembourg to make debt payments.
VESTED INTERESTS
Weighing in on the arguments before the deadline were other transfer agents, holdout investors and exchange bond holders.
The Clearing House Association, a banking association and payments company, sent a letter to Griesa explaining that any order should not apply to beneficiary's banks, funds-transfer systems or other parties in a funds transfer.
The letter was obtained from a source with direct knowledge of the case. It argued the ruling would cause "disruption of payment systems and delays in processing legitimate payments" made by Argentine entities that have nothing to do with the case.
Law firm Duane Morris, representing about 100 mainly Italian holdout investors with approximately $165 million in principal and pre-judgment interest, sided with NML.
"Despite its proclaimed ability to pay, Argentina has steadfastly refused to make payments that are due under the defaulted bonds - even to the individuals who are not "vultures", Anthony Costantini, a lawyer with Duane Morris wrote in a brief to Griesa on Friday.
On the other side are bond holders who participated in the exchanges who urged that NML not be allowed to collect on its judgments.
Fintech Advisory Inc, a New York investment management firm that gave up $698.9 million of the $1.052 billion it was owed by Argentina during the two debt swaps, argued if the judge sided with the holdout bondholders, Argentina would be in breach of contracts with exchange bondholders like itself.
"There is no basis for any order to cause such a result," Fintech's lawyers wrote.
(Additional reporting by Alejandro Lifschitz and Jorge Otaola in Buenos Aires; Writing by Daniel Bases and Helen Popper; editing by Theodore d'Afflisio, David Gregorio and Todd Eastham)