A Ballard Spahr client has won a U.S. Court of Appeals ruling upholding its attachment of certain Argentine commercial assets. The decision, issued Wednesday in favor of Capital Ventures International (CVI), is a milestone in the efforts of numerous plaintiffs to recover on hundreds of millions of dollars in judgments resulting from Argentina’s 2001 bond default.

The Second Circuit ruling essentially reaffirms the validity of CVI’s attachment of the collateral behind Argentina’s Brady Bonds, rejecting Argentina’s attempt to circumvent the attachment to use the collateral in a different exchange offer. The decision reversed the U.S. District Court for the Southern District of New York.

The collateral behind the Argentina Brady Bonds is U.S. Treasury bonds. Argentina, in an earlier default on foreign debts, in 1992 replaced old bonds with new ones under Latin American debt relief overseen by then-Treasury Secretary Nicholas Brady. Under the appeals court ruling, if Argentina Brady Bonds holders exchange their bonds before they come due, in 2023, CVI will be able to seize the Treasury bond collateral corresponding to any exchanged bonds.

Ballard Spahr attorneys M. Norman Goldberger and Laura E. Krabill previously won a judgment of more than $200 million against Argentina for their client, which holds defaulted Argentina bonds.

“The difficulty is trying to collect,” Ms. Krabill said, adding that a cottage industry has grown up around such collection efforts. Mr. Goldberger agreed. “There are rules regarding attachment,” he said. “Only commercial assets are subject to attachment; embassy assets are off-limits and so are military assets. Attachment can be elusive. We continue to believe Argentina should make every attempt to negotiate a fair resolution of the debts it owes.”

Mr. Goldberger and Ms. Krabill are partners in Ballard Spahr’s Litigation Department and resident in the firm’s Philadelphia office.