The Buenos Aires Herald summarizes the latest this way ('We will maintain Citibank’s suspension' 03/29/2015):
Economy Minister Axel Kicillof said the suspension of Citibank Argentina, ordered by the National Securities Commission (CNV) financial watchdog, will stay in place until the bank revokes its agreement not to appeal US Judge Thomas Griesa’s ruling that interest payments on Argentina's restructured local law bonds could not be processed if the bank was allowed to make two one-off payments to help it exit its local custody business.The title of this article by Alfredo Zaiat refers to it as "the Citi-Singer Pact," El pacto Citi-Singer Página/12 29.03.2015.
The official condemned the deal between the bank and the “vulture funds” and said that Citibank is trying to please the vultures and Griesa at the same time but he pointed out that it is leaving its clients (bondholders) helpless.
“(Judge) Griesa in his attempt to extort the country along with vulture funds, has told US Citibank to not let Argentina Citibank to operate with Argentina’s public debt securities in Argentina,” Kicillof explained in an interview with Tiempo Argentino newspaper. “This is a mess because Citibank has opened a branch in this country and it has to comply with this country’s laws.”
This set of actions has the usual tangle of legal, financial and political complications. But the basics are that Citibank has been caught between its legal obligations to Argentina to process payments to creditors who have renegotiated their debt and Nixon zombie judge Griesa's order blocking them from making the payments. So Citi wants to wash its hands of the whole thing and get out of the custody-payment business in Argentina altogether.
Apparently Citibank figured they stood to lose more money from trying to comply with Argentine law and their custody payments agreement with it than by going along with the vulture funds and their Nixon zombie judge.
Singer and the vulture funds stand to gain money from their position. But they won't go broke or suffer in any meaningful way if they loses. Argentinians, on the other hand, have a great deal to lose, economically, socially and politically.
Not unlike Greece's position in negotiating with Germany over debt and austerity issues, the side that's closer to having nothing to lose has a negotiating advantage in that fact.