(Adds detail, background, byline; adjusts slug to ARGENTINA-DEBT/SETTLEMENT)
By Daniel Bases
NEW YORK, April 12 (Reuters) - Argentina settled with an additional creditor holding defaulted sovereign bonds for approximately $255 million, Daniel Pollack, the court-appointed mediator in the long-running case, said in a statement on Tuesday.
The agreement in principle was reached between the government and Yellow Crane Holdings involving the settlement of bonds under a range of laws in jurisdictions including New York, England, Germany, Italy and Switzerland, Pollack said.
Financial terms of the settlement were not given by Pollack.
However, the statement noted that, according to Argentine officials, Yellow Crane will not be paid for bonds they hold that are beyond a statute of limitations for litigation. Instead, those bonds will be forfeited without payment at the same time as Yellow Crane hands over and gets paid its settlement on other defaulted bonds.
The forfeiture of the bonds without payment indicates a shift by Yellow Crane. The firm was part of a plaintiffs' group that filed a lawsuit before U.S. District Judge Thomas Griesa on March 25 that involved the bonds it is now giving up for nothing. Attempts to reach their lawyer were unsuccessful.
The suit claims Argentina reneged on settlement agreements that included the bonds with statute of limitation issue via the government's settlement process.
The lawsuit, led by Tim DeSieno of Morgan, Lewis & Bockius, alleges Argentina acknowledged the bonds pledged by his clients to settlement agreements that were beyond the statute of limitations by a Feb. 29 deadline set by the government.
They argue that implies a binding agreement. The government argued that acknowledging receipt of agreement documents is not the same as formally countersigning and accepting under its terms all the bonds pledged by the plaintiffs for settlement.
Concurrent to Pollack's statement on Tuesday, Griesa sided with the government and dismissed the lawsuit.
The plaintiffs were trying to use the argument to stop another Griesa order, issued March 2. That order stated he would vacate his powerful injunction that bars Argentina from making payments on debt unless all creditors were paid at the same time. That is the injunction that forced Argentina under two different governments back to the negotiating with holdout creditors.
The March 2 order is now being appealed by holdouts before the 2nd U.S. Circuit Court of Appeals in New York, which will hear oral arguments on Wednesday.
If the appeals court decides to allow Griesa's March 2 order to proceed, Argentina will sell up to $15 billion in debt and use the proceeds to settle the vast majority of its claims in hopes of putting the 2002 default finally to bed. (Reporting by Daniel Bases; Editing by Andrew Hay, Cynthia Osterman and Leslie Adler)