Argentina’s plan to sell new bonds in international markets to raise approximately $2 billion was suspended, according to report from the New York Times based on information from people familiar with the situation.

The report indicated that Argentina engaged the services of JPMorgan Chase & Co. (NYSE:JPM) Chase and Deutsche Bank AG (NYSE:DB) (ETR:DBK) (FRA:DB) to handle the bond sale. The banks decided to halt the deal temporarily after a federal court requested documents describing how Argentina will obtain the proceeds from the bond sale.

Judge Thomas P. Griesa of the Federal District Court in Manhattan ordered JPMorgan Chase and Deutsche Bank to produce the documents in response to the request of NML Capital, a unit of Elliott Management. The judge also ordered that banks to bring witnesses during the deposition about the bond deal on Thursday, at 3:00 P.M.

According to Judge Griesa, the order does not prohibit any transaction. He said, “It simply asks for discovery.”

A document related to the bond sale suggests that a potential deal is being arranged in London. The document also includes a clause that provides details regarding the possibility of legal changes related to the sale. The clause specifically cited the possibility of legal attempts to “attach assets of Argentina,” according to the The New York Times.

Argentina said no confirmation of a bond sale

In a statement, Argentina’s Economy Ministry said the country is open to review all proposals it may receive. The Ministry emphasized, “There was never a confirmation of a sale; therefore it can’t be suspended.”

People familiar with the situation said JPMorgan and Deutsche Bank decided to suspend a potential bond sale as a precaution while responding to the request of the court.

One of the persons pointed out that the court does not prevent Argentina from raising funds. Any restrictions imposed by the court “apply to the coupon payments on its bonds, not its ability to raise capital.”  The person suggested that a deal could be resumed depending on the result of the legal proceedings.

Elliott and Aurelius “dismayed” by Argentina’s new bond sale

Elliott and Aurelius Capital Management (also referred to as holdout investors] own Argentina bonds that were defaulted by the country in 2001. The Hedge Funds are engaged in a long-running legal battle against Argentina to recover their investment after refusing to accept its 2005 and 2010 restructured bonds in exchange for the defaulted debt

The hedge funds through a joint spokesman expressed disappointment regarding the proposed new bond sale. According to them, they were “dismayed” by the Argentina’s plan.

Last year, Judge Griesa ordered Argentina to stop making payments on the restructured bonds. He also threatened to penalize any entity that would help the country in making payments.