In March of this year, U.S. Judge Loretta Preska acquitted Argentina’s state-owned gas and oil company YPF, which was being sued for breaching its obligations to minority shareholders during its expropriation in 2012. However, Argentina, the country, was held responsible and called to pay plaintiffs, represented by Burford Capital, US$16.1 billion in September.
On Thursday, Burford Capital appealed Preska’s acquittal of YPF, seeking to bring the company back to the billion-dollar lawsuit as multiple appeals make their way through the Court of Appeals for the Second Circuit.
In response, YPF said in a public letter sent to the Buenos Aires Stock Exchange that it would continue “to defend itself in accordance with the applicable legal procedure” in the lawsuit.
Last month, Burford Capital requested authorization from Preska to seize Argentine assets starting on October 15 in order to ensure part of the US$16.1 billion payout. Argentina rejected the possibility and appealed Preska’s ruling by arguing that the payment would be equivalent to “nearly 20% of the Republic’s 2023 federal budget.”
Both Argentina and Burford are awaiting Preska’s ruling regarding the seizing of assets, which could take between nine and 12 months.
In 2012, through its Congress, Argentina expropriated shares of oil and gas company YPF held by the Spanish multinational Repsol, at the time the majority shareholder. Three years later, Burford Capital bought the trial rights from two companies belonging to the Argentine Eskenazi family, Petersen Energia Inversora and Petersen Energía, and another company, Eton Park. Between 2008 and 2011, they bought shares of YPF listed on Wall Street (called ADRs) until they held 25% of it.
They contend that Argentina failed to make a tender offer for their YPF shares in 2012.
If Preska lifted the stay of the ruling, Burford would have the right to try to forcibly collect, if it managed to find any assets it could seize. Argentina would then appeal that ruling in an Appeals Court. If she ruled in favor of Argentina — which would be a first in this lawsuit — Burford wouldn’t be able to forcefully collect anything until the case had a final judgment of the Appeals Chamber, eventually with a decision of the Supreme Court.