The United States government is currently deliberating the possibility of submitting a statement of interest to the courts regarding Burford Capital’s pursuit of a 16 billion US dollar judgment against Argentina, which pertains to the nationalization of the oil company YPF SA in 2012. The move may frustrate Burford’s efforts to collect its share of the proceeds.
In a letter dispatched today, the US Justice Department requested that US District Judge Loretta Preska in Manhattan postpone her decision on Burford’s motion for an order compelling Argentina to relinquish its 51 percent stake in YPF SA to assist in enforcing the judgment. The US government indicated that it would provide a statement on 6 November, should it decide to proceed.
The case originates from Argentina’s 2012 nationalization of YPF and its subsequent refusal to adhere to the company’s by-laws that mandated a tender offer to investors. Burford acquired the interests of YPF shareholders and initiated legal action on their behalf. The litigation funder stands to gain approximately 6.2 billion US dollars if the full judgment is honored.
The stance of the United States government remains uncertain. Last year, the United States, in collaboration with France and the United Kingdom, requested a judge to postpone a bondholder’s lawsuit against the Sri Lankan government to promote negotiations between the South Asian country and its other creditors.
Should the United States submit a statement, its position may further complicate Burford’s efforts to secure a substantial profit, having acquired a portion of the case in 2015 for merely 16.6 million US dollars. Argentina currently faces a financial crisis, as the liabilities of its Central Bank exceed its available cash, resulting in net foreign reserves that are approximately 6 billion US dollars in the negative. Additionally, Argentina owes the International Monetary Fund a total of 40 billion US dollars and is by far the IMF’s biggest debtor.
