Argentina Appeals $16 Billion Verdict in Litigation-Funded Case

Argentina appealed a $16 billion verdict in a lawsuit over its 2012 seizure of oil company YPF SA.

Argentina sought the reconsideration Tuesday in the US Court of Appeals for the Second Circuit. The appeal includes US District Judge Loretta Preska’s March order that granted summary judgment to investors who claimed the country didn’t offer a payout to shareholders as required when Argentina nationalized YPF in 2012.

Petersen Energia Inversora, S.A.U. and other investors filed suit in 2015. The drawn-out litigation included an unsuccessful appeal to the US Supreme Court by Argentina in 2019.

Preska ruled on the amount after a three-day trial in July in Manhattan regarding the appropriate formula to calculate the amount of damages Argentina owed shareholders. In September, she ordered Argentina to pay $8.4 billion in damages and $7.6 billion in interest to shareholders, a sharp blow as the country’s financial situation has grown increasingly precarious.

The case was backed by litigation funder Burford Capital, which acquired the right to pursue the claims for 15 million euro ($16.6 million) in 2015. The funder’s share is around $6.2 billion, which would give Burford a more than 37,000% return on its initial investment.

Burford declined to comment.

In the 1990s, when Argentina privatized its oil company, it included language in its bylaws that if the country decided to nationalize the entity in the future it must give a tender offer to all Class D shares at a predetermined price.

But when Argentina nationalized YPF in 2012, Deputy Economy Minister Axel Kicillof, the vice-intervenor of YPF, said the tender offer requirement was a “bear trap” and that only “fools” would expect Argentina and YPF to honor it, according to a court filing.

Petersen Energia Inversora v. Argentina Republic, S.D.N.Y., The case is: 16-cv-08569-LAP, 10/10/23