Burford Capital Ltd.’s big bet on a lawsuit over an Argentina oil company took a major step forward on Friday.
A federal court in New York mostly sided with former YPF SA shareholders, backed by Burford, who are suing Argentina. The court ruled that the country is liable for losses suffered by the 2012 nationalization of the oil company.
Burford has financed the shareholders’ lawsuit, arguing the legal claims are worth more than $7.5 billion before prejudgment interest. The litigation funder says it has already made more than three times its initial investment in the case, after previously selling claims worth more than $230 million.
Burford shares jumped more than 30% before trading was suspended.
The YPF case, filed in 2015, had become such an outlier asset for the company that Burford began posting financial results and projections that excluded any returns from the Argentina fight.
The court granted summary judgment to Petersen Energia Inversora, S.A.U. and other investors, but didn’t specify the amount of money damages that Argentina will be ordered to pay. District Judge Loretta A. Preska said some details on the timing of the nationalization needed to be ironed out to calculate damages.
Major law firms represent both sides in the drawn-out litigation, which included an unsuccessful appeal to the US Supreme Court by Argentina in 2019.
Former US Solicitor General Paul Clement and lawyers from his former firm, Kirkland & Ellis, teamed with attorneys from Kellogg, Hansen, Todd, Figel & Frederick and King & Spalding to submit the plaintiffs’ summary judgment motions last year.
Sullivan & Cromwell partners, including co-chair Robert Giuffra, have defended Argentina in the case.
Debevoise & Plimpton represented YPF in its summary judgment motion, drafted by a team including Mark Goodman, co-chair of the firm’s commercial litigation group. The court ruled in favor of the oil company, finding it was not required to force Argentina to make a tender offer for the shares during the nationalization and therefore not liable in the lawsuit.
A Burford spokesman did not immediately respond to a request for comment.
The company has previously said it will only comment after its litigation counsel has had “sufficient time to undertake a review and analysis” of any YPF-related ruling. The company filed notice of the ruling with the US Securities and Exchange Commission.
The case is Petersen Energia Inversora, S.A.U. v. Argentine Republic, S.D.N.Y., 1:15-cv-02739, 3/31/23
Emily Siegel contributed to this report.
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