The international trial facing Argentina for the expropriation of YPF In 2012 he has reached a new chapter, with the English firm Burford Capital as the protagonist. Specialized in the financing of high -impact litigation, Burford became the main plaintiff in this case after acquiring the litigation rights of YPF minority shareholders, mainly of the Petersen Energy and Petersen Energy Investor Energy companies.
Its objective is clear: to collect multimillionaire compensation for what they consider a violation of the company statute during the nationalization process. The controversy dates back to 2012, when the government of Cristina Fernández de Kirchner expropriated 51% of the shares of YPFthat they were in the hands of the Spanish company Repsol.
According to the statute of the oil company, any acquisition of control should be accompanied by a public acquisition (OPA) offer for the rest of the shareholders. Argentina did not comply with this clause, which resulted in a lawsuit in the United States.
Burford Capital, which has no experience in the energy sector but in complex litigation, bought the rights of litigation for just USD 17 million and now claims more than USD 16,000 million, an operation that could become the most profitable business in its history.
In a recent presentation before the Court of Appeals of the Second Circuit of New York, Burford made it clear that he does not seek to control YPFnor direct the company. What he wants is to collect. In his letter, the buffet argued that Argentina has not shown that delivering YPF’s actions caused irreparable damage, and that the country has no right to continue delaying compliance with the ruling without offering guarantees.
Burford was even willing to accept alternative guarantees to the actions of YPFbut requires that some kind of support be established to prevent Argentina from appealing “in discovered.” In other words, the buffet seeks to protect its position while the appeal is resolved, and press so that the country meets the conditions imposed by Judge Loretta Presska.
A business model based on litigation
Burford Capital is defined as a global leader in legal finances, with a presence in London, New York, Singapore, Hong Kong and other cities. Your business model consists in financing litigation in exchange for a part of the profits obtained. In the case of YPFBurford was entitled to 70% of what was recovered, although over time it was selling participations to other investors.
In his investor Day made on Wall Street, Burford described the trial against Argentina as a “potential source of solid cash flow and profitability.” CEO Christopher Bogart said they are “well positioned to monetize assets related to YPF”, And estimated that the fair value of these assets is USD 1.5 billion.
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