Burford Capital suggested that remarks by an Argentine provincial governor support its push to collect a US$16-billion US court award against an oil company it argues is an “alter ego” of President Javier Milei’s government.
Litigation funder Burford won the judgement against Argentina last year over the 2012 nationalisation of oil company YPF SA. US District Judge Loretta Preska ruled that the action violated the rights of shareholders whose interests Burford acquired.
Since then, however, Burford has struggled to collect the massive award. The firm is currently trying to convince Preska to let it explore going after assets of YPF itself on the grounds that the company is essentially identical to the government. To that end, Burford lawyer Randy Mastro on Monday invoked recent public comments by Buenos Aires Province Governor Axel Kicillof.
“YPF’s directors are officials of President Milei,” Kicillof said at a July 31 press conference, adding that they made decisions dictated by Milei. Mastro said Kicillof’s statements were consistent with Burford’s position.
Kicillof was criticising YPF’s decision to locate a multibillion-dollar liquefied natural gas plant project with Malaysia’s Petronas in another province, suggesting it was a political decision. YPF, which is 51 percent-owned by the Argentine government, has denied the decision was political, saying that it hired international consultants to guide the choice.
If Kicillof’s comments prove pivotal in the case, it will hardly be the first time. The governor was deputy economy minister in 2012 and helped spearhead the YPF nationalisation. At the time, he argued to Congress that company by-laws requiring a nationalisation to be accompanied by a tender offer to shareholders at a pre-determined price was a “bear trap,” comments that were cited by Burford in its case.
Burford is currently seeking further information on whether YPF is an alter ego of the Argentine government. The company argues that Preska already dismissed claims against it and says Burford is trying to relitigate the issue.
The litigation funder bought the YPF shareholders’ claims for US$16.6 million in 2015, and its share of the judgement would be some US$6.2 billion. If it can collect even part of that, Burford stands to make a massive return.
But Argentina, which is also appealing the award, has a long history of stonewalling foreign judgement creditors. It fought a 15-year battle with Paul Singer’s Elliott Management before reaching a US$4.7-billion settlement over its 2001 sovereign debt default.
by Jonathan Gilbert, Bloomberg
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