REG - Burford Capital Ltd - Burford Capital Statement Re YPF Appeal Decision

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RNS Number : 5353Y  Burford Capital Limited  30 March 2026

 

March 27, 2026

 

Released out of hours on March 27, 2026, and queued for release via RNS upon
its reopening on March 30, 2026.

 

 

Burford Capital Statement Re YPF Appeal Decision

 

Burford Capital Limited ("Burford"), the leading global finance and asset
management firm focused on law, announces that the United States Court of
Appeals for the Second Circuit (the "Second Circuit" or the "Court") released
its opinion in the YPF matter today, with a majority of the three-judge panel
reversing the District Court's entry of judgment in favor of Petersen and Eton
Park.  Judge Cabranes dissented and would have affirmed the judgment.

 

Second Circuit decision

 

The Court's opinion discussed "the Republic's knowing and flagrant violation
of the promises it made to foreign investors" and noted:

 

 ·             None of the parties, including Argentina, dispute that Argentina violated
               YPF's Bylaws
 ·             Argentina touted its commitment to tender for minority shareholders' shares
               and provide a compensated exit in the event of Argentina retaking control of
               YPF
 ·             Argentina's "reason for doing so was plainly to assure private investors -
               many of whom were based in the United States - that they would be protected"
 ·             "It may well be that the Republic would not have been able to raise $1.1
               billion from YPF's NYSE-listed ADRs without these investor protections"
 ·             Argentina's "refusal to honor those protections two decades after making them
               cast doubt on the security of foreign investment in the country more broadly"

 

The Court also did not accept Argentina's arguments as to forum non
conveniens, a topic that was the focus of many investors following last year's
oral argument.

 

However, the majority proceeded to hold that Argentina's commitment to make a
tender offer was not enforceable by the shareholders who relied on it, in a
remarkable abdication of the Second Circuit's role as a guardian of the rights
of NYSE investors.  In essence, the majority held that promises like these -
central to the operation of the US capital markets - cannot necessarily be
enforced.

 

The majority also held that even though Petersen and Eton Park's claims did
not challenge the expropriation itself, they were somehow sufficiently related
to Argentina's expropriation of a majority of YPF's shares that they should
have been brought in the Argentine expropriation compensation process, a
process uniquely poorly designed to give US investors the benefit of the
bargain promised in the Bylaws.

 

The majority's opinion concluded by noting that "to the extent that the
Republic committed a wrong against the shareholders it promised to protect,
Argentine law did not leave YPF's minority shareholders without any remedy -
Plaintiffs could have sought … to enforce the Bylaws' protections in
Argentine court".  Doubtless investors who rely on the security of the US
capital markets will find little comfort in the idea that they need to seek
redress in the courts of the very sovereign that breached its solemn promises.

 

The dissent took the opposite view - that investors were meant to be
protected, that the majority's "narrow" opinion "minimize s  if not forgets"
the "factual realities" and that the District Court was correct and should be
affirmed.

 

Next steps in the US courts

 

The panel decision is sufficiently extraordinary that we expect that the
plaintiffs will seek rehearing en banc by the entire Second Circuit, although
statistically the Court rarely grants such requests.  (Our release of October
22, 2025 details the various procedural options following a decision by the
Second Circuit panel.)  The plaintiffs will make a final decision about their
next step in the days to come; such a filing is due in 14 days.

 

Following the Second Circuit's decision on the en banc petition, assuming
plaintiffs seek such relief, plaintiffs will consider further steps including
whether to seek further review from the Supreme Court of the United States.

 

Arbitration

 

In light of the position in the US courts, plaintiffs are likely to consider
seriously the commencement of investment treaty arbitration against
Argentina.  This is the alternative avenue that has always been available
should the US courts not entertain the case.  It is premature to discuss
publicly the scope and contours of the arbitration path, but it is important
to recall that US litigation was never the only path for potential relief
here, and that Argentina has lost many such investment arbitrations in the
past, including a substantial claim funded by Burford that yielded a highly
successful result.

 

Impact on Burford

 

Burford's management and board of directors, along with Burford's valuation
committee and its external auditors, will consider the financial impact of the
decision in connection with Burford's first quarter reporting.  Burford's
valuation policy calls for a partial write-down of assets following an
intermediate appellate loss, and we would expect such a non-cash write-down to
occur here, although we have not yet determined its magnitude and will include
those details as part of our first quarter reporting which we would normally
release in early May.

 

Given the substantial carrying value of the YPF matter on Burford's balance
sheet, a material write-down could reduce Burford's balance sheet equity value
below the level required under the indentures governing our senior notes to
incur additional debt under the provisions permitting debt incurrences based
on our debt to equity ratio, which would limit Burford's ability to issue new
debt.  Our ability to make restricted payments or permitted investments based
on our debt to equity ratio also could be limited.  Burford no longer has any
outstanding debt with maintenance financial covenants that would be implicated
by a decline in balance sheet equity.

 

Christopher Bogart, Burford's Chief Executive Officer, commented:

 

"The Second Circuit decision is obviously very disappointing and a remarkable
abandonment of the rights of minority NYSE shareholders.  However, we have
always said that there was risk associated with litigating this case in the US
courts, and unless plaintiffs can overturn this regrettable panel decision,
investment treaty arbitration remains an entirely viable prospect.  We have
long had King & Spalding, consistently ranked the leading arbitration firm
in the world, at work on this path forward."

 

"Burford's business today is driven by a large portfolio of matters apart from
YPF. That core business continues to perform strongly. We recently raised
additional capital to support future investment activity, and we remain
focused on the long-term strength of our capital structure. As we evaluate
next steps, we remain confident in the strength of the business and the
opportunities ahead."

 

 

For further information, please contact:

 

 Burford Capital Limited
 For investor and analyst inquiries:
 Americas: Josh Wood, Head of Investor Relations - email                       +1 212 516 5824
 (mailto:jwood@burfordcapital.com)
 EMEA & Asia: Rob Bailhache, Head of EMEA & Asia Investor Relations -          +44 (0)20 3530 2023
 email (mailto:rbailhache@burfordcapital.com)
 For press inquiries:
 David Helfenbein, Senior Vice President, Communications - email               +1 646 504 7074
 (mailto:media@burfordcapital.com)

 Deutsche Numis - NOMAD and Joint Broker                                       +44 (0)20 7545 8000
 Duncan Monteith
 Charlie Farquhar

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 Peter Luck
 David Lloyd

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 Graham Davidson
 James Umbers

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 Toby Flaux
 James Thompson

About Burford Capital

 

Burford Capital is the leading global finance and asset management firm
focused on law. Its businesses include litigation finance
(https://www.burfordcapital.com/) and risk management, asset recovery and a
wide range of legal finance and advisory activities. Burford is publicly
traded on the New York Stock Exchange (NYSE: BUR) and the London Stock
Exchange (LSE: BUR) and works with companies and law firms around the world
from its global network of offices.

 

For more information, please visit www.burfordcapital.com
(http://www.burfordcapital.com) .

 

 

This press release does not constitute an offer to sell or the solicitation of
an offer to buy any ordinary shares or other securities of Burford.

 

This press release does not constitute an offer of any Burford private fund.
Burford Capital Investment Management LLC, which acts as the fund manager of
all Burford private funds, is registered as an investment adviser with the
US Securities and Exchange Commission. The information provided in this press
release is for informational purposes only. Past performance is not indicative
of future results. The information contained in this press release is not, and
should not be construed as, an offer to sell or the solicitation of an offer
to buy any securities (including interests or shares in any of Burford private
funds). Any such offer or solicitation may be made only by means of a final
confidential private placement memorandum and other offering documents.

 

Forward-looking statements

 

This press release contains "forward-looking statements" within the meaning of
Section 27A of the US Securities Act of 1933, as amended, and Section 21E of
the US Securities Exchange Act of 1934, as amended, that are intended to be
covered by the safe harbor provided for under these sections. In some cases,
words such as "aim", "anticipate", "believe", "continue", "could", "estimate",
"expect", "forecast", "guidance", "intend", "may", "plan", "potential",
"predict", "projected", "should" or "will", or the negative of such terms or
other comparable terminology, are intended to identify forward-looking
statements. Although Burford believes that the assumptions, expectations,
projections, intentions and beliefs about future results and events reflected
in forward-looking statements have a reasonable basis and are expressed in
good faith, forward-looking statements involve known and unknown risks,
uncertainties and other factors, which could cause Burford's actual results
and events to differ materially from (and be more negative than) future
results and events expressed, projected or implied by these forward-looking
statements. Factors that might cause future results and events to differ
include, among others, (i) uncertainty relating to adverse litigation outcomes
and the timing of resolution of litigation matters and (ii) those discussed in
the "Risk Factors" section of Burford's Annual Report on Form 10-K for the
year ended December 31, 2025 filed with the US Securities and Exchange
Commission on February 26, 2026. These factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements contained in the periodic and current reports that Burford files
with or furnishes to the US Securities and Exchange Commission. Many of these
factors are beyond Burford's ability to control or predict, and new factors
emerge from time to time. Furthermore, Burford cannot assess the impact of
each such factor on its business or the extent to which any factor or
combination of factors may cause actual results and events to be materially
different from those contained in any forward-looking statement. Given these
uncertainties, readers are cautioned not to place undue reliance on Burford's
forward-looking statements.

 

All subsequent written and oral forward-looking statements attributable to
Burford or to persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. The forward-looking statements speak
only as of the date of this press release and, except as required by
applicable law, Burford undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

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