US judge rules against Argentina following YPF payout trial (updated)
08/09/2023 16:36
(Adds further details on ruling, background on case in
paragraphs 3-11)
By Jonathan Stempel and Nate Raymond
NEW YORK, Sept 8 (Reuters) - Argentina suffered a big
legal defeat on Friday as a U.S. judge ruled against the country
in a dispute with minority shareholders of YPF YPFD.BA arising
from the country's 2012 seizure of a majority stake in the oil
and gas company.
U.S. District Judge Loretta Preska in Manhattan ruled in
favor of Burford Capital BURF.L , which funded the litigation
brought by shareholders Petersen Energia Inversora and Eton Park
Capital Management LP, and according to court papers was
entitled to a respective 70% and 75% of their damages.
The plaintiffs had sought $16.05 billion, while
Argentina said it owed no more than $4.92 billion, court papers
show.
Argentina had argued that a big payout "would further
burden a sovereign nation with a populace enduring pressing
economic challenges and would far exceed Argentina's budget for
many critical services."
Burford, a litigation funding company, in a statement
acknowledged the ruling and said it was reviewing and analyzing
it. Its shares were up 17.2% at $16.25 in Friday trading.
Preska ruled after a three-day non-jury trial held in
late July. A lawyer for Argentina did not immediately respond to
a request for comment
She had previously ruled that Argentina had breached its
obligations to the shareholders by seizing the 51% YPF stake
held by Repsol REP.MC without tendering for the remaining
shares, including those held by Petersen and Eton Park.
The trial concerned how much Argentina owed in damages.
Lawyers for the shareholders sought $8.43 billion in
damages plus $7.62 billion in prejudgment interest, court papers
show.
Those estimates were based on Argentina's seizure of the
YPF shares on April 16, 2012, which the shareholders said
transferred "control," plus 8% annual interest, based on the 6%
to 8% commercial rates charged by Argentine courts.
Argentina countered that the trigger date was May 7,
2012, when the law allowed it to exercise rights attached to the
seized shares, and the interest rate should be zero or at most
3%.
(Reporting by Nate Raymond in Boston and Jonathan Stempel in
New York; Editing by Mark Porter)
((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond;
347-243-6917; Reuters Messaging:
nate.raymond.thomsonreuters.com@reuters.net))