Argentina has recently appealed a $16 billion verdict in a lawsuit concerning its 2012 seizure of oil company YPF SA. In 2015, Petersen Energia Inversora, S.A.U., and other investors filed suit as a response to the Argentinian government’s failure to offer payouts to shareholders when the country nationalized YPF in 2012.
Earlier, in March, U.S. District Judge Loretta Preska had ruled in favor of the investors, following which Argentina made this new appeal in the U.S. Court of Appeals for the Second Circuit. The history of this drawn-out litigation includes an unsuccessful appeal to the U.S. Supreme Court by Argentina in 2019.
In September, Judge Preska ordered Argentina to pay $8.4 billion in damages and an additional $7.6 billion in interest to shareholders; this order follows a three-day trial in July where the calculation of the amount that Argentina owes to the shareholders were discussed.
Notably, the case received backing by litigation funder Burford Capital, which acquired the right to pursue the claims for 15 million euro ($16.6 million) in 2015. As a result of the verdict, the funder is expecting a more than 37,000% return on its initial investment, amounting to roughly $6.2 billion.
The Argentinian bylaws regarding the privatization of its oil company in the 1990s stipulated that should the country decide to nationalize the entity in the future, it must offer a tender to all Class D shares at a predetermined price. However, Deputy Economy Minister Axel Kicillof deemed this requirement a “bear trap” and claimed that “only fools would expect Argentina and YPF to honor it,” following the nationalization of YPF in 2012.
The case, Petersen Energia Inversora v. Argentina Republic, continues to evolve in the U.S. courts, with a current record as S.D.N.Y., 16-cv-08569-LAP, 10/10/23.