Burford Capital Eyes Aerolíneas Argentinas Assets in Ongoing YPF Litigation Dispute

In a recent development in the legal battle over the nationalization of Yacimientos Petrolíferos Fiscales (YPF), Burford Capital, a litigation funder, has sought the permission of US District Judge Loretta Preska to potentially target assets owned by Aerolíneas Argentinas, the state-owned flag carrier. This move is part of a broader effort to enforce a massive judgment against the Argentine government and its oil and gas company, YPF, following a dispute rooted in events from 2012.

Burford Capital’s involvement stems from cases filed by Petersen Energia Inversora and Eton Park Fund, who are pursuing claims against Argentina and YPF for the partial nationalization of the oil company, a move that allegedly violated YPF’s by-laws by not extending a tender offer to all shareholders. The Financial Times reports that this legal action could extend to examining a wide range of state-owned assets, including those of Aerolíneas Argentinas, as Burford pushes to establish YPF as an alter ego of the Argentine state.

In a landmark decision last year, the Southern District of New York awarded a judgment totaling approximately USD 16 billion against Argentina, stemming from original awards of USD 7.5 billion and USD 900 million to Petersen and Eton Park respectively, before interest. The calculated interest added substantial amounts, bringing the totals to approximately USD 14.3 billion for Petersen and USD 1.7 billion for Eton Park.

Despite this ruling, Burford has faced significant challenges in collecting the award. Earlier in the year, the firm requested that Judge Preska order the Argentine government to transfer its 51% stake in YPF, valued at about USD 4 billion, to a custodial account at the Bank of New York Mellon—a request that underscores the complexity and scale of the enforcement challenge.

The dispute has gained further traction following comments from Axel Kicillof, governor of Buenos Aires province, suggesting a close governmental control over YPF’s directors under the administration of President Javier Milei. This statement has fueled Burford’s strategy to link YPF directly with the Argentine government’s broader economic actions, including the attempted privatization of Aerolíneas Argentinas as part of Milei’s economic reforms aimed at stabilizing the country’s weak financial situation.

Aerolíneas Argentinas has not issued any comments regarding the potential targeting of its assets as part of the litigation.

The ongoing legal saga and Burford Capital’s aggressive pursuit of compensation highlight the intertwined nature of state enterprises and government policy in Argentina, posing significant implications for the nation’s economic landscape and its handling of state-owned entities. This case continues to unfold, drawing attention to the complexities of international law and state liability in cases of nationalization and economic management.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com