Burford Capital responds to US court decision in YPF litigation

Legal-focussed finance and asset management company Burford Capital updated the market on the Petersen and Eton Park litigation against the Republic of Argentina and YPF on Monday, in the United States District Court for the Southern District of New York.

The AIM-traded firm said that, following a decision by the court on 31 March, which granted summary judgement on the liability against Argentina, an evidentiary hearing was scheduled to determine specifics related to Argentina's supposed tender offer for YPF shares and the applicable pre-judgment interest rate.

That hearing took place on 26-28 July.

After the hearing, the court issued its findings, ruling in favour of Petersen and Eton Park, the plaintiffs in the case.

The court determined that the correct date for the tender offer was 16 April 2012, and set the pre-judgment interest starting from 3 May 2012, with a simple interest rate of 8%.

Following the ruling, Petersen and Eton Park were instructed by the court to draft a proposed judgement reflecting the findings for its review.

As per Burford Capital's analysis, the implications of the ruling could result in a judgement of around $16bn against Argentina.

Burford said the ruling represented a significant victory for Petersen and Eton Park against the Republic of Argentina, marking the culmination of legal proceedings that could lead to potential high-end damages.

“We have been pursuing this case since 2015 and it has involved substantial Burford management time along with the dedicated engagement of a team of some of the best lawyers on the planet from multiple law firms and world-class experts - going up against very good lawyers, and winning,” said chief investment officer Jonathan Molot, who was leading Burford’s work on the case.

“Burford is uniquely positioned to pursue these kinds of cases and secure wins for clients and substantial returns for shareholders - not only because of the size and scale of these kinds of cases, but because of the internal and external resources we can uniquely bring to bear.”

Molot said there was no aspect of this case, from strategy to minutiae, that did not involve an experienced Burford team spending many thousands of hours getting to this point.

“This case represents what Burford is all about and exemplifies the contribution we make to the civil justice system - without us, there would be no justice in this complicated and long-running case for Petersen and Eton Park.”

Christopher Bogart, Burford's chief executive officer, added that in its recent shareholder letter, the firm referred to the YPF-related assets as one of its four pillars of value.

“I'm pleased to see this extraordinary win and the value it could create for our shareholders once we complete the litigation process and collect from Argentina.

“The ruling is a major milestone for Burford and we continue to see momentum in our overall portfolio and continued demand for our capital and services.”

At 0900 BST, shares in Burford Capital were down 5.88% at 1,265.02p.

Reporting by Josh White for Sharecast.com.