The U.S. Department of Justice is siding with Argentina in a legal case of $18 billion relating to the 2012 nationalization of Argentinian oil company YPF.
In 2012, the Argentine government took control of the country’s largest oil and gas company, YPF S.A.
The legal fight stems from Argentina’s 2012 expropriation of YPF shares from Spain’s Repsol without extending a mandatory tender offer to YPF’s then minority shareholders—Petersen Energia and Eton Park Capital.
After the renationalization of YPF in 2012 and the bankruptcy of the Petersen companies, UK fund Burford Capital and U.S. fund Eton Park acquired the claims against YPF and Argentina from companies that were minority shareholders of the oil company, including Petersen.
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Backed by Burford Capital, those shareholders sued in the U.S. and have been awarded damages totaling $16.1 billion, and growing to an estimated $18 billion with interest post-litigation.
In a March 2023 ruling, U.S. District Court Judge Loretta Preska held the Argentine Republic liable for claims by the two minority shareholders, for failing to offer to purchase shares from the other shareholders at the time of the expropriation in 2012. She reasoned that YPF’s bylaws did not obligate the company to enforce the tender offer, and that it was the acquiring shareholder, Argentina, that was liable for failing to do so.
The plaintiffs, however, have not collected the award as the case has been dragging on in U.S. courts.
The plaintiffs now claim that Argentina has failed to turn in as evidence texts and emails from officials to former YPF shareholders.
The DOJ this week urged a U.S. federal judge not to hold Argentina in contempt for allegedly failing to turn over these materials.
Allowing “burdensome and intrusive” discovery on foreign officials “could lead to reciprocal adverse treatment of the United States and its officials in foreign courts,” the DOJ said in a court filing, as carried by Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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