New wink of the American eye: the multi-million dollar lawsuit against YPF and the Argentine state will not start yet

After the
legal backlash last Friday, when the Court of Appeal of the Second Circuit of New York decided that it was already possible to start the lawsuit against

YPF

and the Argentine state without waiting for the US Supreme Court to decide in which jurisdiction, the judge in charge of the case, Loretta Preska, indicated that the dispute will only begin when the Court of Appeal has published the submitted documents. to appeal the decision.

The lawsuit of Burford Capital Limited's megabuffer against YPF and the Argentine state for the nationalization of the oil company in 2012 has two legal channels. On the one hand, the US Supreme Court must decide the jurisdiction of the litigation: it is developed in the United States – as Burford wants – in Spain – because the fund has bought back the lawsuit to the Spanish companies Petersen Energía and Petersen Inversor -, or Argentina – as desired by YPF and the government -.

On the other hand, the beginning of the trial is being decided: should it start or not, even if the Supreme Court has not yet rendered its jurisdiction? Last Friday, the Court of Appeal indicated that the dispute should begin in the same way. The Argentinian lawyers have filed an urgent request with the Court of Appeal requesting reconsideration of the decision in order to render the judgment final.

Today, Judge Preska ruled in favor of Argentina and said she would not proceed to trial until she expected to what the Court of Appeal renders a decision on the presentation presented by Argentina.

The Argentinian lawyers insist in particular that the trial begins once the Supreme Court has decided jurisdiction. In that case, the Supreme Court justices asked the Attorney General of the United States – the White House lawyer – to review the case without any predefined deadlines.

The new decision of the Court of Appeal is expected in the coming weeks to know whether the trial should begin or not. Although this is not a final decision, as there are still cases to continue to appeal.

The bottom

The problem began six days before the third anniversary of the nationalization of Kirchner's control of the oil company. In April 2015, Burford Capital Limited, a megabuffer with badets of more than US $ 500 million, filed a lawsuit in the Southern District Court of New York against the oil company and the state for alleged breach of commitments made with stockholders. from YPF.

The claim has no established amount, but in the market, it is estimated at about 3 billion US dollars. The weak point of the country is the burden left by the Eskenazi family, which entered the company in 2008 as part of an operation in question. Among the other companies, the Eskenazi created the companies Petersen Energía Inversora and Petersen Energía. Burford bought the bankruptcy of both – it happened after the nationalization – which he uses to plead against the country.

The plaintiffs argue that the status of the oil company violated the rights of the minority shareholders, who had not received an offer to sell their stake. In 1993, as part of the privatization of YPF, Carlos Menem's government had offered nearly 100% of the company's capital through clbad D shares and had listed the ADRs – the title under which the Foreign papers are exchanged. the United States on the New York Stock Exchange.

At that time, the country and the company pledged that any subsequent acquisition of some of the company's control would require bidding for the total shares. This reservation is contained in the documents that YPF sent to the SEC (the US securities regulator), as well as in its old law.

The local lawyers' argument is that the nationalization of YPF took place under the Sovereign Immunity Act and did not violate US public offer laws.

This option would force Burford Capital to resort to the Argentine courts, as the government wishes. However, the US court rejected this argument on two occasions: in first and second instance, by a decision of the Southern District Court of New York. Axel Kicillof rejected before the Senate the possibility for the country to bet everything. "Believe me, if we wanted to buy shares to enter the company and spend 15%, he jumped on the bear trap and had to buy 100% at a value equivalent to $ 19 billion because the morons are the ones who think that the state must be stupid and buy everything according to the law of the YPF itself, in respect of its status! ", Said. The complainants used these words to justify the country's failure to comply with the laws.

The case was born badly for Argentina. He had to decide at first instance before the court of Loretta Preska, successor of Thomas Griesa, and in second instance. In addition, the test was not perceived by Kirchner's management.