United States says it may weigh in on Burford’s US$16-billion Argentina award

The US government is “actively considering” whether to file a statement of interest concerning Burford Capital’s efforts to collect a US$16-billion judgement against the Argentine government.

In a Monday letter, the US Justice Department asked US District Judge Loretta Preska in Manhattan to delay ruling on Burford’s motion for an order requiring Argentina to turn over its 51 percent interest in oil company YPF SA to help satisfy the judgement. The US government said it would submit a statement November 6, if it chose to do so.

The case stems from Argentina’s nationalisation of YPF in 2012 and its decision at the time not to comply with company’s by-laws requiring a tender offer to investors. Burford, which subsequently acquired the interests of YPF shareholders and sued on their behalf, stands to make some US$6.2 billion if the full judgement is paid.

It’s not clear what position the US government would take in the Argentina case. Last year, the United States joined France and the United Kingdom in asking a judge to delay a bondholder’s suit against the Sri Lankan government to facilitate negotiations between the South Asian nation and other creditors.

Representatives for Burford didn’t immediately respond to a request for comment. 

If it files a statement, the US position could further complicate Burford’s path to a massive payout after it bought a portion of the case in 2015 for just US$16.6 million. A delay would also provide President Javier Milei with some badly needed breathing room. 

Argentina doesn’t have the money: the Central Bank’s debt liabilities surpass cash on hand, meaning its net foreign reserves are in negative territory by about US$6 billion. South America’s second largest country also owes the International Monetary Fund US$44 billion. 

Moreover, Argentina is again in recession as Milei’s austerity campaign seeks to end the country’s chronic fiscal deficit, further limiting its ability to pay in the short term.