RE: Horses Mouth8 Sep 2023 19:43
The Court previously held that the damages to be awarded will consist of the tender offer price under Formula D of the bylaws calculated in US dollars as of a constructive notice date that is 40 days prior to Argentina taking control and triggering the tender offer obligation. The Court said it must decide as a factual matter whether the operative notice date for the calculation is 40 days before April 16, 2012, when the Presidential intervention decree was implemented, or 40 days before May 7, 2012, when the Argentine legislature took follow-up action. In the Ruling, the Court concluded that April 16, 2012 was the appropriate date.
The calculation of damages using a notice date that is 40 days before the April 16, 2012 takeover was included in Plaintiffs' publicly filed summary judgment brief and would imply tender offer consideration of approximately $7.5 billion for Petersen and $900 million for Eton Park, before interest.
The Court also previously reserved for determination the prejudgment interest rate that would run from the date of the breach in 2012 through the issuance of a final judgment in 2023. The Court accepted that “the commercial rate applied by the Argentine courts is the appropriate measure” and noted that Plaintiffs had pleaded that that rate was “between 6% and 8%”, but “the Court reserves judgment on the precise rate it will utilize”. After the hearing, the Court ultimately applied an 8% rate from May 3, 2012 until the date of the judgment, and thereafter interest will accrue at the applicable US federal rate until payment.
Subject to final computations by the parties’ experts, that finding implies interest of approximately $6.8 million for Petersen and $815 million for Eton Park, yielding a total judgment of approximately $14.3 billion for Petersen and $1.7 billion for Eton Park, or $16 billion in total.
Investors may find notable the Court’s commentary on Burford’s role in the case:
The Court also rejects the Republic’s effort to inject Burford Capital into these proceedings. This remains a case brought by plaintiffs against a defendant for its wrongful conduct towards them, and the relevant question is what the Republic owes Plaintiffs to compensate them for the loss of the use of their money, not what Plaintiffs have done or will do with what they are owed. The Republic owes no more or less because of Burford Capital’s involvement. Furthermore, the Republic pulled the considerable levers available to it as a sovereign to attempt to take what it should have paid for and has since spared no expense in its defense. If Plaintiffs were required to trade a substantial part of their potential recovery to secure the financing necessary to bring their claims, in Petersen’s case because it was driven to bankruptcy, and litigate their claims to conclusion against a powerful sovereign defendant that has behaved in this manner, this is all the more reason to award Plaintiffs the full measure of their damag
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