Interesting1 Jul 2022 23:10
What does Burford claim?
Burford, who initiated the lawsuit after acquiring the rights to litigate against Argentina for the renationalisation of the 25% that Petersen Energía had before the expropriation, alleges that since the government of Cristina Kirchner expropriated 51% of the shares of YPF should have made a Public Offer of Shares (OPA) for 100% of the company and therefore also compensate 25% held by Petersen Energía, as explained in more detail in this article published in July 2019.
This is established, the fund argues, in article 7 of the company's statute, which instructs that if a company acquires 15% or more of YPF's share package it must unfailingly carry out a takeover bid for the total of the company. Burford understands that this clause is automatically applicable.
In the government they maintain that the application of that point of the statute is not exhaustive because they argue that the formulas of valorisation of the oil company included in the YPF statute collide with the sovereign right of the State to expropriate a strategic asset.
What does the statute establish? It defines a series of schemes to calculate the price of YPF in case a shareholder acquires more than 15% of the company's shareholding package. On that basis, he maintains that the highest price that emerges from the calculation formulas is the one that must be paid by whoever wants to take control of the oil company. By May 2012, when the renationalisation materialised, the valuation of YPF would have reached US$ 19 billion if the highest price resulting from the formulas included in article 7 of the statute were taken. That is, following the logic of Burford's reasoning, Argentina would have had to pay US$ 19 billion to avoid an eventual claim by Petersen Energía in the order of US$ 3 billion.
In turn, Burford maintains that, if the person landing in the company does not carry out a takeover bid for 100% of the company, the YPF itself, the board or the management, he has the obligation not to let the new shareholders who took control vote without taking over the takeover bid.
What can Preska solve?
Sources with access to the case told EconoJournal that Preska will most likely rule in favour of Burford because, although there was an expropriation law, the judge will seek to claim the value of contracts in Defence of private investors because otherwise any contract signed between private individuals would have no value in the face of a sovereign decision of a State and, therefore, it would
The source pointed out that if I had to assign a percentage of probabilities to an adverse judgement against Argentina I would say that it is more than 50%, but at the same time clarified that it is most likely that the ruling falls only on the Argentine State and not on YPF, since the demand that YPF management prevents it from voting for the newly disembarked representatives of the State in the company's assembly is absolutely
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