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dagoberia: According to SDNY Court Rules, Burford has 14 days to respond (if it wants) Argentina's motion to reconsider and then the Republic has 7 days to respond Buford's response. Then Judge Preska will rule on the reconsideration matter.
I don't see the judge changing her mind. She has had this case for 8 years, including 280 days writing the judgment.
- Burford wants hearing on damages and interest rate on May 8.
https://twitter.com/SebastianMaril/status/1647002776914853888
- Argentina wants the Judge to reconsider her ruling.
https://twitter.com/SebastianMaril/status/1647033938051751940
Interesting developments for a Friday evening.
Reuters is reporting that "Argentina looking to issue up to $1.2 bln in bonds backed by World Bank, CAF, according to a source".
Guarantee for the Petersen/Eton ruling?
By the way...if this was a straightforward case, it would't have reached the U.S. Supreme Court and it would have been resolved by now. In less than a month, it will be the 8 anniversary of the filing of this thing.
Pennylots, here are other reasons:
1. Taxpayers: Preska knows that THIS government will not comply with her judgment. She knows that, in 2014, THIS government did not comply with her predecesor's judgment on a sovereign default case which led to a 9-month all-out war in court with 426 different presentations by Argentina and defaulted bondholders. This fight resulted in a new Argy default after Judge Griesa order injunctions on all interest and amortization payments. Preska does not want this BS now. She has better things to do than spending taxpayers' money on a government that defies court orders. Wait until October when Argies will elect new leadership.
2. Politics: In 2015, Argentina and YPF requested a STAY of all proceedings IN THIS SAME CASE, until the newly-elected government drafted its new legal strategy. Preska could be speculating with Argy presidential elections in October and wait until later on in the year to publish her ruling. This will not give THIS gov. enough time to defy her orders and force both sides to request a STAY until new leadership is in power.
3. Politics II: Don't rule out that the U.S. State Department could be delaying this thing until something is worked out privately. We are talking about that (possibly) a U.S. judge telling a foreign nation that its laws are a crap and it needs to compensate a company (from a third nation) billions of dollars. I don't rule out the possibility that we will never get to read Preska's Opinion on this thing because she never gets to release the document.
4. Shadow Litigation. This has been mentioned before in this forum and by Sebastian Maril in Twitter. It makes sense that both sides could be negotiating an orderly resolution although I seriously doubt it.
Hope it helps.
I don't quite believe (yet) that she is "delaying" the ruling. In January I spoke with a witness that was subpoenaed by YPF in December of 2021, as part of the Discovery process. He told me that the company’s U.S. attorneys didn’t expect Judge Preska to announce her decision before December 2022 (as early as 4 month ago). I also consulted with a U.S. legal source without any knowledge of the case who claimed that a ruling on separate motions for summary judgement on "big" cases could take anywhere between 6 to 12 months. Finally, Judge Preska has another 6 cases with pending rulings for more than six months. YPF is not the exception to the rule. This is normal case management.
Do I believe that other reasons could be involved? Yes, but for now, I am sticking with the simplest explanation: this is a complex case.
Cheers.
Pennylots, here are my responses:
(1) Jurisdiction has always been a central issue for Argentina. Since the very beginning, YPF and the Argentine government have categorically rejected the claims made by both Petersen companies and by Burford Capital, arguing that the U.S. is not an appropriate forum for dealing with such a delicate issue. In simple terms, defendants claim that the Petersen companies did not bring the case under the U.S. securities laws. In fact, Argentina and YPF argue that the very instrument pursuant to which the oil and gas company sold the expropriated securities (the indenture), informed investors that YPF’s Bylaws would be “governed by Argentine law” and that “any action relating to enforcement of the Bylaws or a shareholder’s rights thereunder is required to be brought in an Argentine court.” This is not in dispute and Judge Preska agreed three years ago.
(2) Breach of contract has been the main focus for Petersen and Eton. Plaintiffs, on the other hand, insisted that the privatization of YPF in the mid 1990s, involved a Wall Street IPO governed by New York law, and that any dispute involving these shares are subject to New York law, not Argentina’s. This is the reason why Judge Preska said that her court is the proper forum.
(3) For Judge Preska, this case is a matter of interpretation of Argentine law that needs to be decided by a U.S. Court. As "simple" as that. The judge said that she will consider YPF’s Bylaws as an Argentine document and that Argentine laws will be considered during the upcoming judgment. Judge Preska has held that this is a simple breach of contract case governed by Argentine law, but the parties disagree on its interpretation and application.
(4) She has become very knowledgeable of Argentine laws to publish her ruling. It is not a secret that she has deposed Argentine Constitutional experts and consulted multiple scholars to better understand how to rule. This was part of the year-long Discovery.
(5) Forget about who controls the Argy judiciary. Argy laws are very similar to U.S. laws. Both are derived from British Common Law. Concentrate your concerns on whether Judge Preska will interpret Argy law in a way that will benefit Burford.
Hope this helps.
Cheers.
It won’t be easy but Burford will get paid.
Although Argentina is known for defaulting on its interest and amortization payments of its sovereign debt, the same cannot be said about court-ordered awards: Argentina always pays when it loses a case, but not before putting a good fight.
The irresponsible interpretation of international law by those who lead the Republic of Argentina, has resulted in multiple lost lawsuits with just a handful of victories for the sovereign. Since 2000, Argentine taxpayers have paid $17 billion in awards related to lost legal proceedings brought by defaulted bondholders and multinationals who saw their investments expropriated, their contracts terminated or illegally modified by the government. However, beneficiaries of court-ordered awards have consistently faced challenges to receive due payments as the government always puts a good fight and delays settling with claimants.
According to court records, this approach has forced beneficiaries of awards seek legal remedies to enforce rulings and force the Republic pay: it has always worked!!!
Whether injunctions to prevent the sovereign from servicing its debt, embargoes of assets held overseas or attachment of sovereign real estate property, beneficiary of rulings have always received their payments. Today, Argentina has ten beneficiaries of awards using similar legal remedies in an attempt to persuade the government comply with recent orders and pay nearly $1 billion.
Many thanks for the heads up. Maxus seems like a done deal. It remains to be seen whether the Court will allow an announcement this Friday. All this, while Burford remains silent on the Earnings front.
YPF will announce its FY22 and 1Q23 results late on Thursday with a major Investor Day in NY on Friday. Everybody has been invited. Argentina's Minister of Economy is flying. YPF execs will ring the closing bell.
After 250 days without a ruling from Preska, I take any developments.
YPF will be in NY announcing its FY22 results on March 9 and will ring the closing bell in Wall Street on March 10. Friday. Argentina's Economy Minister will join them.
Can anybody find out if someone from BUR C-Suite level executives are expected to be in NY at the same time?
Mark your calendars. I smell something cooking.
This is an excerpt of what we told our clients about Judge Preska's "delay". The report was published early in February:
Opinion: After almost eight years presiding the case and 230 days since all motions for summary judgment were filed, we opine that Judge Preska still has time write her Opinion and Order. According to a witness that was subpoenaed by YPF in December of 2021, the company’s attorneys didn’t expect Judge Preska to announce her decision before December 2022 and a U.S. legal source consulted by us, claims that a ruling on separate motions for summary judgement on a case of this magnitude could take anywhere between 6 to 12 months.
Nevertheless, stakeholders are anxious and want the magistrate to “speak”. The reasons behind Judge Preska’s perceived delay are unknown as she usually does not wait this long to file a ruling. According to the last quarterly report filed by the Justice Department, as of 2Q22, the New York judge only had four cases with overdue rulings (six months or longer), whereas some of her peers in the same court had anywhere between 10 and 25 overdue rulings. This responsible case management by Judge Preska has led those with vested economic interests in the expropriation case, to speculate with different reasons that could explain why the magistrate has delayed the publication of her ruling. We, however, opine that the simplest explanation is the best one: the expropriation case is complex, expands across three countries, will be decided by a U.S. judge who will use Argentine law to make her decision. Adding insult to injury, Judge Preska needs to respond all twelve questions presented by both sides and offer solid arguments to back her decision. This takes time.
Who can blame him. Nothing, absolutely nothing is going on...unless something is being cooked privately. Sebastian himself last week showed how a hedge fund was complaining about Preska and Argentina "litigating in the shadows" with creditors in a separate case.
This silence by both parties' attorneys, by Preska and my Argentina is too loud.
This is the reason why BUR's upcoming FY22 report is so important.
One clarification regarding enforcement of the (likely) judgment. During Argentina's well-known battle with its international creditors (where Argentina finally caved and paid $9 billion to plaintiffs), Judge Preska's predecessor, Judge Griesa, allowed beneficiaries of his judgment seek broad, even extraterritorial, discovery of Argentina's assets. So, don't assume that the enforcement will only take place in the U.S.
Paul Singer pushed Argentina by not only seeking (and winning) injunctions on all sovereign debt payments (forcing Argentina into default), but also seizing a military vessel owned by Argentina's military that was on a trip to Angola.
So, Burford, in the absence of a quick compliance by the Argy government, will have the right to request Judge Preska to grant such discovery of assets.
My money is that Burford has already started such search.
It actually does make sense to me. Remember, Argentina lost the Supreme Court argument which immediately triggered the injunctions on all foreign debt payments. Argentina filed a motion of stay these injunctions but the judge denied it. At the same time, NML Capital had the right to enforce the judgment and it did. The fight got very ugly. For the first time in modern history, a U.S. court found a sovereign nation in contempt (October 2014). An appeal was then filed by Argentina but, the enforcement proceeded.
The same scenario could repeat itself with Burford. With a favorable ruling Argentina will most likely appeal and seek a stay. The judge may grant the stay to prevent BUR from initiating enforcement proceedings. If the stay is granted, then no dispute will take place. However, if Judge Preska rejects Argentina's stay, get ready for the same scenario as in 2014. This is what Sebastian explained us all.
Burford's court experts have calculated the award based on the company's Petersen + Eton holdings between $7b and $19.3 b. This calculation was part of the Motions for Summary Judgment filed in April 2022.
Having said that, Argentina doesn't have that kind of money (never will) and Burford doesn't need it upfront. What can BUR do with, let's say, anywhere between $4b and $10b? My opinion is that if Judge Preska comes out with a favorable ruling, Argentina and Burford will have to sit down a negotiate a 10-year installment plan. Imagine BUR shareholders knowing that they have a guaranteed annual inflow of U.S. Dollars for the next decade. I'm in!
Of course, the IMF and international bondholders will have something to say about this agreement since Argentina is heading for a new sovereign debt restructuring in 2024. Interest and amortization payments start to pile up next year and, if you add this award, it's going to be an interesting challenge for the country's next president.
She got 6 years in prison. She won't spent a single day in jail. As a matter of fact, she could run again and become president next year. Argentine law is very tricky. The conviction is not applicable until the Supreme Court issues its opinion. It could take a couple of years. By then, she will be over 70 years old (69 today) and, in argentina, people 70 years of age or older, cannot be put behind bars. Just serve jail time at home.
It should serve as a message to Judge Preska. These people always play dirty.