US Says It May Weigh In on Burford’s $16 Billion Argentina Award

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

In a Monday letter, the 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% interest in oil company YPF SA to help satisfy the judgment. The US government said it would submit a statement Nov. 6, if it chose to do so.

The case stems from Argentina’s nationalization 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 $6.2 billion if the full judgment is paid.

It’s not clear what position the US government would take in the Argentina case. Last year, the US joined France and UK 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 Monday. 

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 $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 $6 billion. South America’s second largest country also owes the International Monetary Fund $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.  

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