With a historic $16 billion US court judgment in hand, former shareholders of Argentina’s state-controlled oil company YPF are pushing for the country to pay up for appropriating their stakes. This legal saga echoes a previous case led by hedge fund Elliott that spanned 15 years and included dramatic measures such as seizing an Argentine vessel before a settlement was finally reached in 2016. Now, backed by Burford Capital, the battle to enforce the judgment is escalating, with accusations of Argentina’s obstructive tactics causing friction.
- The Legal Showdown:
- Argentina’s new president, libertarian Javier Milei, stands in stark ideological opposition to his left-wing predecessor, Cristina Fernández de Kirchner, whose administration oversaw the 2012 expropriation of YPF. Milei has expressed a willingness to settle the judgment if Argentina’s appeal fails, hinting at a privatization agenda for YPF and other state entities. However, the legal back-and-forth between Argentina and the plaintiffs remains acrimonious.
- Examining State-Owned Assets:
- Plaintiffs are seeking to probe Argentina’s state-owned entities, arguing that they are essentially extensions of the government, making them susceptible to asset seizures. This move could potentially pave the way for the collection of the judgment against Argentina through these assets.
- Potential Targets for Seizure:
- YPF: The plaintiffs are eyeing the New York law-governed corporate bonds of the energy giant YPF, which could be vulnerable to seizure if the company is deemed an “alter ego” of the state. With valuable oil and gas fields, YPF’s assets are at risk amidst the legal standoff.
- Argentina’s Central Bank: Plaintiffs claim that the central bank serves as a state-controlled tool, citing recent governmental maneuvers that raise concerns about the bank’s accessibility to creditors. The whereabouts of some of the central bank reserves remain shrouded in mystery, adding a layer of uncertainty to the proceedings.
- Aerolíneas Argentinas: The state-owned airline has become a focal point in the legal battle, with arguments over political appointees in key positions raising questions about the airline’s operational independence. As calls for privatization intensify, the future of Aerolíneas Argentinas remains uncertain.
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Arsat, Enarsa, Banco Nación: State-owned telecommunications company Arsat, energy company Enarsa, and Banco Nación, Argentina’s largest retail bank, present additional targets for potential asset seizures. The plaintiffs are exploring avenues to gather information on these entities’ overseas assets, reflecting a deepening conflict between Argentina and its former shareholders.
In the midst of legal wrangling, the fate of Argentina’s assets hangs in the balance, as plaintiffs seek to recover their dues while Argentina maneuvers to safeguard its interests. The showdown continues, each move amplifying the stakes and tensions between the parties involved.
