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Two additional investigations ordered in YPF trial for expropriation

2020-07-15T00:23:15.800Z


It was decided by the judge who handles the case in New York. The plaintiffs are seeking compensation of up to $ 5 billion


Martín Bidegaray

07/13/2020 - 21:41

  • Clarín.com
  • Economy
  • Economy

The YPF expropriation, which the Cristina Kirchner government carried out in April 2012, remains unsolved in the judicial field. Judge Loretta Preska, who is handling the case in New York justice, ordered Monday to carry out two additional investigations to determine if Argentina has to pay a million dollar compensation for that decision.

Investigations must be conducted from now until March 2021. And the trial will resume in June of next year. The Southern District of New York, which is the court handling the case, will try to determine the validity of the Burford Fund's claim. That firm retained the rights to litigate Petersen Energía, a company that belonged to the Eskenazi family. Petersen Energía held 25% of YPF until the expropriation.

At stake is a compensation of between $ 3.5 billion and $ 5 billion .

Preska decided to carry out two processes, which are called "discovery". These are in-depth investigations into different aspects of the trial. Argentina requested it because it continues to try to settle the lawsuit through the statutes of Argentine commercial laws. Burford, on the other hand, is requesting it for more information.

But neither party would be interested in investigating thoroughly the curious acquisition of 14.9% of YPF by Petersen Energía , back in 2007. That purchase of shares in the largest company in the country was made with a “seller loan” and with the transfer of future dividends from YPF to the Spanish Repsol, which was the majority shareholder.

"What happened is bad for both of us. On the Argentine side, perhaps things can be discovered that the current government does not want to be discovered. And on the Burford side, if those things are discovered, it is possible that the judge declares the case null, because it was legally privatized and nationalized, "explains Sebastián Maril, director of Research for Traders.

Carlos Zannini, current Treasury attorney and legal defender of Argentine interests, was director of Banco de Santa Cruz until December. He represented the province in that entity, which is owned by the Eskenazi family, that is, the Petersen group .

“Argentina will look for experts who say why Argentine law in corporate terms (of a dispute between shareholders) should be applied in the state of New York, which is possible. And Burford looks for information that they want to ask. It will come in trial next year, "adds Maril, who knows the case like few others.

In June 2019, Burford requested a summary judgment (a resolution process) on this trial. And he was expected to insist on that request. Instead, he chose to ask for more "investigation."

Burford retained the legal rights of Petersen Energía and Petersen Energía Inversora, which are the plaintiffs. Those companies were created by the Eskenazi family to acquire 15% of YPF. Then they bought another 10 percent. However, the Eskenazi clarified that the rights of that trial against Argentina were acquired in Spanish justice by Burford Capital.

Those companies litigate against the country, asking for compensation for rights that would have been breached in the expropriation of 51% of the oil company . Judge Loretta A. Preska, of the southern court of New York, ruled that this lawsuit can be settled in Argentina. He understands that the case is in the “public interest”, which is why the trial will be held in New York.

The magistrate is the heir to Thomas Griessa. In that court, the lawsuits for non-compliance with the sovereign debt will be processed, in the event that there is no agreement with the creditors.

In April 2012, Argentina expropriated 51% of YPF. That act was later endorsed by Congress. But, to comply with US law, another step was missing. In 1993, when YPF was privatized, the oil company agreed to US stock regulations . Among them, that any significant movement in the shares - such as a change in ownership of the majority - must reach all shareholders. In this case, according to the plaintiffs, the State should have made an offer for the remaining 49%.

The Mauricio Macri administration tried to make the trial take place in Argentine jurisdiction, but it did not succeed either in court, in the Court of Appeals or in the Supreme Court of Justice. The previous defense's estimate (between 2016-2019) was that it could cost between $ 3.5 billion and $ 5 billion .

According to Burford, there are statements by Guillermo Nielsen - current YPF president - where procedural errors in the expropriation process are admitted. That fund understands that this gives him arguments to be compensated.

Source: clarin

All business articles on 2020-07-15

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