Litigation funder Burford Capital can expect to recoup billions after a successful investment in a case against the government of Argentina.

A judge in New York ruled on Friday that the republic should pay around $16bn (£12.8bn) to shareholders over the 2012 seizure of an oil and gas company. The amounts are split between $14.3bn for Peterson Energia Investors and £1.7bn for Eton Park Management Capital.

Burford subsequently revealed that it is entitled to around 35% of any proceeds generated in the Peterson case and around 73% of the proceeds from Eton Park. The funder had already sold around half of its entitlement in the Peterson case to third party investors, reducing its net share of the proceeds.

Argentina has indicated its intention to appeal and still has the ability to seek review from the US Supreme Court, although Burford said in its statement to the London Stock Exchange that the likelihood of this being accepted was low.

The funder said that with an enforceable judgment in hand, the claimants will either need to negotiate a resolution of the matter with Argentina – which would result in a substantial discount to the judgment amount in exchange for agreed payment – or engage in a probably lengthy enforcement campaign.

Jonathan Molot, Burford’s chief investment officer who lead the funder’s work on the eight-year case, said: ‘Burford is uniquely positioned to pursue these kinds of cases and secure wins for clients and substantial returns for shareholders - not only because of the size and scale of these kinds of cases, but because of the internal and external resources we can uniquely bring to bear.

‘There is no aspect of this case, from strategy to minutiae, that did not involve an experienced Burford team spending many thousands of hours getting to this point.’

The New York court had rejected the Argentina’s attempt to add Burford into proceedings, saying the case was about alleged wrongful conduct by the defendants and not what the claimants plan to do with the money owed.

The ruling added: ‘The republic owes no more or less because of Burford Capital’s involvement. Furthermore, the republic pulled the considerable levers available to it as a sovereign to attempt to take what it should have paid for and has since spared no expense in its defence.

‘If plaintiffs were required to trade a substantial part of their potential recovery to secure the financing necessary to bring their claims, in Petersen’s case because it was driven to bankruptcy, and litigate their claims to conclusion against a powerful sovereign defendant that has behaved in this manner, this is all the more reason to award plaintiffs the full measure of their damages.’

Burford’s shares closed on Friday 22% up in London and 14.7% up in New York. 

 

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