Argentina was sued by former minority owners of oil and gas corporation YPF in New York in 2023 for not allowing them to sell their interests following the company’s 2012 nationalization. In a lengthy discovery fight over Argentina’s seizable assets, Judge Loretta Preska ordered current and previous economics ministers to provide their WhatsApp chat records. The mandate would violate current laws, according to Argentina’s lawyers.
After winning the US$16.1 billion case, hedge firm Burford Capital is identifying seizable assets. Preska ordered Argentina to hand over current and previous economic minister’s correspondence and conduct a thorough asset probe. This includes embassy buildings and other inviolable assets. Preska ordered Argentina to transfer 51% of its YPF shares to Burford in June, but an appeals court judge stayed the transaction. According to a source, Burford wants to pressure Argentina into negotiations, not expropriate the shares. On July 29, she said Sergio Massa and Luis Caputo’s WhatsApp texts will be provided. Caputo’s request stems from Argentina’s reluctance to reveal the Central Bank’s gold holdings, which Burford wants as a partial payment. Argentina’s lawyers asked Preska to reconsider the decision in August. They claim that the Argentine state does not have the texts and that getting them would violate the law. Preska denied it last week. She argued in an August 27 decision that “the emails of officials, sent and/or received in the course of their duties, that are not sent through official mailboxes are also public documents.” She said Argentina may get the messages by asking the people involved, modifying its laws, or having a local court order a transfer.
Argentina wants to restrict discovery to executable assets, while Preska and Burford want a full probe. Preska indicated on Tuesday that Burford was only gathering asset information to identify prospective Argentine properties for confiscation. An informed source said Burford wanted “an inventory of all the assets owned by Argentina to get an idea of an amount comparable to what they are trying to seize.” Argentina refuses to provide non-seizable assets. These include shares in state-owned firms that require Congressional permission for transfer to Burford and public utility or service assets like overseas embassy residences. “The discovery requested by the plaintiff lacks defined parameters or criteria,” the person said. The goal is to require Argentina to reveal all of its assets, not just potentially seizable ones. October 10 is the hearing date. Argentina’s Congress expropriated 51% of YPF shares from Repsol, which owned the majority holding, in 2012, giving the state majority control. Three years later, Burford Capital gained the right to sue on behalf of Petersen Energia Inversora and Petersen Energía, two enterprises linked with the local Ezkenazi family, who kept a portion of the remaining shares
In 2015 and 2016, Burford and Eton Park, a minority stakeholder, sued Argentina. They claimed that the nation failed to offer to buy their YPF shares during nationalization, causing significant financial losses. Preska ordered Argentina to pay the plaintiffs US$16.1 billion for nationalization contract breach in September 2023. The case is on appeal. The Second Circuit Court of Appeals must rule, which might go to the Supreme Court.