Gettin' Paid or Gettin' Milei-d
Updates on $BUR/Argentina/YPF
In September of 2023, Judge Preska of the Southern District of New York entered a judgment for over $16 billion against the Republic of Argentina in the case involving the expropriation of YPF. It was a case I had written about a few times on Valorem. Once the judgment hit the docket and the case shifted from liability to enforcement, my involvement in the name ended. These enforcement actions, as we’ve seen with the Venezuela claims and associated Citgo auction, can get messy, and often involve as much political jockeying as they do litigation of the merits.
When Javier Milei was elected to lead Argentina in the October 2023 general elections, I considered getting back in the name. Milei had publicly stated during his campaign that Argentina had to pay its debts, including the massive $16.1 billion S.D.N.Y. award. He even hinted at privatization of YPF in November of 2023 as part of a plan to satisfy the foreign judgment. These talks of acquiescing to judgment creditors and the plans to privatize YPF were short-lived though. By January of 2024, Milei had scrapped YPF privatization efforts.
On the S.D.N.Y. docket, things fared no better. In December of 2023, Argentina had asserted in court that it would pledge certain assets and seek expedited review of its appeal in order to facilitate resolution of the YPF case, allowing Argentina to stay execution of the award. The stay of execution was explicitly conditioned on the pledge of assets by the January 10 2024 or Argentina’s request for expedited appeal by January 30, 2024, as Judge Preska had allowed the case to proceed without Argentina being required to post a $16 billion bond due to the obvious “extraordinary circumstances” of the case.
from December 31, 2023 Order
But when February 2024 rolled around, no assets had been pledged, and Argentina sought additional time to file briefing with the 2d Cir. rather than moving to expedite the appeal. Argentina sought refuge in the argument that any pledge of assets would require a vaguely-characterized legislative effort. By April of 2024, plaintiffs began enforcement actions, seeking to compel Argentina to:
give up its 51% holding in YPF in partial satisfaction of the judgment; and
provide discovery (including identification of other assets) related to post-judgment enforcement
What followed was a pattern of delay tactics and discovery disputes with one sole aim: frustrate the enforcement efforts at any cost.
By all accounts, Judge Preska has been exceedingly patient with Argentina despite the fairly obvious bouts of gamesmanship, and likely for good reason. In a case of this magnitude and with diplomatic ties on the line, Judge Preska must give Argentina the benefit of the doubt at all stages.
But the Court’s procedural generosity may be coming to an end.