Shares of Burford Capital tumbled by more than 36% on Friday after trading was interrupted several times for volatility, following a decision by the 2nd U.S. Circuit Court of Appeals in Manhattan to set aside a $16.1 billion judgment against Argentina linked to the 2012 seizure of state-owned oil company YPF.
The appeals court issued its ruling on Friday, removing the lower-court award that had been granted in September 2023 to former YPF shareholders Petersen Energia Inversora and Eton Park Capital Management. That award had been calculated at $16.1 billion, and with accumulated interest had grown to roughly $18 billion by the time the appeal was argued.
Burford Capital had financed the litigation on behalf of the claimants and would have been entitled to collect a substantial portion of any award that survived the appeals process. With the appellate court overturning the judgment, the immediate prospect of recovery tied to that verdict was materially altered, a development that was reflected in the company’s sharp share-price move and the market’s need to halt trading as volatility spiked.
The original judgment had found in favor of Petersen Energia Inversora and Eton Park Capital Management for losses they said resulted from Argentina’s nationalization of YPF in 2012. Argentina had been pursuing relief from that award through the appeals process, a challenge that the 2nd U.S. Circuit ultimately decided in its ruling issued on Friday.
Market reaction was swift as investors reassessed Burford’s exposure to the outcome of the case. The company’s role as the funder of the litigation meant that a significant reversal on appeal could change the expected distribution of any previously granted damages. The decision therefore had immediate implications for Burford’s near-term value and investor sentiment.
As the situation develops, parties involved and market participants will be watching for any further legal steps or procedural actions that could follow from the appeals court’s decision. For now, the appellate ruling significantly reduces the enforceability of the September 2023 award and has produced a pronounced market response.
Contextual note: The information above reflects the appellate decision and the market reaction as reported following the ruling. Details about further legal motions or subsequent proceedings were not provided in the reporting available at the time of publication.