Financing record-breaking litigation
- General commercial litigation
Challenge: Expropriation of energy firm causes investors’ insolvency
When shareholders bought shares of an Argentine government-controlled energy company in an initial public offering, it was promised that if the energy company were re-nationalized, Argentina would pay fair value to shareholders. When Argentina ignored that promise and expropriated a controlling stake in the energy company, the shares’ market value fell sharply — causing two shareholders, including the largest minority shareholder, to become insolvent and thus unable to repay creditors.
Solution: Financing to pursue legal claim against sovereign
The shareholders’ legal claims represented their most significant assets and their best paths toward creditor repayment. Nevertheless, progress stalled: The now-insolvent companies had strong cases on the merits but lacked the resources to pursue a protracted legal claim on their own — and traditional capital providers were unable to recognize the asset value of the claim.
Using the shareholders’ claims as collateral, Burford provided the financing they needed to move forward, ensuring the shareholders would have the resources to pursue the case without being forced into an early settlement.
Impact: Loss recovery and creditor repayment after financing secured
As a result of securing finance, the shareholders — and their creditors — finally had a clear path to recovery and eventually being made whole. Because Burford recognized the asset value of the shareholders’ claims, the insolvent companies recovered their losses and repaid their creditors.
As for the case itself, the courts in 2023 ruled in favor of the shareholders—the largest judgment ever issued in the United States — and Burford is in the process of enforcing the judgement while Argentina attempts an appeal. The potential recovery from this judgment is so large that its value has led to multiple secondary market transactions, and the press that it attracted led to Burford’s team being named as Litigators of the Week by AmLaw Litigation Daily.
