U.S. Government Opposes Forcing Argentina to Forfeit YPF Stake in $16.1 Billion Court Dispute

U.S. Backs Argentina in Protecting YPF Stake Amid $16.1 Billion Judgment

The U.S. government has urged a federal judge to protect Argentina from surrendering its 51% stake in oil giant YPF, aiming to shield the country’s sovereign assets amid a $16.1 billion judgment. The Justice Department argues that compelling Argentina to forfeit its stake risks undermining both sovereign immunity and U.S. foreign policy.

DOJ Cites Sovereign Immunity Concerns

In a letter to Judge Loretta Preska, the Department of Justice (DOJ) emphasized that U.S. courts lack the authority to seize foreign property outside U.S. borders. The DOJ stated that forcing Argentina to transfer YPF shares, held by investors through litigation funder Burford Capital, could violate sovereign immunity principles and set a problematic precedent for U.S. international relations.

Background of the Case

The judgment stems from Argentina’s 2012 nationalization of YPF, a decision that excluded offers for minority-held shares, impacting investors such as Petersen Energia Inversora and Eton Park Capital Management. Burford, representing these investors, seeks a significant portion of the awarded damages.

Potential Implications

Argentina’s appeal against the decision aligns with economic challenges and austerity measures under President Javier Milei, whose administration faces high inflation and poverty. Meanwhile, the DOJ's stance cautions that altering sovereign immunity could endanger U.S. assets abroad.

Conclusion

The DOJ contends that respecting Argentina’s immunity is critical, warning that a forced turnover could set risky precedents in global property disputes. Judge Preska has yet to issue a final ruling.