Burford Capital: Second Circuit Reverses YPF Judgment — Key Implications for Investors

Overview

On March 27, 2026, Burford Capital Limited (“Burford”), the leading global finance and asset management firm focused on law, released a detailed statement regarding a significant development in the YPF litigation. The United States Court of Appeals for the Second Circuit issued a decision reversing the District Court’s previous judgment in favor of Petersen and Eton Park, the minority shareholders in Argentina’s YPF expropriation case. This decision has major implications for Burford, its investors, and the broader US capital markets.

Key Points from the Second Circuit Decision

• Reversal of Judgment: The majority of the three-judge panel reversed the lower court’s ruling in favor of the minority shareholders, Petersen and Eton Park. Judge Cabranes dissented, supporting the original decision.
• Findings on Argentina’s Conduct: The Court acknowledged Argentina’s “knowing and flagrant violation” of promises made to foreign investors. It stated that Argentina had assured minority shareholders of a tender offer and a compensated exit if Argentina retook control of YPF, protections crucial for attracting over \$1.1 billion from US-based investors. The Court noted that Argentina’s failure to honor these commitments undermined confidence in foreign investment in the country.
• Forum Non Conveniens Rejected: The Court dismissed Argentina’s argument that the case should be heard in Argentina rather than the US, a point closely watched by investors.
• Shareholder Rights Undermined: Despite Argentina’s clear violations, the majority found that the commitment to make a tender offer was not enforceable by the aggrieved shareholders. The panel reasoned that since Petersen and Eton Park’s claims were related to the expropriation, they should have been brought in Argentina’s compensation process, which is widely viewed as unfavorable to US investors.
• Dissenting Opinion: The dissent emphasized that the majority’s opinion minimized the real-world consequences for investors and argued that the District Court’s original judgment should have been upheld.

Next Steps for the Plaintiffs

• Plaintiffs are expected to seek a rehearing en banc by the entire Second Circuit, though such requests are rarely granted. The deadline for this filing is 14 days from the decision.
• If en banc review is denied, plaintiffs may consider seeking review from the Supreme Court of the United States.
• Burford indicates that, regardless of US court outcomes, investment treaty arbitration against Argentina remains a viable and potentially lucrative option. Arbitration has yielded significant wins against Argentina in similar past cases.

Potential Financial Impact on Burford Capital

• Partial Write-Down Expected: Burford’s valuation policy requires a partial non-cash write-down of assets following an intermediate appellate loss. The magnitude is yet undetermined but will be disclosed in Burford’s Q1 financial reporting, expected in early May.
• Balance Sheet Implications: Given the significant carrying value of the YPF matter, a material write-down could reduce Burford’s equity below thresholds required to incur additional debt under senior note indentures. This would limit Burford’s ability to issue new debt and restrict certain payments or investments. However, Burford no longer has outstanding debt with maintenance financial covenants that would be immediately impacted by a decline in equity.
• Core Business Remains Strong: CEO Christopher Bogart emphasized that Burford’s business is diversified, with the core portfolio continuing to perform strongly. The company has recently raised additional capital and remains focused on long-term financial strength.

Strategic and Investor Considerations

• Shareholder Sensitivity: The YPF case has a substantial carrying value for Burford and any write-down could materially affect equity values and perceptions of the company’s financial health.
• Potential Share Price Volatility: The reversal of the judgment, potential asset write-down, and limitations on future debt issuance are all material, price-sensitive events that could impact Burford’s share price in the near term.
• Path Forward: Investors should monitor further court and arbitration developments, as a favorable outcome in arbitration or at the Supreme Court could partially or wholly reverse the financial impact.

Contact and Further Information

For questions or further details, investors and analysts are encouraged to reach out to Burford’s investor relations team in the Americas, EMEA, and Asia, or visit www.burfordcapital.com.

Disclaimer

This article is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those projected. Investors should review all risk factors and cautionary statements in Burford’s filings with the US Securities and Exchange Commission. The information herein should not be relied upon as investment advice.

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