Burford Capital Share Discussion Threads

[extrader] 28/2/2024 01:43

Thanks to Seb for the link to this:

hxxps://www.prnewswire.com/news-releases/ad-hoc-committee-of-province-of-la-rioja-bondholders-responds-to-the-provinces-recent-announcement-regarding-payments-under-its-green-bond-302073253.html


NEW YORK, Feb. 27, 2024 /PRNewswire/ -- The Ad Hoc Committee of Province of La Rioja Bondholders (the "Province" and the "Ad Hoc Group") issues the following statement in response to the announcement of the Province of its failure to make timely payment under its restructured green bonds due 2028 (the "Green Bonds"):

The explanation by the Province of its failure to pay, which it attributes to the current economic situation in Argentina, is entirely specious. In fact, the problem with the Province is the disdain of its government for complying with legal and contractual obligations. The majority of proceeds from issuance of the Green Bonds were invested by the Province in its wind farm projects under Parque Eolico Arauco S.A. ("PEA"). In December 2022, the Province concluded a sale of 100% of Vientos de Arauco Renovables S.A.U., one of the undertakings of PEA, for US$171mm to Pampa Energia S.A.

Thus, having borrowed money from bondholders to build this project, the Province then sold the project for US$171mm and now purports to be unable to pay US$16mm of capital payment to its bondholders1. The excuses provided by the Province are those of a recalcitrant and recidivist defaulter.

In reality, the Province appears to have never had any intention of making its contractual payments on the Green Bonds (which themselves derive from a previous default in 2020 and a restructuring in 2021). In September 2023, even prior to the presidential elections in Argentina, representatives of the Province already reached out to bondholders with a message that the Province sought a further restructuring of its debt. The non-payment on February 24 was pre-meditated and not a result of exigent circumstances.

While other provinces in Argentina are making considerable efforts to service their debts and repair their credit reputations, the Province of La Rioja is distinguishing itself with a series of dubious records: One of the first provinces to default in 2020. The last province to restructure its debt in 2021. The first (and only) province to default on its restructured debt.

The Ad Hoc Group calls on the Province to change its approach and honor its contractual obligations. Borrowing money from good-faith providers of capital, using that money to build a valuable wind park, selling the wind park for $171mm and then defaulting on the bondholders whose capital made this possible is disgraceful and dishonest.

The behavior of the Province is harmful to the credit reputation of Argentina and its provinces and will constrain economic opportunities for the population of the Province. The Province has expressed its intention to attract investments in lithium and mining, areas where it badly lags its neighboring provinces. It is hard to understand, however, why investors would have interest in long-term investments in a province which does not operate with counterparties in good faith nor honor its legal commitments.

The Ad Hoc Group reserves its right to take prompt legal action against the Province if payment of both interest and principal is not made without further delay.

Shows the pervasiveness of the corrupt mindset that Milei is fighting against.

GLA

[donald pond] 26/2/2024 08:26

AURA news interesting. Sweden look likely to overturn a ban on uranium mining. Bur have funded a big case v Greenland based on reneging on a rare earths mining permit because the ore contained small amounts of uranium. I imagine Denmark are going to try to get out of the hole they have dug for themselves

[chester9] 23/2/2024 12:41

Hypothetically just 3 years ago they could have bought Burford at a fraction of the 16B.That said it would have been an a potential admission of guilt and the Burford shareholders in the main are sticky. They could have even bought the case before Burford did and settled at a much smaller sum.No they just keep kicking it down the road. One day.

[lazg] 23/2/2024 12:30

Also I had a thought: Argentina could hedge its losses by investing in Burford. ;)

[lazg] 23/2/2024 12:29

Same old, same old. Dies anyone habe Preskas judgement on the conversation rate handy? That is the only thing I really worry about.

[chester9] 23/2/2024 12:05

These are the appeal point shared kindly by Seb

[chester9] 23/2/2024 12:04

Thank you Seb Maril for summary.First "Argentina's civil-law system does not recognize a breach-of-contract claim for damages by one shareholder against another for violation of corporate bylaws.".Second, Argentina's civil-law system strictly limits the award of money damages..Beyond its errors on the merits, the district court grossly inflated plaintiffs' damages. The court should have converted damages from Argentine pesos to U.S. dollars using the exchange rate in effect on the date of its judgment (September 15, 2023)."If a foreign court allowed plaintiffs to sue the U.S. Government under U.S. law over conduct that occurred in the United States, created a cause of action not previously recognized by U.S. courts, and then entered a judgment of over $2 trillion (the equivalent proportion of U.S. federal spending last year)-the U.S. Government, the U.S. legal system, and the international community would be rightly shocked.Whether the district court erred in applying governing Argentine law(2.a) Recognizing an unprecedented breach-of-contract action for damages under Argentine law by one shareholder against another shareholder for an alleged violation of corporate bylaws; (2.b.) Permitting plaintiffs to seek damages, even though the Argentine civillaw system limits relief for the breach of a contract to the remedies specified in that contract, and does not authorize damages unless specific performance is impossible or the contract has been terminated; (2.c.) Allowing plaintiffs to bring claims, even though the Republic "acqui[red]" title to Repsol's YPF shares in 2014 after plaintiffs no longer held their YPF shares; and(3) : "And finally (3) Whether, at a minimum, the district court erred in calculating plaintiffs' damages, by: (3.a). Failing to apply the judgment-day rule for currency conversion that applies to "obligations denominated in" a foreign currency under New York Judiciary Law Section 27(b); and (3.b.) Applying the wrong breach date and prejudgment interest rate under Argentine law

[tail_risk] 22/2/2024 18:21

From Greenhaven Road Q4 Letter:Burford (BUR) – The litigation finance company is by definition "playing the long game" as their average case takes almost three years from funding to resolution, but many take significantly longer. As a result, earnings in three years really are being driven by the investments being made today. The two senior managers of Burford each own more than $100M worth of stock. They are building an asset management business. Two of management's priorities with long-term implications are to continue to build out both their data science infrastructure – Burford believes that they have the best proprietary data on legal settlements, which improves their case underwriting and thus long-term returns – and their customer base. Historically, the "deal pipeline" of cases came from law firms looking to get their legal work paid for by Burford so that clients were more likely to pursue their cases. Increasingly, large companies are coming to Burford with cases as a case financed by Burford allows management to pursue a case without hurting current year earnings and their current year bonuses. Burford is currently working with 2 Fortune 50 companies. Working directly with corporates is going to be important for continuing to grow the litigation financing business. Like the rest of Burford's investor base, I am paying attention to their Argentina YPF case because – if and when they can collect their judgement – the potential proceeds exceed the market capitalization of the company. The developments with the new Argentinian president are incrementally positive for Burford. We are also tracking several other material cases, including Sysco, and any indications of continued progress on the corporate front. As discussed in our investor presentation (to investors only) that accompanied our last letter, Burford's business is one where power laws can come into play. In general, they earn good returns on average for "meat and potatoes" type cases but have the potential to earn incredible returns on a smaller basket of cases which can have outsized impacts on business valuation.

[chester9] 22/2/2024 15:59

Read LazG answer

[tomtrudgian] 22/2/2024 15:41

Extrader. What is ‘mom’?

[375uv] 22/2/2024 09:58

Argentina's Opening Brief is due today in the Second Circuit Court of Appeals. Stay tuned.

[stentorian] 22/2/2024 09:26

Extrader

"Unfortunately, there are only 2 'y' tiles in scrabble, vs, 10 x 'z'....."

You could still score even though there are are only two "Y" tiles - there are two blanks.

By the way, there is only one "Z" tile - it is why it scores 10 points.

[lomax99] 20/2/2024 16:26

Well the hedge funds seem to like them:



Perhaps general institutional funds will eventually wake up….. (albeit when the share price is somewhat higher!).

[lazg] 20/2/2024 16:10

Nice little rally, but this stock should be at 20-25 already, even with the uncertainty. Oh well, gotta wait for Mr Market.

[extrader] 20/2/2024 15:48

As LasG says...

My favourite new word - my wife brought back from her astronomy class : 'syzygy'

In astronomy, a syzygy (/ˈsɪz<1;dʒi/ SIZ-ə-jee; from Ancient Greek συζ&#965;γί^5; (suzugía) 'union, yoke', is a roughly straight-line configuration of three or more celestial bodies in a gravitational system.

The word is often used in reference to the Sun, Earth, and either the Moon or a planet, where the latter is in conjunction or opposition. Solar and lunar eclipses occur at times of syzygy, as do transits and occultations. The term is often applied when the Sun and Moon are in conjunction (new moon) or opposition (full moon)

We'll have a great example of a syzygy in action at the next total solar eclipse.

Unfortunately, there are only 2 'y' tiles in scrabble, vs, 10 x 'z'.....

Apols for o/t, it's a slow day...

GLA

[lazg] 20/2/2024 09:23

Month on month?

[tomtrudgian] 20/2/2024 09:16

Thanks Extrader. There is however rather a large difference between interest paid by Argentina and interest accrued (payable but not paid).

You mention ‘mom’. Forgive my ignorance, but what is ‘mom’?

[extrader] 19/2/2024 20:19

Ashmore on Argentina

"Argentina: The Treasury reached an ARS 2trn primary surplus in January, the first monthly surplus excluding interest payments since 2011, a sign that the country is moving forward with its aggressive fiscal consolidation despite political challenges. Argentinian Eurobonds rallied last week after reports that Milei was considering breaking down the omnibus bill into several “digestible221; bits and deepen its alliance with Macri’s Juntos por Cambio, a pragmatic turn. CPI inflation increased to 254% yoy in January, from 211% in December, slightly less than expected. In mom terms, CPI inflation fell from 25.5% to 20.6%."

Steady as she goes...

[dagoberia] 12/2/2024 17:04

TBC, yes true. I only meant that the media have portrayed this ruling as a significant blow for Bur. Bnnbreaking in particular, their article emphasises the far reaching impact on litigation funding. Thankfully the market didn't overreact as it normally does..

[maddox] 12/2/2024 16:17

This Sysco case ruling has no bearing on YPF.

Ironically the Judge has sided with the Meat Producers - on the basis that BUR was delaying a settlement - when one might consider this case is an obvious delaying tactic?!? Whilst this has jeopardised BUR directly managing the case settlements, for the moment at least, it doesn't get the collusive Meat Producers off the hook or inevitably reduce the size of the settlement.

[chester9] 12/2/2024 16:14

Appeal arguments due from Argentina on 22nd. Burford update due in mid March. Given the recent cash raises there is still plenty of demand for Burford services, added to that we should see more unwinding of covid delayed cases in Q4. Update should be pretty positive.

[dagoberia] 12/2/2024 15:14

Bur share price as unpredictable as ever.. rather bad news from the chicken case, I thought this would drop.. the opposite. I guess the market thinks this ruling cannot impact YPF