Burford Capital Share Discussion Threads

[extrader] 07/5/2024 07:56

Hat tip to Blue Wiley



Elon Musk

@elonmusk
I recommend investing in Argentina

GLA

[maddox] 06/5/2024 10:49

Good find Extrader. Yep its all about the timing.

If a firm could invest in pursuing an advantageous case and gain a favourable outcome within the same financial period - there would be little need for Lit Fin beyond firms that are financially constrained. Firms would finance their cases themselves.

[extrader] 05/5/2024 16:10

Hat tip to BlueWiley

Greenhaven Road Capital shareholder update

From hxxps://www.greenhavenroad.com/investor-letters

Burford (BUR) - As the ancient Greeks said, "The wheels of justice turn slowly, but grind exceedingly fine." As a litigation financer, Burford has funded a large portfolio of legal cases that are working their way through the legal process. Their largest "holding" is a judgement against Argentina related to the YPF case, for which Burford is in charge of pursuing the payout.

If Burford were to collect the full $6.2B (not including post-judgement interest accruing at ~5% per year), this windfall would be worth $28 per share. To be clear, especially given Argentina's history in cases of this type, it is my expectation that Burford will take a haircut in a negotiated settlement. Interestingly, Burford's CIO Jonothan Molot appears on the visitor logs for senior Argentinian officials

(hxxps://audiencias.mininterior.gob.ar/buscar?q=molot)..

at least they are talking.

While the YPF judgment is a massive asset for Burford, it is far from the only case that should start gaining more traction in the near term. Despite receiving $242M of proceeds from $135M of pre-2020 vintage deployments in 2023, Burford still has ~$782M of deployments remaining in that vintage that we should start seeing flow through the P&L in the form of realizations as courts are now fully re-opened and cases delayed by the pandemic conclude.

Similar to the inevitable growth of KKR, excluding a change of law limiting litigation finance, I believe that Burford should continue to grow because of corporate manager incentives. They are solving two problems, particularly for public companies. First, legal cases are a drain on current year P&L. Thus, if a CEO or CFO wants to preserve this year's earnings, they can have Burford pay the legal expenses, resulting in "found money?" It is easy to see a CEO hugging the General Counsel and CFO when they tell him/her that they found the money to "save" the year simply by partnering with Burford.

The second problem is that the market does not generally attribute value to pending legal cases, and GAAP accounting does not help. However, if you sell a portion of the potential outcome to Burford for cash, the market does value that. Want to
"strengthen" your balance sheet, at least optically, for the market or lenders? Sell a part of your case to Burford. One Fortune 50 company partnered with Burford last year for a $325M commitment to their case.

Right now, Burford is the only funder with that scale. CEOs, CFOs, and General Counsels like collecting bonuses. If that means giving up some future economics to Burford, which is playing the justice-turns-slowly game, so be it. With these dynamics, I think demand will grow.

Ultimately, shareholder returns will come down to Burford's case-selection abilities, which historically have been outstanding. Since inception, only 8% of deployments have gone to adjudication and lost, resulting in a ~85% loss of capital to those line items. In contrast, 73% of deployments reached a settlement returning an average of 58% (23% IRR), and the remaining 19% reached a winning adjudication returning an average of 247% (49% IRR).

Time will tell if these high returns continue, but there is a lot of upside potential that is not being priced into shares today. The CEO seems to agree with his recent $5M purchase.

ATB

[kuk1doh] 05/5/2024 16:03

Same as BUR but just a few weeks later… which perhaps goes a long way to explain BURs earlier request to keep the court documents sealed.

[extrader] 05/5/2024 15:51

Seb's latest, overnight :

..Bainbridge Fund wants Judge Preska to compel Argentina to transfer the ownership of all YPF shares expropriated by the Republic in 2012. Bainbridge is one of multiple holdouts with favorable judgment that haven’t yet received payment. Bainbridge is also trying to attach Central Bank assets...

This tweet appears to have received 101.6K views...??

Hmmm...

[extrader] 03/5/2024 19:56

Seb's latest

.."Busy month for Argentina in international courts:

1. May 8: YPF responds to the request to deliver evidence to prove to Judge Preska that it is not the Alter Ego of Argentina.

2. May 15: Province of Buenos Aires defines payment of judgment for USD 35 million to creditor Glacial Capital.

3. May 16: Argentina presents a document opposing the transfer of YPF shares to the beneficiaries of the ruling.

4. May 21: Oral presentation begins in London court for the appeal of the PBI Coupon ruling.

5. May 30: Beneficiaries of the YPF ruling present a document supporting the transfer of the shares into the hands of the State and the provinces...

GLA

[somerset lad] 03/5/2024 15:33

Away from Argentina ... the Competition Appeal Tribunal has published its judgment granting a Collective Proceedings Order in the Spottiswoode case, which is funded by BUR: see hxxps://www.catribunal.org.uk/sites/cat/files/2024-05/14407722%20Clare%20Mary%20Joan%20Spottiswoode%20CBE%20v%20Nexans%20France%20S.A.S.%20%26%20Others%20-%20Judgment%20%28Collective%20Proceedings%20Order%29%20%203%20May%202024.pdf

Details of BUR's funding arrangement (investment up to £30.175m + up to a further £10m; potential payout to BUR to recoup the sums invested + 3 x the sum invested) is at paras 23-25, followed by discussion of compliance of the funding arrangement with the Supreme Court's PACCAR judgment.

For anyone not following, Spottiswoode is a class action against members of the power cable cartel brought on behalf of people who paid for domestic consumption of electricity supplied via the distribution network in Great Britain on or after 1 April 2001 and claim to have paid inflated power prices. (There is a separate case called London Array that has been brought by an operator of a wind farm that bought power cables directly form the cartel: see today's Judgment at para 38.)

[375uv] 02/5/2024 20:32

Things are getting interesting in Argentina.

[extrader] 02/5/2024 18:34

Seb continues his lobbying/consultancy :

..I have said more than once that respecting court times and waiting for a new ruling to be published is not a responsible legal strategy. History is not on our side.

Let's summarize what happened recently:

1. Request for transfer of ownership of YPF shares.
2. Request for recognition of the ruling in Ireland.
3. Request for information to prove that YPF and Argentina are "the same" and thus go after the oil company's assets.
4. The IMF warns the country that these trials may complicate the return to international credit markets.

I understand that the YPF issue is toxic for the Government, but kicking the ball is not an appropriate legal strategy.

I am not asking to pay at this time. Just pick up the phone before it gets even more complicated.

also posts newspaper headlines ( La Nacion) pointing the finger at Christina Kirchner.

Meanwhile - also la Nacion - Argentina's Central Bank has lowered interest rates .."In 50 days, the BRCA applied four rate cuts, from 100% p.a. to 80% last March, then from 80% to 70% 21 days ago, and from 70% to 60% last week..."; and

."Argentina today officially began the process of joining the Organisation for Economic Co-operation and Development (OECD), when Foreign Minister Diana Mondino received from the Secretary General, Mathias Cormann, the "road map" that the country must follow before becoming a full member of the organisation, which brings together the 38 most prosperous countries on the planet, which account for 75 per cent of investment and 60 per cent of global trade..."

[three black crows] 02/5/2024 17:05

TNT99,Now that is a question I have been pondering for some time.Let's see how Burford get to work negotiating this major claim. I would like to think that 2025 is our year to celebrate. I can't see this case being settled this year

[tnt99] 02/5/2024 13:58

When is burford shares going to be 30 pounds must be their true value If they get the Argi money or take over The oil company's assets

[futurekid] 01/5/2024 21:53

Kirchner & Co may soon decide gathering the cronies together and supporting a settle agreement is better than a public disgrace

FK

[three black crows] 01/5/2024 18:20

Yes full payment please

[extrader] 01/5/2024 12:51

And hat-tip to Rider75, continuing the 'aviation' theme

..In case of PDVSA, the fact, that the VZ government, then the oppositon politicians financed many official cost through the company, made it possible to the american judge to male the decision on this " alter ego " thing, then initiaze the auction of CITGO. (And this we experienced even 20 fold rise of one of the creditors, who sueffered an expropriation in the past. And instead of persuing a small fraction of their claim, there is chance to full payment ).

Kirchner's use of YPF jets - referenced in the submission - whether for personal or 'Government' business could prove to be their undoing.

GLA

[extrader] 01/5/2024 07:06

Seb tweets




(1) Bloomberg
@business
Javier Milei notches a congressional win after Argentina’s lower house approves the privatization of some public companies and other key chapters of his omnibus reform bill

.....

(2) Seb : YPF judgment creditors initiate discovery of the oil & gas company's assets. They request Judge Preska to order YPF to produce documents that will prove that Argentina and YPF are the same (Alter Ego) so they can start seeking and attaching assets.

[tnt99] 01/5/2024 06:49

Looks like we are going into the oil and gas business

[planit2] 30/4/2024 06:58

I am seeing more positive reporting and figures out of Argentina now.

It's a the press seem to need to take a stance on whether they will vilify or promote a politician rather than just report facts.

In any case the figures are looking in the right direction and the opposition has failed so far to stop the policies going through. I think they are past the most uncertain period as it will be increasingly difficult for Milei's critics to say things aren't working.

[extrader] 29/4/2024 19:18

Ashmore latest

Argentina
Economic Activity Index -3.2% yoy in February vs. -6.0% consensus and -4.0% prior.
Economic Activity Index -0.2% mom in February vs. -0.8% mom prior.
Budget Balance ARS 625.0bn in March vs. ARS 1232.5bn prior.
Consumer Confidence Index 37.2 in April vs. 36.7 prior.

GLA

[extrader] 28/4/2024 12:47

Seb's latest

It is important that Argentina pays attention to the lawsuits it has abroad. The pressure is already beginning to be felt. The IMF warned the country in February in a report that is public. Several beneficiaries have already initiated seizure processes and, in certain cases, have obtained approval to take possession of these assets. In June/July, we will know if Judge Loretta Preska authorizes the transfer of YPF shares to the beneficiaries of the ruling. Yesterday, an Irish court received a request to recognize the ruling in order to begin the search for assets.

I understand that President Milei has other priorities and I applaud that he is taking care of them. But Argentina has ignored these trials for a long time and they have always been complicated.

The beneficiaries of the YPF case are the country's second most important creditors after the IMF. I am not asking the Government to pay, just to start by putting these trials on the radar to fully understand their details and the consequences for all of us if we continue to ignore them.

The below-the-line comments are worth a read.

GLA and ATB

[lazg] 24/4/2024 01:26

Burford Capital seeks Argentina’s YPF stake to pay US$16-billion award
Burford Capital asks US judge to grant it controlling 51% stake in YPF as part of its effort to collect on a US$16-billion court judegment.



Burford Capital asked a US judge to give it control of Argentine state oil company YPF SA as part of its effort to collect on a US$16-billion court judgement against the Latin American country.


In a motion filed Monday in New York, Burford asked US District Judge Loretta Preska to grant it the 51 percent stake in YPF currently held by Argentina’s federal and provincial governments. Preska is also the judge who in September issued the judgement that Burford is now trying to collect.

Burford had sought to keep its filings secret, saying that news of its collection effort could impede efforts to resolve the issue. It would also attract attention in Argentina “because the motion calls into question the republic’s continued majority ownership and control over YPF,” Burford said in a court filing. Argentina opposed.

Preska declined to seal the filings. Neither Burford nor the Argentine government responded to emails seeking comment.


Even if Preska orders that Argentina’s YPF shares be handed to Burford, it’s unclear how the litigation funding firm would enforce that decision. Argentina has in the past fought foreign judgments, but those disputes have also harmed the country’s ability to raise overseas capital.

Burford is asking the judge to order Argentina to transfer its class D shares in YPF through a custodial account at Bank of New York Mellon. According to the filing, the shares are not covered by a US law that shields certain assets of foreign governments, and Argentina has used them to back debt securities sold to US investors.

But Burford acknowledged it has “a long road ahead” to collect the full judgement, “given Argentina’s many years of structuring its assets to avoid enforcement.” It said a court order requiring Argentina to hand over the shares could be the only way to force the nation to engage in negotiations over the judgement.


A 51 percent stake in YPF is currently worth about US$4 billion, roughly a quarter of the judgement.

The case in which Burford is seeking to collect stems from the Argentine government’s seizure of YPF in 2012. Preska found that re-nationalisation violated YPF by-laws requiring the company to make a tender offer to all shareholders.

Argentina is appealing the ruling but failed to post security for the judgment during the appeal. That led Preska to rule in January that the judgement — the biggest ever ordered by the federal court in Manhattan — was subject to immediate collection, before the appeal is decided.


Burford, which paid US$16.6 million to acquire the interests of two groups that held YPF shares at the time, stands to make some US$6.2 billion if the full judgement is paid.

The case is Argentine Republic v. Petersen Energia Inversora SAU, 23-7370, 2nd US Circuit Court of Appeals (Manhattan).

by Bob Van Voris & Jonathan Gilbert, Bloomberg

[this tea tastes of chicken] 23/4/2024 07:28

Thanks mighunter

[chester9] 22/4/2024 20:45

It's on Top News text on Bloomberg TV.