Burford Capital Share Discussion Threads

[galatea99] 09/12/2019 19:55

"Burford chief executive fears Argentine reprisals
Chris Bogart tells US court he fears for safety if $1bn case is moved to Buenos Aires"





"Burford Capital’s chief executive has told a US court that he could be threatened or imprisoned by the Argentine government if a $1bn court case were moved to Buenos Aires.

“I do not put it past the Argentine government to attempt to imprison me or otherwise menace me,” said Chris Bogart, who co-founded Burford, in a legal declaration to a US court late last week. “Neither I nor other members of the Burford team would be able to participate in proceedings there given concerns about our safety.”

The litigation financing company is pursuing the South American nation on behalf of Petersen Group, an investor that went bust when the government nationalised oil company YPF in 2012. Burford has valued its total stake in the case at $1bn.

A US court ruled in September 2018 that Burford’s case could go ahead in the US, but Argentina has challenged the decision on jurisdictional grounds.

Mr Bogart said he had warned his family and Burford employees of the risk of travelling to Argentina. He said: “Argentina will not hesitate to use tactics outside the four corners of this litigation in an effort to avoid responsibility for its actions [which] heightens my concern about personal safety.”

Burford initially invested $18.4m in Petersen’s claims against Argentina and has so far made $236m by selling parts of its stake to third parties. The Aim-listed company, which is the world’s largest litigation funder, is resisting Argentina’s jurisdictional challenge.

Mr Bogart admitted that sending the case to Argentina “would hobble and perhaps destroy it”.


Burford’s $1bn valuation in its Petersen stake was attacked by short-seller Muddy Waters this summer, which accused the financier of “pulling forward” returns while not accounting for accompanying obligations. Burford is still reeling from the Muddy Waters report, which alleged it had misled investors by overstating the value of the cases it was funding and criticised its accounts and management. The report slashed Burford’s share price almost in half.


Burford defended its accounting methods as “reliable and judicious” and has claimed to have found evidence that trading of its shares was illegally manipulated around the time of the report’s publication in August.

It has since disclosed the extent to which its performance hinges on the Petersen case. Burford said in September its return on invested capital spanning all of its investments stood at 98 per cent but acknowledged that this would fall to 59 per cent if its Petersen claim were stripped out. Burford’s internal rate of return would fall from 32 per cent to 24 per cent, it said.

Argentina’s Peronist party, which was in power at the time of the expropriation of YPF’s assets in 2012, returns to power on Tuesday amid fears among investors of a deterioration of relations with the private sector. A spokesperson for the incoming government did not comment."

[stockvalue] 09/12/2019 15:57

hxxps://www.ambito.com/economia/ypf/caso-ypf-burford-se-pinta-la-cara-contra-alberto-fernandez-n5070050

[maddox] 09/12/2019 14:42

trident5,

The Argentinian currency's value is irrelevant to Burford because the Petersen judgement will be made in US Dollars and that is what Argentina will have to pay to settle the claim in. There isn't any need to negotiate a settlement - that opportunity went a long time ago.

Regards Maddox

[ozzmosiz] 09/12/2019 12:36

Owned my the Chinese now....

[tradertrev] 09/12/2019 12:32

Is the FT biased against Burford? Well, do they carry advertising from large corporates, who don't like the litigation field levelled up? I have a feeling they do.

[mad foetus] 09/12/2019 07:05

The asset still exists. The court could always order restitution if Argentina won't pony up. They could even say that BUR is entitled to x% of the income flow to Vaca Muerte until the debt is repaid. There are lots of possibilities.

[onjohn] 09/12/2019 06:22

Muddy water saying bur zero ?

[trident5] 08/12/2019 18:28

"The weakness in Argentina’s currency is also irrelevant".

It's not though, is it?

If the matter gets resolved by settlement, then it's a negotiation which will be impacted by how much Argentina is willing to settle at, and that will be impacted by currency weakness.

[george stobbart] 06/12/2019 16:28

LABOUR WILL WIN.

COMANDANTE CORBYN WILL BRING BURFORD BACK TO THE PEOPLE WHERE IT BELONGS FOR 1P PER SHARE.

AND YOU DISGUSTING TORIES WILL OBEY THE NEW SUPREME LEADER.

YOU WILL LEARN TO CO-OPERATE UNDER SOCIALISM AND YOU WILL LOVE IT.

[time_traveller] 06/12/2019 15:09

Usual rabidly (and suspiciously) anti Burford editorial from FT. Anyway, who is this "betting person" who says that Argentina can ignore Burford? - A figment of the FTs imagination, it seems - what we do have is an institutional investor making a $100m bet to the contrary. It also ignores that debt recoveries from court rulings are very different from government issued debt, and cannot be conflated (edit, I see that was mentioned above - anyway my understanding is that tools available to Burford would have more teeth, and greater in scope, although chasing assets inside fortress Argentina may indeed be difficult, so a siege strategy should yield dividends over coming years, albeit diminishing ones)

[williamcooper104] 06/12/2019 14:08

One is a claim with no contractual date within which it will be settled The other is a claim with fixed contractual payment dates With a restructuring contractual debts now won't be paid on time and will probably best lower rates of interest - thus their value falls With a claim it doesn't necessarily make a difference - it all depends on where your starting point is for when you assume it will be settled Management have guided that they have assumed that this is quite some time away Of course I've not seen the calculations/detailed assumptions behind the marks so I can't say that they are robust but equally can't say that they are not

[stockvalue] 06/12/2019 12:19

@trident5 I agree, both parties are debt holder. But imo there is a huge difference between someone who can only sit at a round table and hope, and a debt holder who can enforce and seize everything belonging to the sovereign state in multiple jurisdictions. Of course its not gonna be easy either way.

[trident5] 06/12/2019 12:05

Stockvalue - they are a little different but they are both debts of the Argentine Government.

[stockvalue] 06/12/2019 11:36

IMO what the author of the article does not understand is that there is a huge difference between sovereign bond holders and Burford. Its pointless to look at the situation of bond holders and compare them to Burford.

[trident5] 06/12/2019 11:17

"No major investor in distressed sovereigns knows anyone, let alone institutional investors, who have bought or even systematically valued the Petersen claim".

What is he inferring with that?

How will they price Peterson at the next accounts given the fall in Argentine sovereign bonds - won't the former need to mirror the latter to some extent?

[wantage] 06/12/2019 10:58

Punchy - Petersen's their big one.It's the foundation.If their valuation and hence broker's is flawed, that calls into question valuation and share price of group itself.

[galatea99] 06/12/2019 10:24

No longer a holder here since August but this is an article from today's FT, posted without comment and without motive.


"The world of litigation finance and the world of distressed sovereign debt have been in parallel dimensions for a couple of years. In litigation finance world, Burford Capital’s “Petersen claim” against Argentina for the nationalisation of a bankrupt investor’s shares in YPF, the national oil company, is taken seriously.

Some non-Burford inhabitants of that world believe Petersen Group, the Spanish conglomerate that went bankrupt in 2012, is worth less than Burford seems to think, and that it should be carried on Burford’s books at its (low) cost, rather than Burford’s ambitious “fair value” marks. Others, such as Burford investors, believe Petersen is a gem that has dramatically increased in value over the past couple of years, and will only become more valuable over time.

Burford received the proceeds of the placement of 10 per cent of its Petersen claim with institutional investors in late June for a surprisingly round number of $100m, giving the claim an easy-to-remember valuation of $1bn. The announcement of the transaction came just after a legal procedural milestone before the US Supreme Court, and just before the end of its semi-annual reporting period. The precise terms of the deal, including, say, whether there were any non-cash components of the proceeds, were not disclosed.

In distressed sovereign debt world, in contrast, Burford and the Petersen claim are raised only to be dismissed. No major investor in distressed sovereigns knows anyone, let alone institutional investors, who have bought or even systematically valued the Petersen claim. As one major distressed sovereign investor says: “The Burford case is barely on the radar of the [Argentine] government, and only marginally of interest to the bondholders. There is no perception that it is an obstruction for the IMF.”

Benchmark Argentine sovereign bonds trade at about 40 cents on the dollar, and, in contrast to Burford’s valuation of the Petersen claim, have been sharply discounted this year.

The activist holders of Argentine sovereign debt, including the litigation-knowledgeable vulture funds, have been divided into scheming camps since the summer’s political crisis, which resulted in the Peronist victory in the national elections. They have contended over which investors should be leading which committees in negotiating with the Argentines and, sotto voce, the IMF.

They will have to get themselves in order very quickly. This weekend the government will announce the identity of the new minister of the economy, and, therefore, the lead negotiator with the IMF, other international institutions, bilateral official creditors and the private bondholders.

This should be the moment, then, for the parallel dimensions of sovereign debt and litigation finance to converge. The litigation finance people, including Burford, should take the occasion to mark down their expectations about what they can get out of Argentina. This will be a long, risky process, with the IMF, multilateral lenders, official creditors and bondholders eventually coming to an agreement with the Argentines over what constitutes a sustainable refinancing.

Burford and its fellow Petersen claimants are not invited to the table. Long and risky should mean a very conservative range of assumptions about what haircut would have to be taken in a settlement, and a high discount rate applied to the net value, compounded over years and years.

Then there are the lawyers’ bills, which can run to the tens of millions in cash outlays, especially if investigators fly around to find attachable assets. Those costs will also have to be subtracted from any notion of an award, as well as the compensation to Burford’s management and staff and their expenses. Time to get real, litigation people.

Until about two weeks ago, activist creditors had assumed the new minister of the economy would be Guillermo Nielsen, a veteran foreign debt negotiator on the more pragmatic wing of the Peronist movement. Mr Nielsen had been floating the idea that there could be quick deals with creditors, to have as little impact as possible on the chances for an economic recovery.

Part of the basis for this concept was the evanescent notion that development of the Vaca Muerta shale fields would be a magic commodity windfall. The Peronists also thought they might divide the IMF and the private creditors and get cheap new money in the confusion. Not likely.

Now it appears the Peronist government’s economy alpha will be Martin Guzmán, a Columbia University economist, who is close to Joseph Stiglitz, a leading critic of austerity programmes. He is an ally of the segment of the Peronist coalition that wants to take a harder line with the foreigners. Recently he has had serious discussions with some bondholders, but not with litigation financiers.

It is hard to enforce an arbitration award against a sovereign unless the sovereign owns attachable commercial assets outside the country. Argentina has spent the better part of two decades perfecting ways to avoid attachments.

Burford’s US Supreme Court “win” merely enables it to overcome Argentina’s counterclaim of sovereign immunity. There are holders of Argentine paper who passed that barrier almost 20 years ago, and who still have not got their money. A betting person would say the Argentines can ignore Burford’s claim."

[vstock] 05/12/2019 23:26

In case someone is interested in the debate Carlson Block vs. Joshua Mitts from Columbia Law School. Here you can watch the full debate, which took place at the 04/10/2019. hxxps://www.law.berkeley.edu/research/business/events/previous-events/fraud-in-the-bull-market-2/fraud-in-the-bull-market-videos/

[stockvalue] 05/12/2019 11:47

Joshua Mitts paper about the short and distort tactic also used by MW.
hxxps://papers.ssrn.com/sol3/papers.cfm?abstract_id=3198384

[ozzmosiz] 05/12/2019 10:01

Gonna go red at this rate!

[dekle] 05/12/2019 08:50

Dividend received today for ORD Shares

[stockvalue] 04/12/2019 23:08

@Devalpha Thank you Sir.

[devalpha] 04/12/2019 21:12

Seems Block and Joshua Mitts have history. My money's on Mitts if and when this goes to court for illegal price manipulation.https://nam10.safelinks.protection.outlook.com/?url=http%3A%2F%2Fcrm.marcumbp.com%2Fchina-accounting-insights%2Fgreat-short-selling-debate&data=02%7C01%7C%7C19b5fe61742b4dab856b08d778dbb43f%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637110757320698239&sdata=mQNgNyjVjHsgu6asKnc3eSiajgI7LJZkQqp%2F6Vuq%2FPg%3D&reserved=0