Preska orders the delivery of 51% of YPF: the cost of Kicillof and CFK's delusion

Judge Loretta Preska of the Southern District Court of New York  ordered Argentina to hand over 51% of the shares of YPF as part of the payment for the expropriation lawsuit initiated after the nationalization of the oil company in 2012. The ruling, which can still be appealed, is part of the judgment that already weighs on the national government for more than USD 16 billion.

The judicial decision represents a new chapter in the international scandal caused by the irresponsibility with which Axel Kicillof and Cristina Fernández de Kirchner carried out the nationalization of the country's main energy company. At the time, the then Minister of Economy, with the endorsement of the former president, proceeded with the confiscation of Repsol's shares without complying with the established legal or contractual mechanisms. That improvisation and disregard for international law today cost Argentina billions of dollars.

The direct consequence of a political decision

The ruling released by Sebastián Maril, CEO of Latin Advisors, through his X account, states that Judge Preska ruled that the country must hand over the expropriated shares as a form of compensation to the funds Burford Capital and Eton Park, who purchased the litigation rights of Petersen Energía and Petersen Inversora, the Eskenazi Group companies that were harmed by the arbitrary nationalization.

This new judicial setback adds to the September 2023 ruling, when the same judge had already ordered the Argentine government to pay more than USD 16 billion for the unconsulted expropriation. Now, in addition to the economic damage, the country could lose control of its energy company by decision of a foreign court, a scenario that could have been avoided with a responsible legal strategy.

A heavy legacy

The irresponsibility with which the nationalization of YPF was handled in 2012 continues to have dramatic consequences. Instead of protecting national interests,  Kirchnerism opted for a political move without planning or guarantees. Kicillof, in a memorable speech in Congress, justified the measure by stating that it did not matter how much it would cost. Today, the cost is extremely high, and all of Argentina is paying for it.

Key points of the YPF case:

1. The nationalization was carried out without launching a public takeover bid (OPA), as required by law.
2. The process was designed by Kicillof and endorsed by Cristina Kirchner, without consulting Congress or international legal advisors.
3. The lawsuit was initiated in 2015 by the funds that purchased the litigation rights of the harmed shareholders.
4. Argentina has already been ordered to pay USD 16 billion and could now lose control of YPF's shares.

Preska's decision is a forceful reminder that improvised political decisions, tinged with ideology and arrogance,  end up with serious judicial and economic consequences. The nationalization of YPF was a foolish move by Kicillof and Cristina Kirchner, and  today Argentinians are paying the price.