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Once upon a time I was asked to look into Armando Luis Betancor Alamo's international affairs. Reason being, he was designated as administrator ("administrador concursal") in bankrupcy proceedings related to Petersen Energía Inversora, S.A.U. Petersen is part of a claim against Argentina, caused by expropriation of a 25% stake in YPF. The saga can get a bit complicated, though in short, Petersen borrowed funds to purchase said stake, and when Cristina Kirchner's government decided to expropriate YPF, Petersen, as minority shareholder and an Argentinian concern, was the last consideration. Burford Capital acquired from Petersen rights to 70% of potential claims against YPF for €15,101,000. In exchange, Burford would provide litigation funding. The changing value of Petersen's claim, however, seems entirely subjective although it underpins much of Burford's very own value.
Thus far Burford has sold: 10% of claim for $40 million in December 2016 (implied value $400 million); 15% of claim for $66 million in June 2017 (implied value $440 million); 3.75% of claim for $30 million in July 2018 (implied value $800 million); 10% of claim for $100 million in June 2019 (implied value $1 billion).
If Argentina's historical willingness to pay foreign investors is the mark by which Burford's chances should be appraised, it may be decades -if ever- before Petersen's claims produce actual returns. Therefore, it remains quite the mystery how the Petersen claim has gone from a €21.5 million implied value at acquisition, to more recent values. The good folks at Muddy Waters have tried to solve this riddle, though a simple explanation might just be marital: Burford's CFO was the CEO's wife.
Burford isn't everything it purports to be. Its recent involvement in a sex tape scandal, whereby its "star cyber sleuth" Daniel Hall was caught using -and sharing with top management- unlawfully obtained pornographic material, has exposed the firm's dodgy nature. Add to that Christopher Bogart's behaviour. If any doubt as to Bogart's unsuitability for the role remained after appointing the Mrs to cook sign the books, his dragging own daughter to the joust with Argentina cleared it.
Bogart is, basically, claiming that Argentina's new administration might deal with him, and / or members of his family / firm perhaps like they did with Alberto Nisman. What effing nonsense. Cristina Kirchner had Nisman killed for his exposing her role in covering the Iranian perpetrators of AMIA bombing. Neither Burford, nor Bogart, represent any danger whatsoever to the new Peronist government of Alberto Fernandez. Bogart's claim that Argentina might not "hesitate to use tactics outside the four corners of this litigation" can only be described as ramblings of a deranged man, considering tactics of Burford's head of "global corporate intelligence, asset tracing and enforcement business".
Bogart is, of course, desperately trying to keep Petersen's case against YPF within U.S. courts' jurisdiction. It might have asked a family member to front recent purchase, in order to keep Petersen's claim value inflated. Otherwise it'd be worthless. MuddyWaters concurs:
We asked $BUR.LN yesterday whether any of the funds it manages was a buyer of its Petersen stake. We had heard (unconfirmed) color that this is the case. IF this is accurate, it throws Petersen proceeds into question. Email attached. No response so far. pic.twitter.com/vpUwpDEnwp
— MuddyWatersResearch (@muddywatersre) December 10, 2019
