King & Spalding Wins $16 Billion Ruling in Major Suit Against Republic of Argentina

Sept. 8, 2023 – On September 8, 2023, Judge Loretta Preska of the U.S. District Court for the Southern District of New York issued Findings of Fact and Conclusions of Law that will result in a damages award in excess of $16 billion for King & Spalding clients Petersen Energia and Eton Park Capital Management in a long-running breach of contract litigation against the Republic of Argentina. The award is the largest ever issued by the U.S. District Court for the Southern District of New York, and the largest issued against a sovereign in the United States. It follows the Court’s summary judgment ruling on March 31, 2023, in which Judge Preska granted summary judgment in favor of Petersen and Eton Park on their breach of contract claims against Argentina. In complaints filed in 2015 and 2016, respectively, Petersen and Eton Park alleged Argentina violated contractual commitments it made to shareholders in connection with the initial public offering the government conducted in 1993 in connection with the privatization of YPF, the then state-owned oil company, which required Argentina to conduct a tender offer if it ever again acquired a controlling interest in YPF shares.

In May 2012, the Republic expropriated 51% of YPF’s shares from the company’s then-largest shareholder, Repsol YPF S.A., but did not launch the contractually-required tender offer for the remaining shares, including those held by Petersen Energia and Eton Park. Judge Preska ruled on summary judgment that Argentina breached its obligation to conduct the tender offer, and was therefore liable to Petersen Energia and Eton Park for compensatory damages, including prejudgment interest. After a subsequent bench trial, Judge Preska determined that Argentina owes Petersen and Eton Park damages, including interest, in excess of $16 billion. Petersen and Eton Park were represented by King & Spalding partners Reggie Smith, Roberto Aguirre Luzi, Laura Harris, Israel Dahan, and Chelsea Corey, senior associate Leah Aaronson, and associate Marcio Vasconcellos.