Burford Capital Limited disclosed a press release regarding the United States Court of Appeals for the Second Circuit's opinion in the YPF matter, which reversed a lower court judgment. The company expects a non-cash write-down related to this decision, which could impact its balance sheet equity and ability to incur additional debt.
Key takeaways
The United States Court of Appeals for the Second Circuit issued an opinion in the YPF matter on March 27, 2026, reversing the District Court's entry of judgment in favor of Petersen and Eton Park.
Burford expects a partial non-cash write-down of the YPF asset following the appellate loss, with details to be included in first quarter reporting normally released in early May.
A material write-down could reduce Burford's balance sheet equity below the level required under senior note indentures to incur additional debt based on debt to equity ratio, limiting new debt issuance.
Burford's ability to make restricted payments or permitted investments based on debt to equity ratio could also be limited by a decline in balance sheet equity.
Plaintiffs are expected to seek rehearing en banc by the entire Second Circuit within 14 days, and may consider investment treaty arbitration against Argentina as an alternative path.
Burford's valuation policy calls for a partial write-down of assets following an intermediate appellate loss, and the company has not yet determined the magnitude of the write-down.