Argentina files emergency appeal in US to put YPF stake turnover on hold

By Jonathan Stempel and Eliana Raszewski

BUENOS AIRES/NEW YORK, July 10 (Reuters) - Argentina on Thursday filed an emergency appeal of a U.S. judge's order that it turn over its 51% stake in oil and gas company YPF YPFDm.BA to partially satisfy a $16.1 billion court judgment.

Saying "the stakes could not be higher," Argentina told the 2nd U.S. Circuit Court of Appeals in Manhattan that requiring a turnover by Monday would irreparably harm its sovereignty, destabilize its economy and cause the irrevocable loss of a controlling stake in the country's largest energy company.

Argentine President Javier Milei has been seeking to bolster foreign currency reserves and rein in soaring inflation, while navigating a heavy debt burden.

The country asked that the YPF turnover be put on hold while it appeals.

The case centers on Argentina's 2012 seizure of the 51% YPF stake from Spain's Repsol REP.MC without making a tender offer to minority shareholders Petersen Energia Inversora and Eton Park Capital Management.

In September 2023, U.S. District Judge Loretta Preska in Manhattan ordered Argentina to pay $14.39 billion to Petersen and $1.71 billion to Eton Park.

Argentina hasn't, and has been appealing that decision. On June 30, Preska ordered Argentina to turn over the YPF stake within 14 days.

The plaintiffs are represented by litigation funder Burford Capital BURF.L, which has said it expected to receive 35% and 73% of Petersen's and Eton Park's respective damages.

In Thursday's appeal, Argentina also said a YPF turnover would violate international law and comity, and mark a "sea change" in how U.S. courts interact with the rest of the world.

"To flip the script, this order is akin to a foreign trial court directing the U.S. government to pack up the gold stored at Fort Knox and ship it abroad based on that court's erroneous interpretation of U.S. law," Argentina said.

Argentina asked the appeals court to decide its motion by 10 a.m. EDT on Monday, so it could appeal to the U.S. Supreme Court if necessary.

On Thursday evening, Preska said she will decide by Monday whether to put the turnover on hold, and give both sides another three days to appeal.

A spokesman for Argentina declined to comment.