The nationalization of Aerolíneas Argentinas, carried out by the government of Cristina Kirchner in 2008, will cost the country nearly $400 million after the United States judiciary upheld a ruling that compels Argentina to settle this debt without the possibility of appeal.
This ruling comes from a court in the District of Columbia, which ordered Argentina to pay $390.9 million due to the manner in which the expropriation of the flag carrier was carried out.
The beneficiary of the ruling is the fund Titan Consortium, which holds the lawsuit for the expropriation of Aerolíneas. In October, the fund requested that the country be ordered to pay the judgment issued by CIADI (the arbitration tribunal of the World Bank), which remains unpaid.
«Look at the cost of the genius ideas of statists. And yet, today, the governor of Buenos Aires continues to insist on this path. Honestly, we should implement @JMilei’s idea: create the Kicillof tax so that those who adore ridiculous ideas that cost the country fortunes pay for it,” said the National Secretary of Transportation through their account on the social network X.
Long history
The current creditor of the debt acquired the case from Burford Capital on March 15, 2018. Burford had, in turn, purchased the lawsuit from the Spanish court handling the case related to the bankruptcy of the Spanish group Marsans for about $17 million in 2015. This was followed by the lawsuit against Argentina over the 2008 renationalization.
Titan argues that Argentina has not complied with the CIADI’s ruling, which is unappealable. Thus, this court order is final.
In mid-November, the country’s attorneys and the plaintiffs reached an agreement «on the terms and conditions of the judgment in the Aerolíneas expropriation case.»
The agreement allowed the United States judiciary to issue what is called a final judgment without a trial. If the convicted party fails to comply, processes for asset seizures would begin directly to cover the total amount of the judgment.
Although Argentina initially rejected the arguments presented by Titan Consortium in the case, this was not effective, and a U.S. court determined that the judgment must be enforced.
Pay or seizure
Argentina must now, without exception, fulfill this obligation. Otherwise, the creditor will be in a position to initiate the pertinent seizures to recover the full debt amount.
The renationalization of Aerolíneas Argentinas was formalized by the Cristina Kirchner government on December 17, 2008, after the Chamber of Deputies passed into law the then-president’s request to proceed with this operation under the framework of being companies «of national public interest.»
At that time, the law included Aerolíneas Argentinas, Austral Líneas Aéreas, Jet Pack, Optar, and Aerohanding.
Not a single dollar
Argentina did not pay a single dollar for the renationalization of Aerolíneas Argentinas, which was noted by the vulture fund Burford. Burford purchased from Díaz Ferrán, head of Marsans, the rights to sue Aerolíneas at CIADI due to the way the company’s nationalization was carried out.
Eventually, Burford sold the package to Titan Consortium, which kept the lawsuit against Aerolíneas alive. The case now has a final ruling from the United States judiciary.
