Aerolineas Argentinas has long been a terrible airline, and Argentina was foolish for nationalizing such a terrible asset.
Prosecutors in Argentina brought a local criminal complaint of fraud on Monday against a U.S. litigation fund group and a Spanish company that managed the South American country’s flagship airlines.
The office of the prosecutor for economic crimes and money laundering targets Burford Capital Ltd. and Spain’s Grupo Marsans, which managed Aerolineas Argentinas until its expropriation in 2008.
Agency head Carlos Gonella said at a news conference that Marsans transferred its rights to sue to Burford, which finances commercial litigation in exchange for part of settlements. Gonella said that was done fraudulently and that it lost effect when Marsans went bankrupt in 2010. He said the move could open Argentina both to a $1.6 billion demand but also to claims of legitimate rights holders.
“Public instruments have been falsified in the case before the International Center for Settlement of Investment Disputes to harm the Argentine state,” he said. “If that tribunal rules against our country, Argentina risks not only being forced to pay $1.6 billion to the vulture fund that is handling the case, but also to the legitimate Spanish creditors.”
Burford said in a statement that “Argentina’s allegations are baseless and part of its campaign to avoid being called to account for its expropriation of valuable assets contrary to international law.” The fund said that its involvement had “the express approval of the appropriate Spanish court.”
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Photo credit: One of Aerolineas Argentinas' poorly equipped planes. Aero Icarus / Flickr