(Bloomberg) — Investors seeking to collect a $16.1 billion court judgment from Argentina over its 2012 takeover of oil company YPF SA can start going after its assets, as a US judge ruled against the nation’s bid to push back those collection efforts.

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The ruling, in favor of litigation funder Burford Capital, is a blow to Argentina as it appeals US District Judge Loretta Preska’s September judgment — the biggest ever ordered by the federal court in Manhattan. The South American nation, beset by economic distress including surging inflation, says the judgment equals almost one-fifth of its 2023 budget and that paying it would cause severe hardship.

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Argentina has used legal requests of the court and a transition in presidential administrations as an excuse “to dodge its obligations on the final judgment,” Preska wrote in her ruling.

“There is no evidence of any attempt to pay the final judgment,” she said.

Rich Rewards

Burford, which is pursuing claims for former YPF shareholders, stands to reap $6.2 billion of the judgment, which would give it a more than 37,000% return on its initial investment. That would be by far the most successful outcome yet in litigation funding, the often controversial $13.5 billion business of investing in lawsuits.

Read More: Burford Eyes 37,000% Return in $16 Billion Argentina Award 

The ruling came after Argentina missed a Jan. 10 deadline to pledge assets — an equity interest in YPF and proceeds from a hydroelectric dam project. The pledge would have allowed it to appeal the judgment without having to post a bond securing the full amount. 

Burford didn’t immediately return an email seeking comment on the ruling. A spokeswoman for Argentina’s Economy Ministry didn’t return a phone message.

Tough to Collect

Actually collecting the judgment may not be easy. US law limits the type of sovereign property that can be used to satisfy a judgment, often prompting creditors to scour the globe for overseas assets that can be seized. In one vivid incident, Paul Singer’s Elliott Management briefly seized an Argentine naval training vessel docked in the African nation of Ghana during the investment firm’s 15 years of litigating over Argentina’s 2001 sovereign debt default.

A lawyer for Burford had said in a letter to Preska that it was “not on the cusp” of seizing Argentina’s overseas assets. Burford Chief Executive Officer Christopher Bogart said in September that he was “not sure that seizing ships is the best strategy.” 

When Argentina took 51% of YPF in 2012, it violated a bylaw that it must make a tender offer to all shareholders. Preska ruled in September that two companies that held stakes at the time and didn’t receive offers — Petersen Energia and Eton Park, which later filed suit — should be paid $16.1 billion.

In her ruling on Thursday, Preska agreed with Burford’s position that a reasonable amount of time had passed since the judgment, rejecting Argentina’s argument that the investors shouldn’t be allowed to start going after assets yet. 

The case is Petersen Energia Inversora SAU v. Argentine Republic, 15-cv-02739, US District Court, Southern District of New York (Manhattan).

–With assistance from Emily Siegel.

(Adds excerpts of ruling in first section, details of Burford’s potential gain in second and rigors of collection in third.)

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