Burford Capital Limited (NYSE: BUR) said it expects a substantial write-down of its YPF asset following an adverse appellate court decision, but maintained that the setback will not affect its core business operations or growth plans.

The United States Court of Appeals for the Second Circuit ruled against plaintiffs in the YPF matter on Friday. Chief Executive Officer Christopher Bogart said the company remains optimistic about an eventual positive outcome through international arbitration, though this represents a meaningful delay in expected cash proceeds.

Burford said it anticipates plaintiffs will seek rehearing en banc from the Second Circuit, though the court rarely grants such requests. If unsuccessful, plaintiffs are expected to seek certiorari from the Supreme Court.

The company plans to pursue arbitration under bilateral investment treaties between Argentina and Spain, and Argentina and the United States. Such claims would likely be brought before the International Centre for Settlement of Investment Disputes, though the process would take multiple years.

Burford expects to write down the YPF asset substantially following the appellate loss, with the revised carrying value to be disclosed when first quarter results are released in the first half of May.

The company said it maintains more than $700 million in cash, cash equivalents and marketable securities. Bogart noted that YPF has not provided cash to Burford since 2019 and the company has operated without relying on cash from this case.

Burford's core portfolio produced more than $1.2 billion in cash over the past two years from hundreds of cases, with expected total proceeds exceeding $5 billion over time. The company said it remains committed to doubling its core portfolio by 2030 without additional borrowing.

The company's outstanding debt consists of unsecured bonds issued in the U.S. 144A market without financial maintenance covenants, though a substantial YPF write-down could limit the use of certain exceptions under incurrence covenants.