Swift de la Plata v. Argentina National State

[Ed.’s note: Prior to presentation of this case, the casebook discusses the politically charged preceding litigation from the 1970s involving the company Swift de Plata and the associated company Deltec, a Canadian company. In the prior cases, the court extended the bankruptcy liabilities of Swift to its associated company, Deltec.] Swift de Plata (Swift) (plaintiff) and its foreign parent company, Deltec (plaintiff), operated a meat-processing enterprise in Argentina up through the late 1960s. During that time, Swift began to have financial difficulties. Due to a lack of profits and increased hostility toward foreign companies operating in Argentina, Deltec decided to sell Swift. To render Swift more marketable, Deltec sought a bankruptcy reorganization of Swift in 1970. The court denied reorganization upon finding that Swift was insolvent, and it ordered liquidation of the company. That same day, the Argentina National State (defendant) intervened and took over the operations of Swift from 1971 to 1977 to preserve the public interest and guarantee social peace. The government based its intervention on the bankruptcy’s effect on meat exports and jobs in the industry. During the intervention, government administrators regularly filed reports on operations to the bankruptcy court. Swift and Deltec filed suit against the Argentine government, alleging that the government’s intervention and management of Swift for those years delayed the bankruptcy proceedings, including the liquidation of assets and cancellation of liabilities, and that the delay, as well as the government’s administration of meat-packing operations, damaged Swift and Deltec. The trial court made findings in favor of Swift and Deltec, but the appellate court reversed. Swift and Deltec appealed to the Argentina Supreme Court.