The legal representation of the Republic, has presented – this June 17th – three new arguments before the Delaware Court through which the Legitimate Government of Venezuela opposes any possibility that Crystallex International may execute the embargo of the shares of PDV Holding Inc. (PDVH), which is solely owned by CITGO Petroleum Corporation (CITGO). With this action, we are moving forward to defend and preserve CITGO – our main asset abroad – from the risk it faces as a result of the irresponsible expropriation and debt policies of Hugo Chávez and Nicolás Maduro.
After Hugo Chávez expropriated the Las Cristinas gold mine in 2011, and with it the contractual rights of Crystallex, the company decided to sue the Republic in 2016, before the ICSID of the World Bank, winning an award to the amount of nearly 1.2 billion dollars, and after that in 2017, before a court of the State of Delaware in the United States. Nicolás Maduro’s irresponsibility in not defending Venezuela’s assets before international courts put the ownership of our assets in the United States in imminent danger.
In August 2018, Crystallex succeeded in obtaining a preliminary lien on CITGO in the Delaware Court. Although there were means of defense, Maduro’s regime rushed to sign a fraudulent transaction, acknowledging Crystallex’s claim and paying over $400 million, without control of the National Assembly.
Additionally, after the first Delaware Court ruling in 2018, Nicolas Maduro, acting again against the interests of the Venezuelan people and behind the backs of the legitimate National Assembly, submitted a confidential document proposing to sell CITGO as a form of payment of a debt they had irresponsibly acquired.
It is essential to emphasize that when the Legitimate Government was formally recognized, it recovered and took control of the subsidiaries of Petróleos de Venezuela, S.A. (PDVSA) in the United States, as well as the leadership in the legal battle for its defense. The decision of the Delaware Court was immediately appealed and, from that moment on, all efforts of the Legitimate Government have been focused on advancing all legal actions to try to save the assets that the dictatorship so irresponsibly compromised.
Our arguments presented before the Delaware Court are clear and precise:
1. Today, Venezuela is represented by the legitimate government led by President (E) Juan Guaidó, which respects and defends the independence that exists between the Republic and State enterprises. Therefore, a debt of the Republic cannot be collected with a legal company that is different and autonomous as PDVH.
2. We are presenting the validity of the protection issued by the Office of Asset Control (OFAC) of the U.S. Department of the Treasury, prohibiting any creditor from seizing PDVSA assets, thus ratifying the protection of PDVH and therefore of CITGO. Protection that was achieved thanks to the actions of the Legitimate Government in our eagerness to exhaust all resources to preserve the Nation’s assets.
3. A motion is being filed with the District Court of Delaware, before the already mentioned Judge Stark, which allows the lawyers representing the Republic in the trial, to request the non execution of the sentence.
In this regard, as the Legitimate Government, we wish to responsibly ratify that in the event that the Delaware District Court Judge does not accept the arguments we have presented, even CITGO would be protected because any lien and/or potential judicial sale that is sought against a Venezuelan asset in the United States requires – necessarily – the issuance of an OFAC license.
In addition to these arguments, it has been stated to the Delaware Court Judge that if these arguments were not sufficient to mitigate the legal disaster left by Maduro as a legacy, and there is no other option than to file an hypothetical sale of PDVH shares, The laws of the State of Delaware must be respected and complied with at all times. These laws require that the process be conducted by the debtor, that the value of the asset be maximized and that only a portion of this value can be liquidated to offset the debt, thus ensuring that this asset remains in the hands of the Venezuelan nation. Something that Maduro never considered when it irresponsibly failed to participate in the trial and when it was willing to use CITGO as a form of payment of its debt.
We, the Legitimate Government want to ratify to the people of Venezuela our commitment to the defense of CITGO. With our team of lawyers and with the support of our international allies we will continue to seek ways and actions that will allow us to protect this asset for the people of Venezuela. An asset that today would not belong to the Venezuelan people if the regime continued to control CITGO and its defense were in their hands. We are facing an extremely complex situation in which CITGO was pawned by the regime and then allowed the litigation to advance to the point where we are today, but let all the people of Venezuela know that we will not rest in our efforts to seek strategies, actions and initiatives that will allow CITGO and all the assets of the people to continue to belong to the Venezuelan nation so that together we can overcome the humanitarian crisis and restore democracy in our country.