CRYS­TALLEX VIC­TORY: PD­VSA NOT SEP­A­RATE FROM VENEZUE­LAN GOV­ERN­MENT, COURT SAYS

The Globe and Mail (Alberta Edition) - - REPORT ON BUSINESS -

CARACAS, VENEZUELA Crys­tallex In­ter­na­tional Corp.’s vic­tory in a le­gal bat­tle with Venezuela, that paves the way for it to col­lect a US$1.4-bil­lion award, hinged on a find­ing that state oil com­pany Petroleos de Venezuela S.A. (PD­VSA) is not sep­a­rate from the Venezue­lan gov­ern­ment, court doc­u­ments showed on Fri­day. The U.S. District Court for the District of Delaware granted Crys­tallex’s re­quest to take own­er­ship of shares in PD­VSA sub­sidiary PDVH, which owns U.S.-based re­finer Citgo Pe­tro­leum Corp., as part of a decade-long dis­pute over the 2008 na­tion­al­iza­tion of Crys­tallex as­sets. “Crys­tallex has met its bur­den to re­but the pre­sump­tion of sep­a­rate­ness be­tween PD­VSA and Venezuela and proven that PD­VSA is the al­ter ego of Venezuela,” wrote Judge Leonard P. Stark in the de­ci­sion. The is­sue has been closely watched by in­vestors hold­ing bil­lions of dol­lars in Venezue­lan bonds, which are al­most all in de­fault as the Or­ga­ni­za­tion of the Pe­tro­leum Ex­port­ing Coun­tries coun­try strug­gles un­der the col­lapse of its so­cial­ist econ­omy. Le­gal ex­perts had gen­er­ally be­lieved that cred­i­tors of Venezuela, which has few for­eign as­sets avail­able to be seized, would have a dif­fi­cult time pur­su­ing claims against PD­VSA be­cause the two were con­sid­ered sep­a­rate. Judge Stark said the court had not yet de­ter­mined when it would is­sue a writ al­low­ing Crys­tallex to as­sume own­er­ship of the shares of PDV Hold­ing Inc.

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