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