Delaware, 13th December 2019 – Judge Leonard Stark ordered a stay on cases against Venezuela affecting Crystallex, ConocoPhillips, Saint-Gobain, and OI Europe until the conclusion of proceedings in the Supreme Court regarding Crystallex and without prejudice to Crystallex’s opportunity to file a motion to lift the stay.
The court indicated that the case is a matter of public interest as it involves the foreign policy position of the United States, determined by the Executive Branch. This argument “strongly supports” a stay, according to the court.
Additionally, the Court also considered that the case should be halt given Crystallex’s lack of license from the Office of Foreign Asset Control (“OFAC”) and its failure to this point even to seek one. Another element considered was the uncertainty surrounding the attached assets (PDVH) where potential buyers cannot know with any confidence that a purchase of transfer of shares can be consumed. The OFAC sanctions and guidance were also a matter of worry to the Court. And finally, it was also considered the corporate governance changes in PDVSA, PDVH, and CITGO, and possible consequent changes in the relationship of PDVSA to the Republic. The Court’s concern is not to create an influx of creditors to the Court or “run on the bank” with negative consequences for Venezuelan and U.S. policy toward the country.
The decision does not intend to permit Venezuela to avoid its obligations that were once confirmed by U.S. Courts, and Venezuela recognises that it must pay what it owes. Counsel for the Republic has expressed that Guaido government intends to engage in a voluntary restructuring of all its debts. In consequence, the Court decision is an attempt to balance the many competing interests in an “internationally sensitive set of circumstances.”