2020 PDVSA Bonds – Expect The Unexpected

First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement.

When we last discussed the potential sale of the stock of Citgo in Crystallex International Corporation v. Bolivarian Republic of Venezuela, No. 17-mc-151, D. Del. (Crystallex), we noted that briefing was ongoing in a New York Court of Appeals case to determine the validity of the 2020 PDVSA bonds and the lien on a majority of shares in Citgo. [See here]. On February 20, 2024, the New York Court of Appeals issued its opinion, holding that Venezuelan law governs validity but New York law governs the consequence of any invalidity. Bondholders are now asking if the 2020 bonds are valid under Venezuelan law (possibly) and if they are invalid, what are the consequences under New York law? The uncertainty surrounding the 2020 bondholders' lien will likely impact the bids in the Citgo sale—as the bidders will be uncertain if they need