A New PDVSA? The Transfer of Venezuela’s Oil Assets to a Successor Entity and Fraudulent Conveyance

38 Pages Posted: 21 Mar 2019 Last revised: 28 Apr 2019

Date Written: March 8, 2019

Abstract

This Working Paper analysis the hypothetical transfer and conveyance of Petróleos de Venezuela, S.A.’s assets to a new state-owned entity by the Venezuelan Government, and the possible creditor responses to such action, on account of the Venezuela’s NOC current financial-distress situation. The study is conducted from the perspective of Venezuelan law, which might provide certain legal remedies under Civil, Commercial and Administrative law—although with somehow little practical success expectations, given other factors and externalities—as well as from the perspective of U.S. law, which is of particular relevance, given (i) significant asset exposure in the U.S., where PDVSA—through CITGO—maintains an important operation, (ii) the contractual terms in the bulk of Venezuela and PDVSA’s financial indebtedness relies on U.S. law and provides for submission to the jurisdiction of NY courts, and (iii) many creditors are actually U.S. persons. Thus, this Working Paper examines the above situation, given the multiple issues and complexities on the case, starting from the very nature of PDVSA as an state-owned entity under Venezuelan law, but with particular emphasis on the creditors’ side of the equation and the theory of fraudulent transfer, which is analyzed both from the standpoint of Venezuelan law, as well as from U.S. insolvency framework and international law in general.

Keywords: PDVSA, Petroleo de Venezuela S.A.

JEL Classification: K49

Suggested Citation

Levin, Richard and Pettersson, Roland, A New PDVSA? The Transfer of Venezuela’s Oil Assets to a Successor Entity and Fraudulent Conveyance (March 8, 2019). Available at SSRN: https://ssrn.com/abstract=3349158 or http://dx.doi.org/10.2139/ssrn.3349158

Richard Levin

Jenner & Block LLP ( email )

919 Third Ave.
New York, NY 10022
United States
+1 (212) 891-1601 (Phone)

HOME PAGE: http://https://jenner.com/people/RichardLevin

Roland Pettersson (Contact Author)

D'Empaire ( email )

Edificio Bancaracas PH
Plaza La Castellana
Caracas, Miranda 1060
Venezuela

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