Venezuela Creditor Committee Files Summons With Notice and Stipulation of Dismissal

Cleary Gottlieb represented a diverse group of 23 institutions, who collectively hold over $11 billion face value of bonds issued by the Republic of Venezuela and Petróleos de Venezuela S.A. (PDVSA), in a set of negotiated filings with representatives for Venezuela and PDVSA appointed by the 2015 National Assembly of the Bolivarian Republic of Venezuela (National Assembly).

These filings seek to ensure the enforceability of the announcement made by the National Assembly earlier this year, tolling the statute of limitations and prescription periods applicable to the bonds and related enforcement actions until December 31, 2028.

On October 11, 2023, the bondholders represented by Cleary initiated proceedings against each of Venezuela and PDVSA, asserting claims for payments under the bonds that have been missed since October 2017. The proceedings against PDVSA were joined by the trustees for all listed PDVSA bonds, who were represented by separate counsel. Shortly thereafter, the creditors and trustees, joined by the Republic and PDVSA, filed Stipulations and Proposed Orders of Discontinuance Without Prejudice in each action. These orders of discontinuance will, once signed by a judge, terminate the proceedings without prejudice to reinstating the creditors’ claims on or before December 31, 2028.

These negotiated filings with the Republic and PDVSA helped the parties to achieve their respective goals, allowing bondholders to continue to preserve their claims with the ultimate goal of ensuring the future orderly and equitable debt restructuring of the bonds.  For the Republic and PDVSA, these filings represent a cooperative solution designed to avoid extensive and costly litigation on the bonds, which may have otherwise become necessary due to applicable statute of limitations periods. In addition to benefitting the parties to the stipulation, these negotiated filings provide additional reassurance to bondholders everywhere that their claims will remain preserved through 2028. And, importantly, this solution benefits the people of Venezuela by promoting continued cooperation between bondholders and the National Assembly.