PDV Holding, CITGO Holding, and CITGO Petroleum secured a swift and unanimous victory in the Delaware Supreme Court in the matter of Jimenez v. Palacios. The boards of these three entities were reconstituted in 2019, after the United States formally recognized Interim President of Venezuela, Juan Guaidó, and the Venezuelan National Assembly appointed an Ad Hoc Board of Petróleos de Venezuela, S.A. (PDVSA), Venezuela’s state-owned oil company, which was empowered to manage its U.S.-based subsidiaries.
Following the reconstitution of these boards, a slate of former directors appointed by former President Maduro sued in the Delaware Chancery Court seeking a judgment that they were the rightful boards of PDV Holding, CITGO Holding, and CITGO Petroleum. On August 12, 2019, the Chancery Court summarily denied the Maduro directors’ claims and ruled that under the political question doctrine and act of state doctrine, U.S. courts must accept as binding the U.S. President’s recognition of the Guaidó government and assume the validity of the Guaidó government’s appointments to the PDVSA Board (and the Board’s subsequent replacement of the boards of PDV Holding, CITGO Holding, and CITGO). Today, the Delaware Supreme Court issued a unanimous Order summarily affirming the Delaware Chancery Court’s August 2019 opinion.