As they portray themselves
Yesterday was a really good day for the team at Derwick Associates.
Last week, a collection of three companies, two from Panama and one from Barbados, announced that they had acquired slightly over 10% of Pacific Rubiales Corp. The companies based in Panama were well-concealed, while the Barbadian one was more noticeable. Alek Boyd tweeted on April 28 about getting the documents for the Barbados company. He claims that it belongs to Alejandro Betancourt, the chairman of Derwick Associates. This news caught everyone off-guard, especially since I’ve closely followed each of these companies and the last reports indicated that a top executive at Pacific Rubiales was unaware of the individuals from Derwick.
Yesterday, Anatoly Kurmanaev from Bloomberg reached out to Orlando Alvarado. Alvarado disclosed that he and some unnamed Venezuelan investors were behind the acquisition. He mentioned they were interested in increasing their stake. While the Bloomberg article didn’t directly connect the dots to Derwick, Alvarado shares a name with a member of the board at Derwick Associates.
These new shareholders entered the market with approximately US$100 million worth of Pacific Rubiales shares. Their subtle message to the market sparked buying activity, leading to almost a 10% increase in share price, resulting in paper profits nearing $10 million in one single day.
Meanwhile, a major ruling came through in the case Otto Reich initiated against Betancourt, Pedro Trebbau, and Francisco D’Agostino in the US District Court of New York. (Note that I’m not a lawyer; this is merely my interpretation without legal advice, and I have made mistakes before. So, take this article with a grain of salt.) The court had earlier dismissed racketeering and civil conspiracy claims. The remaining allegations, mainly concerning defamation, had stricter requirements about jurisdiction — the plaintiffs had to establish that Betancourt and Trebbau were “domiciled” in New York. That battle has been ongoing since August. Yesterday, the judge ruled that Betancourt and Trebbau weren’t domiciled in New York and could consequently be relieved of the lawsuit.
In an article about the ruling in the Wall Street Journal, Reich’s attorney noted that the case continues against the third defendant, D’Agostino, and that Reich has moved to reinstate racketeering claims. Reich’s new proposed motion, filed on April 27, lays out allegations of wire fraud and racketeering more clearly. So after two years, it’s a matter of waiting to see the outcome.
But for now, Betancourt, Trebbau, and their legal and PR team must be feeling pretty pleased.
The judge also disclosed some details from the discovery process in his ruling. (I got the impression he was trying to give a little something to those of us following the case.) For instance:
On another note, Venezuela is experiencing a much worse electricity crisis now than it did in 2010. Last time, this crisis provided an opportunity for Derwick and others to secure procurement contracts for power plants, which, according to leaked documents, seemed to involve significant markups. That scenario eventually led to the circumstances discussed in this article. However, with the resources of the petrostate almost depleted, I’m not so sure who will step up to resolve Venezuela’s electricity woes this time.