The lawsuit by Conoco against PDVSA US Litigation Trust must have many people quite nervous. There are inaccuracies in the claim’s details, such as the true parent company of Algamex in the Isle of Man, or who exactly is behind the Trust. In any case, leaks have started, and one of the emails that arrived in my inbox this morning contains details of the Engagement Letter between Boies Schiller Flexner LLP (BSF) and Nelson Martínez, in his capacity as Minister of Energy for Venezuela representing PDVSA.
To say that Venezuela has been thoroughly messed up (please forgive the language) would be an understatement. Martínez, who is now enjoying life in some dungeon in Venezuela, is MIA. This means that the arrangement under which Martínez accepted to be the figurehead responsible for deals with Boies & co is, erm, questionable (?). Given that the representative of one of the parties is in jail and cannot talk on the phone, who is Boies dealing with now? Furthermore, what happened to the agreement imposed by Boies where parties outside PDVSA couldn’t engage or participate in any way with Boies’ law firm in trust litigation matters?
It doesn’t stop there, of course. In light of such a crazy and totally illegal arrangement under Venezuelan law, how can Boies then offer Reinaldo Muñoz to testify? Muñoz is not an employee of PDVSA; in fact, he has absolutely nothing to do with PDVSA, the Ministry of Energy of Venezuela, nor any remotely related entities to energy/oil matters. Muñoz is the Attorney General of Venezuela (Procurador). It’s no wonder Boies claims the State Doctrine: a quick check of the Trust’s reputation would surely expose its utter illegality.
Then we have how the revenues will be split. Boies is a good businessman; the yachts and lifestyles that he and his partner in crime have are expensive… Not only can Algamex provide the necessary funds for the Litigation Trust, but BSF is also collaborating! So, Martínez agreed that PDVSA would cover the costs incurred by Boies & Algamex before the gross returns from the claims are divided.
This brings me to the profit split: confirming previous sources, Boies Schiller Flexner LLP will receive 22% of all profits. The 22% share of Boies will then be split 65/35 with Meister Seelig & Fein LLP. Algamex, read Bill Duker, will receive another 22%, and the Brennan Group (John Brennan) will also get a 22%. PDVSA is left with 34% of what remains after paying the costs to Boies & Algamex, liquidating and agreeing on the profit’s value, and splitting the rest 66/34.
This is pure blackmail. I asked Boies if he or any of the dubious parties associated with him paid bribes to secure such a deal. Because here we have the most high-profile lawyer in the United States, getting a deal that makes no commercial sense for PDVSA (easily the most corrupt energy company in the world), and we are supposed to believe he just landed the deal, just like that, without greasing any palms somewhere? The involvement of Wilmer Ruperti makes complete sense now.
Boies and his financial secretary were asked for comments. So was Alexander Pencu from Meister Seelig & Fein. None have responded.
The interesting aspect of this, at least for me, is that Conoco Phillips’ lawsuit is merely an action against the components of the PDVSA US Litigation Trust: BSF, Algamex, Brennan Group, Meister Seelig & Fein LLP, Vincent Andrews, Edward Swyer (is that another Swyer connected there?), and Nelson Martínez / PDVSA. The 34% stake of PDVSA won’t cover much, but still: time for popcorn!