Breaking away from the trend that has dominated other U.S. courts in recent years, the New York Court dismissed the alter ego theory to hold PDV Holding liable for PDVSA’s debts. Judge Jed S. Rakoff thus freed the subsidiary of Petróleos de Venezuela S.A. from the legal strategy that has long been the strangling key for Venezuela.
In this case, although the plaintiffs succeeded in establishing the liability of PDVSA and PDVSA Petróleo S.A. for the promissory notes, they did not achieve their aim of holding PDVH accountable for the debts of the Venezuelan state oil company through the alter ego theory.
This is a landmark decision for the state oil company and the Venezuelan republic, which has been overwhelmed by lawsuits over the years, seeking to recover various debts using Venezuela’s most valuable asset abroad: CITGO.
Without intending to absolve Chavismo of responsibility for its mismanagement, corruption, and erratic expropriation policies, it suffices to glance at the numerous lawsuits that present bizarre arguments to seize money from Venezuelan assets under the alter ego theory.
The Lawsuit
On May 20, 2025, Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York issued an order in the case brought by investment firms G&A Strategic Investments I LLC, G&A Strategic Investments II LLC, G&A Strategic Investments III LLC, G&A Strategic Investments IV LLC, G&A Strategic Investments V LLC, G&A Strategic Investments VI LLC, and G&A Strategic Investments VII LLC (collectively, G&A) and Girard Street Investment Holdings LLC (Girard Street) against Petróleos de Venezuela S.A. (PDVSA), PDVSA Petróleo S.A. (PPSA), and PDV Holding Inc. (PDVH).
The plaintiffs G&A and Girard Street filed a motion with the court requesting the issuance of a summary judgment against the defendants (PDVSA, PPSA, and PDVH) in the consolidated cases. The motion focuses on different charges within the lawsuits.
In Charges I and II, the plaintiffs allege that PDVSA and PPSA are jointly and severally liable for unpaid promissory notes owed to the plaintiffs. Therefore, they seek a summary judgment on this point from the court.
In Charge III, the plaintiffs want PDVH declared ultimately responsible for PDVSA’s debts. To support this, they argue the “alter ego” theory, claiming that PDVH’s assets should be available to satisfy PDVSA’s debts due to an alleged lack of distinction between the entities. The plaintiffs also seek a summary judgment on this point.
The Decision
The court announced a forthcoming detailed opinion on the ruling.
Judge Jed S. Rakoff, after considering the written submissions from the parties and the oral arguments presented on May 7, 2025, ordered:
Grants the motion for summary judgment in favor of the plaintiffs on Charges I and II, confirming the liability of PDVSA and PPSA regarding the promissory notes.
Grants the motion for summary judgment in favor of the defendants (PDVSA and PDVH) on Charges III and IV, dismissing these charges.
Denies the plaintiffs’ motion for summary judgment on Charges III and IV.
The decision states that “at the appropriate time, when final judgment is pronounced,” the judge will provide an opinion to explain the reasons for these decisions.
Watch on Sin Filtros “Chevron, Imprisoned and Elections: The Geopolitical Game in Venezuela”: