STRATEGIC INVESTMENTS LLC v. PETRÓLEOS DE VENEZUELA (2025)

MEMORANDUM ORDER

On July 17, 2025, the Court entered amended final judgment in these consolidated cases. Judgment was entered on Counts I and II in favor of plaintiffs 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 against defendants Petróleos de Venezuela, S.A. (“PDVSA”) and PDVSA Petróleo, S.A. (“PPSA”), in the amount of $1,151,873,984.38, and in favor of plaintiff Girard Street Investment Holdings LLC against the same defendants in the amount of $287,357,369.25. See ECF No. 256, No. 23-cv-10766. Judgment was entered on the remaining counts in favor of defendants PDVSA and PDV Holding, Inc. (“PDVH”), dismissing those counts with prejudice. Id.

Plaintiffs now move pursuant to 28 U.S.C. § 1963 for leave to register the judgment in the United States District Courts for the District of Delaware and the Southern District of Texas. Plaintiffs also seek a determination pursuant to 28 U.S.C. § 1610(c) that a “reasonable period of time” has elapsed since entry of judgment such that attachment of a foreign state's property is permitted under the Foreign Sovereign Immunities Act (FSIA). See ECF No. 263.

For the reasons set forth below, the Court grants the motion for leave to register the judgment in the other districts identified. The Court, however, declines to address the motion under 28 U.S.C. § 1610(c), as it deems that motion better directed at the court in the district in which attachment and execution of a foreign sovereign's property is sought.

I. Background

In these consolidated cases, plaintiffs sought to recover for unpaid debts owed to them under promissory notes issued by defendant PDVSA, a Venezuelan state-owned oil company. Plaintiffs also sought to hold jointly liable PPSA, a Venezuelan subsidiary of PDVSA and a guarantor of the notes, and, under an alter ego theory, PDVH, a wholly-owned American subsidiary of PDVSA.

Although the Court rejected plaintiffs’ attempts to hold PDVH liable as PDVSA's alter ego, it granted summary judgment in plaintiffs’ favor against PDVSA and PPSA for the value of the unpaid debts. See ECF No. 247. The Court entered final judgment accordingly. See ECF No. 256. Plaintiffs then appealed the portion of the judgment dismissing their claims against PDVH. See ECF No. 258. PDVH cross-appealed. See ECF No. 261. Those appeals are currently pending. However, neither PDVSA nor PPSA has appealed the Court's entry of judgment on the remaining counts, nor sought a stay of the judgment.

As this Court has previously noted, this is not the only litigation involving PDVSA and its assets. Of particular significance is Crystallex Int'l Corp. v. Bolivarian Republic of Venezuela, No. 1:17-mc-151, 2023 WL 4826467 (D. Del. July 27, 2023) (“Crystallex”), pending in the District of Delaware, in which the court found PDVSA to be an alter ego of the Venezuelan government and is currently conducting a judicial sale of PDVH shares to satisfy more than $20 billion of outstanding judgments against PDVSA and the government of Venezuela. Numerous creditors of both Venezuela and PDVSA -- but not plaintiffs -- have secured writs of attachment against the PDVH shares in connection with those proceedings.

II. Instant Motions

Plaintiffs now seek to register the judgment entered in this case in the United States District Courts for the District of Delaware and the Southern District of Texas so that they can recover against defendants’ assets located in those districts. See 28 U.S.C. § 1963. Plaintiffs also seek an order that a “reasonable period of time” has elapsed since entry of judgment such that they can proceed with attachment and execution under the FSIA. See 28 U.S.C. § 1610(c). The Court takes up each of these requests in turn.

A. 28 U.S.C. § 1963

Under 28 U.S.C. § 1963, a party may register a judgment entered in any district court in any other judicial district “when the judgment has become final by appeal ․ or when ordered by the court that entered the judgment for good cause shown.” 28 U.S.C. § 1963. Once registered in another district, it is as if the judgment was entered by a district court of that district and the judgment “may be enforced in like manner.” Id. Plaintiffs argue that they have shown good cause to register this Court's judgment in the District of Delaware and in the Southern District of Texas.

Good cause under section 1963 is not a demanding standard. A party may establish good cause to register a judgment in another judicial district “upon a mere showing that the [party against whom the judgment has been entered] has substantial property in th[at] other ․ district and insufficient [property] in the rendering district to satisfy the judgment.” Coudert v. Hokin, No. 12 Civ. 110 (ALC), 2018 WL 4278332, at *2 (S.D.N.Y. July 30, 2018) (quoting Jack Frost Lab'ys, Inc. v. Physicians & Nurses Mfg. Corp., 951 F. Supp. 51, 52 (S.D.N.Y. 1997)). A judgment debtor's assets need not be proven with “exact evidence,” but may be supported by a “lesser showing.” Jamil v. SPI Energy Co., No. 16-CV-1972 (JSR), 2017 WL 4326065, at *1 (S.D.N.Y. Sept. 8, 2017) (quoting Lankier Siffer & Wohl, LLP v. A. Cal Rossi, Jr., No. 02 Civ. 10055 (RWS), 2004 WL 1627167, at *1 (S.D.N.Y. July 21, 2004)).

Additionally, because proof of good cause is an alternative to finality, a litigant may register their judgment for good cause notwithstanding the existence of a pending appeal. See Lankier, 2004 WL 1627167, at *1; see also, e.g., Tchrs. Ins. & Annuity Ass'n of Am. v. Ormesa Geothermal, No. 87 CIV. 1259 (KMW), 1991 WL 254573, at *2 (S.D.N.Y. Nov. 21, 1991) (“In this case, because the appeal has not become final and the time to appeal has not expired, Plaintiff must demonstrate good cause to register its judgment in other districts.”).

Plaintiffs represent, and defendants do not contest, that defendants have no assets located within the Southern District of New York. In support of this contention, plaintiffs’ counsel has submitted an affidavit stating that counsel conducted a diligent search of the public record and of the discovery documents produced in this case and was unable to locate any property belonging to either PDVSA or PPSA located in this district. See Decl. of Michael J. Baratz in Support of Pl.’s Mot. for leave to Register J. in Other Fed. Cts. ¶ 4, ECF No. 266 (“Baratz Decl.”). In the “absence of contrary evidence,” the Court accepts as true plaintiffs’ assertions regarding the lack of property belonging to defendants in this district. Jamil, 2017 WL 4326065 at *1 (quoting Lankier, 2004 WL 1627167 at *2); see also Def.’s Mem. of Law in Opp. to Pl.’s Mot. for Leave to register J. in Other Fed. Cts. at 3, ECF No. 269 (“Def.’s Mem.”) (addressing only the second prong of the good cause standard). Defendants also have not posted a supersedeas bond. See Pl.’s Mem. of Law in Support of Mot. for Leave to Register J. in Other Fed. Cts. at 2, ECF No. 265 (“Pl.’s Mem.”). This, too, weighs in favor of a finding of good cause. See Ambac Assur. Corp. v. Adelanto Pub. Util. Auth., No. 09 CIV 5087 (JFK), 2014 WL 2893306, at *4 (S.D.N.Y. June 26, 2014).

As for the presence of “substantial property” in the two judicial districts in which plaintiffs seek to register the judgment, plaintiffs have satisfied the “lesser showing” required. Coudert, 2018 WL 4278332, at *2. Plaintiffs represent, based on a diligent search of the public record and of the discovery documents produced in this case, that defendant PDVSA owns various Delaware entities, many of which have a principal place of business in Texas, and which owe debts to, or hold assets of, both defendants.¹ See Baratz Decl. ¶¶ 5-6.

In response, defendants argue that plaintiffs’ “cursory memorandum” and supporting declaration are insufficient to support a finding of “substantial property” necessary to establish good cause. Def.’s Mem. at 3. Notably, however, defendants do not actually dispute the existence of, or offer contrary evidence regarding, the assets identified by plaintiffs in their supporting declaration. And, as noted above, in the absence of contrary evidence, a judgment creditor's light burden under section 1963 may be met by affidavit. See Jamil, 2017 WL 4326065 at *1-2; Lankier, 2004 WL 1627167, at *2 (“In the absence of contrary evidence, the affidavit in support of the judgment creditors’ motion should be presumed true.” (quoting Donel Corp. v. Kosher Overseers Ass'n of Am., Inc., No. 92 Civ. 8377 (DLC) (HBP), 2001 WL 1512589, at *2 (S.D.N.Y. Nov. 28, 2001))); see also, e.g., Victor P. Muskin, P.C. v. Ketchum, No. 04 Civ. 283 (KNF), 2004 WL 2710023, at *1 (S.D.N.Y. Nov. 23, 2004) (finding plaintiff's declaration stating that defendant “has substantial property in another judicial district” and “no assets within this judicial district” sufficient to establish good cause).

Here, there is no question that plaintiffs’ supporting declaration identifies property of the defendants located in the districts in which plaintiffs seek to register the judgment. See Baratz Decl. ¶ 5 (representing that PDVSA's “wholly owned subsidiaries” are Delaware entities with principal places of business in Texas); id. ¶ 6 (representing that identified entities “owe debts to[ ] or have assets of” defendants). And the Court is not persuaded by any of defendants’ reasons for disregarding the property identified.

First, with respect to PDVH, it is undisputed that PDVSA “wholly own[s]” PDVH, a Delaware entity, and that PDVH is therefore PDVSA's “property,” even if not its corporate alter ego.² Defendants argue that the PDVH shares nonetheless cannot support a “good cause” finding because the shares are already subject to the Crystellex judicial sale and will be used to satisfy writs of attachment sought by other creditors as part of those proceedings. See Def.’s Mem. at 4. Establishing good cause to register a judgment under section 1963 does not depend, however, on an assessment of whether the “substantial assets” identified in the foreign district will be able to be executed upon. The only question for the certifying court is whether the judgment should be certified, not “whether the assets [identified] may be levied.” Coudert, 2018 WL 4278332 at *2. Indeed, the “latter question is governed by the law of the state in which the judgment is [to be] registered” and is therefore best addressed by a court in that district. Id. at *2-3.

Second, with respect to debts owed to and assets of defendants held by their affiliates, defendants again do not dispute that debts are owed or assets held by the identified affiliates. See Def.’s Mem. at 5-6 (discussing debts owed to PDVSA and PPSA); see also Pl.’s Reply in Support of Mot. for Leave to Register J. in Other Fed. Cts. at 1 nn. 1-2, ECF No. 270 (“Pl.’s Reply”) (identifying references in the record to funds payable to PDVSA and PPSA from its Delaware- and Texas-based affiliates). True, plaintiffs have not identified with precision the property against which they hope to execute judgment, but plaintiffs are not required at this stage to “demonstrate to a complete certainty that the assets or property in question are extant.” Coudert, 2018 WL 4278332, at *3.

Additionally, the Court sees no meaningful reason, for the purposes of the “good cause” analysis, to disregard “property” in the form of debts owed or money payable to defendants. Although plaintiffs’ ability to satisfy the judgment with funds held by third parties will ultimately be determined by the law of the jurisdiction in which the judgment is registered, garnishment of funds held by third parties is one way in which a judgment creditor can potentially satisfy a judgment. See, e.g., Simms v. 121Fifteen Diamonds, LLC, 2024 WL 4826830, *2 (E.D. Mo. Nov. 19, 2024) (concluding that a judgment creditor seeking to recover from a company “indebted to Defendant” must register the judgment in the district in which the proposed garnishee is located). Given that the purpose of section 1963 is to “simplify and facilitate collection on valid judgments,” Fidelity Nat'l Fin., Inc. v. Friedman, 935 F.3d 696, 700 (9th Cir. 2019) (citation omitted); accord Coleman v. Patterson, 57 F.R.D. 146, 149 (S.D.N.Y. 1972), plaintiffs’ representation that Delaware- and Texas-based entities hold debts payable to defendants is sufficient to demonstrate that at least potentially recoverable assets are located in those districts. The Court need not probe any further at this juncture.³

Accordingly, whether or not plaintiffs will ultimately be able to execute against any of the assets identified, they have satisfied their modest burden to demonstrate the presence of “substantial property” in the districts in which they seek to register the judgment. The Court therefore concludes that plaintiffs have demonstrated good cause to register the judgment in those districts.

Defendants attack this conclusion on one additional ground. They argue that plaintiffs “have not explained how they could register their judgment” without first receiving a license from the Office of Foreign Assets Control (OFAC), given that defendants’ property is “blocked” property under U.S. sanctions against Venezuela and plaintiffs are therefore prohibited from “dealings of any kind” in that property absent a special license from OFAC. Def.’s Mem. at 2 (quoting Frequently Asked Question 9, Off. of Foreign Assets Control (Aug. 11, 2024), https://ofac.treasury.gov/faqs/9); see also OI Eur. Grp. B.V. v. Bolivarian Republic of Venezuela, No. MC 19-290-LPS, 2022 WL 611563, at *1 (D. Del. Mar. 2, 2022) (“Under certain executive orders and a sanctions regime implemented by the U.S. Treasury Department's Office of Foreign Assets Control ․ PDVH shares are ‘blocked property,’ so transactions involving those shared are prohibited.”).

This argument, however, mistakenly conflates entry of judgment with the transfer of assets. The only result of a successful motion under section 1963 is that the judgment may be registered in a foreign judicial district with the effect that it is as if a court in that district had entered the judgment. See 28 U.S.C. § 1963. If the judgment creditor wishes to recover against those assets, it may then go through the separate process of attachment and execution. See Crystallex, No. 1:17-mc-151, 2023 WL 4826467, at *2 (D. Del. July 27, 2023) (distinguishing between the registration of a judgment under 28 U.S.C. § 1963 and executing on that judgment); see also Fed. R. Civ. P. 69(a)(1) (providing the procedure for enforcing a money judgment). Registration of the judgment, however, does not itself effectuate a transfer of any interest in property.

Thus, regardless of whether U.S. sanctions prohibit plaintiffs from enforcing their judgment against defendants’ assets without a special license, defendants have not pointed to any precedent establishing that U.S. sanctions prohibit the mere entry of judgment against a blocked entity. See Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355, 361-62 (11th Cir. 1984) (explaining that an OFAC license is “not a prerequisite to initiating an in personam lawsuit” because an in personam suit “is merely an attempt to establish liability and fix damages,” and does “not focus on any particular property within the jurisdiction”). Indeed, if the sanctions had this effect, this Court could not have entered final judgment in the first place. Notably, however, defendants have never advanced such a theory.⁴

Nor does the law bear out such an argument. Other courts to have considered this issue in the context of this and analogous foreign asset control regimes have nearly universally concluded that “foreign blocking regulations bar only those judicial proceedings that effect a transfer of foreign property or property interests.” Nat'l Oil Corp. v. Libyan Sun Oil Co., 733 F. Supp. 800, 809 (D. Del. 1990) (emphasis added); see also 31 C.F.R. § 591.407 (prohibiting the “enforcement of any ․ judgment” through “execution, garnishment, or other judicial process purporting to transfer” blocked property (emphasis added)). This does not include the entry of judgment, which falls short of transferring any property or property interests. See Nat'l Oil Corp., 733 F. Supp. at 809-10 (collecting cases concluding the same); see also, e.g., Casa Express Corp. v. Bolivarian Republic of Venezuela, 492 F. Supp. 3d 222, 228 (S.D.N.Y. 2020) (explaining that, under U.S. sanctions against Venezuela, “a party is prohibited from seizing, attaching, encumbering, or freezing [blocked] assets to enforce a judgment, but not from legal actions that stop short of transferring control of property”); Koch Mins. Sarl v. Bolivarian Republic of Venezuela, 514 F. Supp. 3d 20, 44 (D.D.C. 2020) (rejecting Venezuela's argument that U.S. sanctions prohibit the conversion of an arbitral award to “a judgment of th[e] [c]ourt” because “[c]odifying” the award “does not reach into [PDVSA's] pockets”); OI Eur. Grp., 2022 WL 611563, at *6 (“[O]nly the actual, eventual encumbering of the PDVH shares with a lien would ‘create, surrender, release, convey, transfer, or alter’ any right or interest in those shares.”).

If plaintiffs seek to enforce the judgment against defendants’ assets after registering it in the foreign judicial districts identified, they may well be obliged to obtain an OFAC license at that point. See Koch Mins. Sarl, 514 F. Supp. 3d at 44 n.14; see also, e.g., Crystellex, 2023 WL 4826467, at *3 (writs of attachment against blocked Venezuelan property may not be “formally issued and served” until “either OFAC grants [the judgment creditor] a specific license ․ or the sanctions regime changes”). However, because the instant motion seeks leave only to register the judgment, and not to enforce it, that is not a consideration the Court must address today. Cf. Coudert, 2018 WL 4278332, at *2 (“[A] Section 1963 analysis does not involve an assessment of whether the assets in question are, in fact, able to be levied in the other jurisdiction.”).

Accordingly, plaintiffs’ motion for leave to register the judgment in the United States District Courts for the District of Delaware and the Southern District of Texas is granted.

B. 28 U.S.C. § 1610(c)

Plaintiffs also seek a determination from the Court that a “reasonable period of time” has elapsed since the entry of judgment such that attachment and execution of defendants’ property is permitted under the FSIA. See 28 U.S.C. § 1610(c). The FSIA permits certain categories of foreign state property to be attached and executed upon based on a judgment of a U.S. court. Id. § 1610(a)-(b). “No attachment or execution” is permitted, however, until the court “determine[s] that a reasonable period of time has elapsed following the entry of judgment.” Id. § 1610(c). Plaintiffs ask the Court to make such a determination.

The Court concludes that this request is better directed to the court from which plaintiffs seek attachment and execution of the property in question. Indeed, section 1610(c) itself suggests that it is the court that orders “attachment or execution” that may not do so without first “having determined that a reasonable period of time has elapsed.” Id. Accordingly, because neither attachment nor execution is being sought from this Court and because a finding that “a reasonable period of time” has elapsed is not a prerequisite to registering the judgment in another judicial district, the Court declines to take up this request.

III. Conclusion

For the reasons stated above, plaintiffs’ motion for leave to register the judgment in the United States District Courts for the District of Delaware and the Southern District of Texas is granted. Plaintiffs’ request for a determination that a “reasonable period of time” has elapsed is denied without prejudice.

SO ORDERED.

FOOTNOTES

1.   Plaintiffs list among defendants’ Delaware-registered subsidiaries PDV Holding, Inc., PDV Chalmette LLC, Citgo Petroleum Corp., LDC Supply Int'l, LLC, CITGO Aruba Holding LLC, and PDV USA, Inc. See Baratz Decl. ¶ 5.

2.   To the extent that defendants question whether plaintiffs’ motion sufficiently identifies PDVSA's shares in PDVH as among defendants’ “substantial property,” see Def.’s Mem. at 3-4, this contention is without merit. Plaintiffs clearly identify PDVH as “wholly owned” by PDVSA and, thus, by definition, PDVSA's “property.” See Baratz Decl. ¶ 5; see also Pl.’s Mem. at 4 (discussing PDVSA's “equity interest” in PDVH). It is not clear why a specific reference to PDVH's “shares” would be necessary.

3.   For similar reasons, the Court does not find plaintiffs’ arguments made in support of their alter ego claim about the ownership of certain assets held by PDVSA and PPSA affiliates to be determinative of the separate question of whether those assets are now potentially recoverable by plaintiffs. See Pl.’s Consolidated Reply Mem. in Support of Their Mot. for SMJ at 15, ECF No. 230 (arguing that money paid by affiliates to third parties at PDVSA's direction to reduce liabilities owed by affiliates to PDVSA and PPSA was money that “belonged” to the affiliates and not to PDVSA or PPSA). To the extent that a debt owed to a judgment debtor may be subject to enforcement, it is immaterial that money used to satisfy the debt “belongs” in the first instance to the third party. Of course, it will be up to the court in the district in which enforcement is sought to determine whether the identified debts are, in fact, subject to enforcement, and, if necessary, to consider whether judicial estoppel prevents plaintiffs from advancing certain claims to recovery. See Def.’s Mem. at 6.

4.   Defendant PDVH (which is not a party to the current dispute), argued earlier in the litigation that, even if plaintiffs prevailed on their alter ego theory, U.S. sanctions would prevent plaintiffs from “executing on PDVH's property.” Def. PDVH's Mem. of Law in Support of MTD at 5, ECF No. 26, No. 24-cv-4448 (emphasis added); see also id. (“No turnover order can issue without a specific license from [OFAC].”); Def. PDVH's Mem. of Law in Support of MTD at 5, ECF No. 51, No. 24-cv-4448 (same). In making this argument, however, neither PDVH nor any of the remaining defendants, argued that U.S. sanctions would also prohibit the entry of judgment.

JED S. RAKOFF, United States District Judge: