Loading ...EXCLUSIVE: Venezuela and Crystallex Reach Billion Dollar Settlement over Expropriation
“The settlement looks to be between $1 billion and $1.4 billion,” estimates Russ Dallen, an international lawyer and banker who follows the proceedings.
MIAMI — Crystallex — owed $1.4 billion for the expropriation of its Venezuela mining subsidiary — has reached a billion dollar settlement with Venezuela.Lawyers for Crystallex will ask an Ontario Superior Court to approve the settlement — which is to be sealed at Venezuela and Crystallex’s request — this morning.
“Following months of start-stop negotiations with Venezuela, on November 15, 2017, Crystallex (through Venezuela Counsel) concluded the Settlement Agreement. The signed and stamped official version of the Settlement Agreement was received by Crystallex on November 20, 2017,” reports Crystallex director Harry Near in the court filing.
“The quantum of recovery that Crystallex will achieve under the Settlement Agreement is extraordinary when compared to the amount of the Award, and I understand this may be the largest settlement that Venezuela has ever agreed to in relation to an arbitral award,” says Near.
“That would put the award between the $1 billion Gold Reserve was able to obtain a settlement for and the $1.4 billion that Crystallex had been awarded,” said Russ Dallen, an international lawyer and banker who follows Venezuela carefully and who uncovered the court filings for the Latin American Herald Tribune (see below).
The Settlement Agreement
According to the Court filings, Venezuela has agreed to pay Crystallex “a specified amount of the Award, plus interest.”
The Settlement Amount is to be paid in a series of instalments, which include a series of up front instalments, recurring monthly instalments thereafter, and annual instalments until the Settlement Amount has been fully satisfied.
“On its face, the Settlement Agreement should provide value to the Company over time beyond the quantum of asserted creditor claims against the Company,” says Near.
“The first instalment is payable on [date redacted], provided other conditions of the settlement have been satisfied;
upon payment of the first instalment, the Company will suspend all actions and proceedings it has commenced to enforce the Award and take no further steps to enforce the Award,” the court filings say.
“Upon payment of the last instalment, the Crystallex will discontinue or terminate all actions and proceedings to enforce the Award.”
“If Venezuela breaches any of its payment obligations under the Settlement Agreement, Crystallex will be entitled to re-commence all of its enforcement activities suspended by the settlement, as well as pursue and initiate new enforcement and collection efforts,” says Near.
“As we have found out this week with Gold Reserve, the problem now becomes getting the money out of Venezuela,” says Dallen. “Gold Reserve buried a bombshell on Wednesday night when it reported its third quarter financials — Venezuela had been paying its $29.5 million dollar a month settlement payment into a Venezuela state-owned bank in Caracas since August and Gold Reserve had been unable to get that $88.5 million out of Venezuela.”
Gold Reserve says Venezuela Payments on $1 Billion Expropriation Stuck by Sanctions in Caracas