The race of the bondholders began to charge Venezuela

Venezuelan bondholders begin to join other creditors in the race to recover the investment, after the country opted for a selective default since November last year, trying to protect its most precious asset: Citgo.

The lawsuit filed by Casa Express Corp on Wednesday in the United States , opens a window to small investors, who do not have to wait for the support of others to make their claims before the juticia, due to a clause that contains in this case the sovereign bond 2018 .

"When the bonds are under a tax agency agreement instead of a bond trustee, any holder can sue the issuer," Mitu Gulati, a professor at Duke Law School, told Red Latam.

The holders of bonds due in 2034 (grouped in a committee) have also requested the acceleration of their payments and once the fiscal agent has notified the acceleration of that issue, any holder of those bonds could also sue, Gulati said. After that the holders do not have to be part of the accelerator group to sue.

The struggle of the many creditors of Venezuela to collect is arduous and includes those who try to receive what was granted in arbitral tribunals, after expropriations (Crystallex, Rusoro and Conoco cases, among others).

Gulati points out that Casa Express opens the possibility that as such cases arise, the government could be "tempted to make liquidation agreements" with the holders that sue (for the low amount). A claimant who obtained an agreement could receive the payment without the money having to go through a clearing house, which allows the government to choose who will be paid and who will not.

While the bondholders may file "alter ego" claims, there is no guarantee that they will end up with lawsuits against PDVSA. Delaware's decision in favor of Crystallex is currently on appeal and faces opposition from investment funds.

Blackrock and Contrarian Capital filed a brief with the appeals court on December 17, saying that the decision of the lower court (to seize Citgo) would impose "severe damage" on them, as holders of the PDVSA guaranteed notes due in 2020 , and other creditors of the oil company.