A company arguing that the Venezuelan government is preventing it from claiming US$400 million from Lehman Brothers’ estate has seen its case thrown out by a New York court on grounds of lack of jurisdiction.
The Southern District Court of New York dismissed the case with prejudice on 27 January, ruling that there was no jurisdiction over the Venezuelan sovereign entities under the Foreign Sovereign Immunities Act (FSIA).
US firms Diaz Reus & Targ LLP and Winne, Banta, Hetherington, Basralian & Kahn PC represented Venequela’s government protection agency for bank deposits, FOGADE, while Foley Hoag LLP represented the banking regulator, SUDEBAN.
Smith Rocke, advised by Chadbourne & Parke LLP, brought the lawsuit, claiming that the government agencies had expropriated its entitlement to payments worth over US$400 million from the Lehman Brothers’ bankruptcy, which famously contributed to the unfolding of the global financial crisis in 2008.
“The problem for Smith Rocke, of course, is that these shareholders never had a legitimate legal claim to these assets, and now the court has told them so,” says Diaz Reus partner Michael Diaz [Jr.].