International Coalition files Lawsuit in District Court of Rotterdam, The Netherlands, for Damages Caused by Alleged Corrupti...
January 24 2017 - 12:01AM
Business Wire
An International coalition announced today that a lawsuit was
filed in Dutch Court yesterday on behalf of institutional investors
who suffered billions of dollars in losses in their investments in
Petroleo Brasiliero SA (“Petrobras”). Seeking declaratory relief as
a result of the alleged corruption of the company and its
executives, the coalition represents investors who purchased
Petrobras securities on the BM&FBOVESPA exchange in Brazil and
other securities purchased via transactions outside of, and not
covered by, litigation in the United States. The damaged investor
group believes the Netherlands is the optimal jurisdiction for
pursuing legal action, as this is where Petrobras Global Finance
B.V. and several other Petrobras entities and divisions are
domiciled. In addition, the Dutch legal system has an established
global settlement precedent for international investors who seek
compensation pursuant to damages caused by fraud and violations of
international securities laws.
The 172-page Writ alleges that when years of complex fraud and
bribery schemes orchestrated by management and officials of
Petrobras were finally revealed to the public in 2014, investors
lost billions of dollars, euros and Brazilian reals, resulting from
significant asset write-downs and precipitous declines in Petrobras
share prices.
The Writ has been filed by the Dutch based Stichting Petrobras
Compensation Foundation (“Foundation”) represented by a coalition
of Dutch, US, Brazilian and UK law firms and supported by a large
group of international investors and International Securities
Associations and Foundations Management Company Ltd. (“ISAF”). The
Foundation is a not for profit entity acting on behalf of a class
of damaged Petrobras investors. The Foundation is led by highly
experienced and independent board members, including: Mr. H. Th.
Bouma (Chairman), a former law partner at Pels Rijcken &
Droogleever Fortuijn and former deputy judge at the Court of Appeal
in The Hague; Mr. A.H. Korthals, former Defense Secretary of the
Dutch government and former Justice Secretary of the Dutch
government; Mr. C.J. Vriesman, former acting Mayor of the
municipality of Den Helder and former Director General for the
National Forest Service and the Ministry of Housing, Spatial
Planning and the Environment. More information about the
Foundation’s board and Supervisory Board can be found on the
Foundation website (http://www.pbcompensation.com/).
Goals of the Legal Action & How to Recover Losses
The litigation in the Netherlands is supported and financed by
ISAF and provides a vehicle for damaged investors to litigate for
compensation and to establish a binding settlement for the
securities involved in the litigation. Eligible Petrobras investors
are participating on a “success fee only” basis, with no risk or
upfront cost.
The Foundation invited Petrobras et al to discuss an equitable
resolution for the damage caused to investors represented by the
Foundation. To date, that invitation has not been accepted, hence
litigation has now commenced.
Jurisdiction
The Netherlands is the Optimal
Jurisdiction for suing Petrobras in this case
Via the Foundation, Dutch and International investors are
pursuing legal action in The Netherlands, where Petrobras Global
Finance B.V. and several other Petrobras entities and divisions are
domiciled. Furthermore, the effects of the alleged Fraud extended
into The Netherlands. The Foundation litigation and settlement
efforts cover the principal Petrobras equity securities traded on
the BM&FBOVESPA in Sao Paolo and via linked markets such as
Latibex on Bolsa De Madrid, together with certain Euro, Sterling
and USD denominated bonds issued via Petrobras Global Finance B.V.
The coalition’s decision to pursue litigation in The Netherlands,
also considers the fact that if the parties decide to settle during
the litigation, the Dutch legal system has an established global
settlement precedent for international investors who seek
compensation caused by fraud and violations of international
securities laws.
United States Securities
Lawsuits
The lawsuits filed in the US on behalf of investors cover losses
in American Depository Shares traded on the New York Stock Exchange
and certain US dollar denominated bonds. That means investor losses
stemming from shares that traded on the BM&FBOVESPA and certain
bonds, including Euro denominated bonds, are not included in the US
class action and opt-out lawsuits.
Brazil Arbitration
ISAF, in conjunction with a coalition of international and
cross-jurisdictional law firms, has extensively researched the
prospect of initiating arbitration between damaged investors and
Petrobras before the Market Arbitration Chamber of the
BM&FBOVESPA exchange in Brazil. This analysis, coupled with
analysis executed by institutional investors independent of ISAF,
leads to the conclusion that the Dutch litigation strategy
organized by the Foundation and ISAF is the optimal and most likely
route to a meaningful recovery for damaged investors.
About the Shareholder Foundation
Foundation Organizers. Stichting Petrobras Compensation
Foundation, a Netherlands-based foundation that acts on behalf of
damaged Petrobras investors, has appointed ISAF to interact with
investors, law firms, service providers, and media and to undertake
all administrative tasks, including the collection of client
trading data, loss calculations, loss certification, and all
aspects of documentation handling. In addition, ISAF will finance
all litigation costs, including legal fees, experts’ fees,
processing, data collection, administration, and claims
administration, including potential payout administration.
Law Firms. Lemstra Van der Korst N.V., a leading Dutch
litigation and class action law firm acts on behalf of the
Foundation and is consulting with securities litigation
firms, Motley Rice and Lowey Dannenberg Cohen &
Hart and Withers LLP and Brazilian law firms.
Claims Analysis and Processing. Battea Class Action
Services, LLC, an international leader in the class action
securities claims filing space, has been retained to collect client
data and process and validate investor loss calculations.
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ISAFAdam Foulke, +1 203-252-3378media@isafpetrobras.com