Efforts are underway to recover investor losses related to the revelations of allegations of rampant corruption, money laundering, bribery and violations of securities laws in multiple jurisdictions. The first investor lawsuit was filed as a class action in the United States on behalf of investors who purchased American Depository Shares on the New York Stock Exchange, but is limited to only cover losses in those ADS shares and certain US dollar denominated bonds. Importantly, this US class action does not cover investor losses that stem from the largest class of shares, which traded on the BOVESPA or LATIBEX, and it will not cover losses on certain other bonds, including Euro denominated bonds.
International Securities Associations and Foundations Management Company for Damaged Petrobras Investors (Bovespa) Ltd. (“ISAF Petrobras”); and a coalition of international law firms, including Lemstra Van der Korst N.V., Motley Rice, Withers LLP, and Lowey Dannenberg Cohen & Hart, support Stichting Petrobras Compensation Foundation. The Foundation has appointed to the board Benk Korthals, former justice secretary and defense secretary of the Netherlands, and Dick Bouma, a retired partner at Pels Rijcken Droogleever Fortuijn N.V., an expert on Dutch-style class actions and an experienced board member of claim foundations.
The Foundation provides a vehicle to litigate on behalf of Petrobras investors and/or to establish a binding settlement that, together with the US class action, provides for a truly global settlement. Additional goals of the collective litigation include increasing the level of influence of independent directors and safeguarding the interest of all stakeholders through improvement in compliance standards and control measures, to a level normally expected by international institutional investors. It is important that investors (a) who purchased common and preferred shares of Petrobras and/or bonds issued by Petrobras Global Finance B.V. or Petrobras International Finance Company S.A. anytime before July 28, 2015 and (b) suffered and/or are in danger of suffering (further) damages as a consequence of the alleged fraud, contact ISAF Petrobras so that it can determine eligibility to pursue claims in the Dutch court system. Eligible damaged investors can join the Foundation with no upfront cost or risk.
No Cure-No Pay
Damaged investors who elect to join the ISAF-organized shareholder groups in Spain and the Netherlands can do so at no upfront financial risk or commitment. ISAF Petrobras absorbs all costs associated with the litigation, including: fixed legal fees, expert fees, court fees, and claims processing fees (if litigation is successful), as well as all other costs associated with plaintiff liability (so-called “Loser Pays” insurance). In exchange for financing the Spanish Shareholder Association and the Dutch Stichting, ISAF will collect a contingency fee if the litigation results in a successful financial outcome for damaged investors.
Procedure for Bringing Claims Against Petrobras in the Netherlands
On January 23, 2017, SPCF filed a complaint against Petrobras on behalf of damaged minority shareholders of Petrobras. The Foundation is the litigant, or the equivalent of a so called “Lead-Plaintiff” in the litigation. Damaged investors have supported the Foundation by signing a letter of support and by joining the ISAF organized investor coalition.
If the court rules in favor of the Foundation, it will mean that a judgement for declaratory relief has been rendered by a court in the EU and that the judgement is enforceable throughout the EU. At this point in the litigation, there are a number of possible outcomes. Based on the experiences of prior cases of this nature, a likely possible outcome is that Petrobras would discuss with the Foundation the possibility of achieving a global peace, at least throughout the EU, by availing themselves of the Dutch settlement act (WCAM). If Petrobras rejects the path to a global resolution with damaged shareholders via the WCAM procedure, SPCF, with the administrative support and financial backing of ISAF, will pursue individual claims on behalf of eligible investors in the Dutch Courts.
ISAF is encouraging all interested and eligible claimants to register a claim with ISAF and support the Foundation. By executing the ISAF Participation Agreement and the Foundation Support Letter, eligible claims for damages will be properly registered.
To determine eligibility and the extent of estimated losses, ISAF will analyze Petrobras transaction data from 01 January 2014 through 31 December 2015.
The eligible securities and their identifiers are listed below. In addition to the specific securities listed below, the Dutch litigation will include all Petrobras issued securities that are not included in the US settlement, which has yet to be finalized.
|Petroleo Brasileiro SA||BRPETRACNOR9||Common Shares|
|Petroleo Brasileiro SA||BRPETRACNPR6||Preferred Shares|
|Petrobras Global Finance B.V||XS0982711631||01/15/2018|
|Petrobras Global Finance B.V||XS0716979249||03/07/2018|
|Petrobras Global Finance B.V||XS0835886598||04/01/2019|
|Petroleo Brasileiro SA||BRPETRDBS043||05/20/2020|
|Petrobras Global Finance B.V||XS0982711987||01/14/2021|
|Petrobras Global Finance B.V||XS0716979595||03/07/2022|
|Petrobras Global Finance B.V||XS0835890350||10/02/2023|
|Petrobras Global Finance B.V||XS0982711714||01/14/2025|
|Petrobras Global Finance B.V||XS0718502007||12/14/2026|
|Petrobras Global Finance B.V||XS0835891838||10/01/2029|
|Petrobras Global Finance B.V||XS0982711474||01/16/2034|