Court Opinion

ID: 9896199
Source: CourtListenerOpinion
Date Created: 2023-11-09 19:04:15.596495+00
Date Added: 2024-06-11T09:14:16.142952
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

REFINERIA DI KORSOU N.V.,                   )
                                            )
      Plaintiff                             )
                                            )
      v.                                    )      C.A. No. N23J-01330
                                            )
PETRÓLEOS DE VENEZUELA, S.A.,               )
                                            )
      Defendant                             )

                           Submitted: October 6, 2023
                           Decided: November 9, 2023

                   On Plaintiff’s Motion for Reconsideration of
                    Commissioner’s September 8, 2023 Order
                                    DENIED

                                    ORDER

Michael Busenkell, Esquire; Margaret F. England, Esquire; Michael D. Van
Gorder, Esquire; Gellert Scali Busenkell & Brown LLC, Wilmington, Delaware;
Jeffrey Boxer, Esquire (pro hace vice) Carter Ledyard & Milburn LLP, New York,
New York; Attorneys for Plaintiff

Samuel T. Hirzel, II, Esquire; Gillian L. Andrews, Esquire; Heyman Enerio
Gattuso & Hirzel LLP, Wilmington, Delaware; Claire A. Delelle, Esquire (pro
hace vice); Nicole Erb, Esquire (pro hace vice); Benedict S. Bernstein, Esquire
(pro hace vice); White & Case LLP, Washington, DC; Attorneys for Defendants

JOHNSTON, J.
          1. By Order dated September 8, 2023, Commissioner Salomone granted

Defendant Petroleos de Venezuela, S.A.’s Motion to Quash Writ of Attachment

Fieri Facias and Stay Action. Ruling from the bench, the Commissioner found that

the securities at issue are certificated securities and that the Writ was obtained in

violation of Delaware law. Therefore, the Commissioner granted the Motion to

Quash the Writ and stayed the matter in favor of related litigation pending in the

U.S. District Court for the Southern District of New York. The Commissioner

declined to render a decision on the alternative bases argued in support of quashing

the Writ.

          2. The Commissioner relied on Deng v. HK Xu Ding Co., Limited.1 In Deng,

this Court held that Section 324(a) of the Delaware General Corporation Law

requires compliance with Section 8-122 for certificated securities.                 To attach

certificated securities and obtain an order to sell the security to satisfy a judgment,

the certificate must actually be seized.2

          3. Plaintiff moved for reconsideration of the September 8, 2023 Order.

Plaintiff argues that the Commissioner misapplied the holding in Deng and

1
    2023 WL 3318322 (Del. Super.).
2
 Id. at *3 (This case presently is on appeal to the Delaware Supreme Court. Oral argument is
scheduled for December 6, 2023.)

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improperly engrafted language to the definition of what constitutes a certificated

security under Delaware’s Uniform Commercial Code. Plaintiff’s position is based

in part on a letter from Defendant to the Delaware District Court, stating that

Defendant “is unable to locate the original share certificate or ascertain whether such

share certificate is still in existence.”       Therefore, the security is no longer

“certificated.” In Deng, the known certificate representing the shares was in the

custody of a third-party.

      4. Defendant responds that certificated shares retain their status as certificated

securities even when the original certificate is lost. It is undisputed that the

certificate was issued and never cancelled. A motion has been filed in the District

Court requesting an order compelling the issuance of a new stock certificate.

      5.   Pursuant to Superior Court Civil Rule 132(a)(3)(iv): “A judge may

reconsider any hearing or pretrial matter under subparagraph (3) only where it has

been shown on the record that the Commissioner’s order is based upon findings of

fact that are clearly erroneous, or is contrary to law, or is an abuse of discretion.”

      6. The Court finds that the Commissioner appropriately relied upon Deng in

finding that the shares at issue are certificated securities. The certificated securities

were not legally attached because the certificate was not actually seized. The matter

pending in this Court was properly stayed pending litigation between the parties to

resolve the underlying issues.

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      7. The Court finds that the Commissioner’s order is based upon findings of

fact that are not clearly erroneous, not contrary to law, and not an abuse of discretion.

      THEREFORE, after careful and de novo review of the record, Plaintiff’s

Motion for Reconsideration of Commissioner’s September 8, 2023 Order is hereby

DENIED.

      IT IS SO ORDERED.

                                              /s/ Mary M. Johnston
                                         The Honorable Mary M. Johnston

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