Dear Friends,

Look at this, folks! Retired Skadden Arps partner and former TransPerfect Custodian Bob Pincus — who orchestrated the court-ordered highway robbery of $50 MILLION in the TransPerfect case — is at it again! He’s “raising eyebrows” by asking to exceed a $2 million cap on his fees in the sale of Citgo’s parent company case, as you’ll see in the story below.

What nerve this guy has to go to the trough yet again in Delaware, where he knows the fix is in! Why else would he have the brass ones to ask for more money than all the parties involved have agreed on?! Well, why not?! He’s on the inside of a fixed system where he and his judge buddies all hang out at the country club, play tennis, go golfing and likely figure out how to pay for new pools and their kids’ educations over drinks — that’s the Delaware Way! And now others are getting screwed in addition to TransPerfect. Who will be next?!

Once again, shamefully, the rich are getting richer and the poor workers at these companies are paying for it with lower salaries, healthcare benefits and bonuses. This money has to come from somewhere and you can bet it’s coming out of the pockets of employees to pay for the Rolls Royces of people like Pincus and Andre Bouchard and their Skadden and Chancery Court buddies.

Read the dreadful story below. Pincus is at it again. Send your feedback on this, my friends. Your comments are welcome and appreciated.

Respectfully Yours,
JUDSON Bennett–Coastal Network

Special Master Targeted In Fight Over Fees For Citgo Sale
By Caroline Simson

Law360 (September 8, 2021, 10:00 PM EDT) — The special master overseeing the sale of Citgo’s parent company has become embroiled in a dispute over fees that exceed a $2 million cap, marking at least the second time that the retired Skadden partner has raised eyebrows over fees incurred while overseeing a court-ordered sales process.

The parties involved in the dispute — including Venezuela, its state-owned oil company PDVSA, ConocoPhillips and Crystallex — have sent letters filed under seal in recent weeks objecting to court-appointed special master Robert B. Pincus’ request that a Delaware district court judge allow him to exceed the $2 million fee cap the judge set earlier this year.

Pincus, a former mergers and acquisitions partner of Skadden Arps Slate Meagher & Flom LLP who retired from the firm in late 2018, was officially appointed to the special master position by U.S. District Judge Leonard P. Stark in May to oversee the sale of PDVSA’s shares in PDV Holding Inc., the indirect parent of U.S. petroleum company, as part of Canadian company Crystallex’s efforts to enforce a $1.2 billion arbitral award against Venezuela. He had been one of the candidates put forward by Venezuela, PDVSA, PDV Holding, Citgo and ConocoPhillips.

In a public version of an Aug. 30 letter penned by Pincus that was posted to the docket on Tuesday, Pincus defended his requested fees and noted that the parties had understood that those fees might exceed the $2 million cap. As a result, Judge Stark included a mechanism to adjust the fee cap upward when Pincus was appointed back in May, according to the letter.

“My mandate already has been an extraordinarily complex and difficult endeavor on many levels,” Pincus told Judge Stark. “One need only read my report to understand that, and I am confident that all of the interested parties appreciate that our task has been a difficult and complex one just to get to this stage.”

Pincus, who submitted proposed sale procedures for the PDV Holding shares to the court on Aug. 9 that remain under seal, nevertheless agreed to reduce the fees being sought by him and his advisers for the month of July by a combined $75,000, with the caveat that he “hesitate[d]” to offer the concession for fear of making it appear that the reduction is warranted or of establishing a pattern for every time a party objects to his fees.

Counsel for Citgo and PDV Holding declined to comment. Counsel for Pincus and the other parties could not immediately be reached for comment.

The dispute marks at least the second time that Pincus has been targeted over his fees, although in the previous situation, involving global translation company TransPerfect, he emerged mostly on top. Earlier this year, another judge in Delaware ordered TransPerfect and co-founder Philip Shawe to pay Pincus, who had been appointed custodian to sell the company in 2015, fees and expenses totaling more than $3.2 million.

TransPerfect and Shawe had attacked Pincus’ fee petitions “in every way imaginable,” now-retired Delaware Chancellor Andre G. Bouchard wrote in the April 30 opinion, filing three rounds of objections that took issue with “with virtually every time entry in the fee petitions,” including a motion accusing Pincus of bad faith over certain categories of expenses.

The judge denied TransPerfect and Shawe’s contempt, preclusion and bad faith motions against Pincus, although he sustained certain objections they had raised and shaved some $420,000 off the fees and expenses that Pincus said he was owed.

In the Crystallex case, meanwhile, a redacted version of an Aug. 25 letter penned by Citgo, PDV Holding, PDVSA and Venezuela, which appeared in the public docket on Sept. 1, reveals that they had asked Judge Stark to reject Pincus’ fee request over the $2 million cap and to require him to seek advance approval before submitting any further requests to exceed the cap.

In addition, they asked the court to require Pincus to provide a “satisfactory explanation as to what extraordinary, unforeseen reasons made it impossible to stay within the court’s ordered limit,” and to consult with the parties and ConocoPhillips regarding any expansion of the fee cap and provide a plan to “rein in costs and establish more certainty that any new fee cap will not be exceeded.”

In a follow-up letter dated Sept. 1 that was made public on Wednesday, they complained that Pincus had “failed to address the thrust of [their] objection to his July fee request” in his Aug. 30 response and argued that the “generous sum” of $2 million “appears to have been treated as an estimate or proposed budget rather than as a cap.”

“Of course, as the special master noted … the May 27 order provides a mechanism for the special master to petition the court to exceed the cap, but presumably only upon a showing that there was a diligent effort to stay within the cap and that some unforeseeable, extraordinary event has made it impossible to stay within that limit,” they continued. “The special master has done none of those things and has made no attempt to justify the twenty-seven lawyers that have billed an extraordinary amount of time to this matter.”

Crystallex won its award in April 2016 after an international tribunal concluded that Venezuela breached its investment treaty with Canada by wrongfully ousting the company from an operating contract for the Las Cristinas mine, which contains one of the world’s largest undeveloped gold deposits. The award was confirmed by a D.C. federal court in March 2017.

In an order issued in January, Judge Stark denied Venezuela’s motion to quash an attachment order for the PDV Holding shares that he issued to Crystallex some three years ago in light of the “extraordinary” circumstances relating to an ongoing power struggle between Venezuelan President Nicolás Maduro and opposition leader Juan Guaidó, saying that it would be “inequitable” to permit the Venezuelan government to continue evading payment on what it owes.

ConocoPhillips, which is owed some $2 billion by Venezuela after the country nationalized two of its onshore extra-heavy oil projects without compensation in 2007, has also taken an interest in the case since Citgo is considered Venezuela’s most significant U.S. asset.

Crystallex is represented by Travis S. Hunter, Jeffrey L. Moyer and Raymond J. DiCamillo of Richards Layton & Finger PA and Robert L. Weigel, Rahim Moloo, Miguel A. Estrada, Lucas C. Townsend and Jason W. Myatt of Gibson Dunn & Crutcher LLP.

Citgo Petroleum Corp. and PDV Holding Inc. are represented by Kenneth J. Nachbar and Alexandra M. Cumings of Morris Nichols Arsht & Tunnell LLP and Nathan P. Eimer, Lisa S. Meyer, Daniel D. Birk and Gregory M. Schweizer of Eimer Stahl LLP.

PDVSA is represented by Samuel T. Hirzel II of Heyman Enerio Gattuso & Hirzel LLP and Joseph D. Pizzurro and Julia B. Mosse of Curtis Mallet-Prevost Colt & Mosle LLP.

Venezuela is represented by Donald B. Verrilli Jr., George M. Garvey, Elaine J. Goldenberg, Ginger D. Anders, Brendan B. Gants and Jacobus P. van der Ven of Munger Tolles & Olson LLP and A. Thompson Bayliss and Stephen C. Childs of Abrams Bayliss LLP.

Pincus is represented by Myron T. Steele, Alan Richard Silverstein, Abraham C. Schneider and Matthew Foulger Davis of Potter Anderson & Corroon LLP and by Alexander W. Welch and Jason Hufendick of Weil Gotshal & Manges LLP.

The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, case number 1:17-mc-00151, in the U.S. District Court for the District of Delaware.

–Editing by Jay Jackson Jr.