There is a long, tortous story behind a series of bonds colloquially known as the “Bandagro bonds.”
I don’t know the details very well, but the outline is the following: billions of dollars of Venezuelan bonds were bought by investors in the US; the Venezuelan government had long held that the bonds were forged, and the buyers were conned; Chavez Prosecutor General Marisol Plaza (pictured right) brilliantly wrote a legal brief saying they were legit; Chavez fired Marisol Plaza and got his new Prosecutor General to say they were not legit; US investors filed a lawsuit in federal court, a federal judge ruled in their favor, and now the Sixth Circuit Court of Appeals has unanimously upheld that ruling.
The bottom line for Chavez? Well, if nothing else happens, Venezuela needs to pay $8 billion, or else see their US assets taken over. The New York Post is already suggesting gobbling up Citgos all over the US.
This is worth keeping an eye on, but from the looks of it, Chavez is in deep doo-doo on this one.
(Hat tip: La ceiba)
Update: Setty gives me a veritable spanking for citing the NY Post, says the issue is not that serious yet. And much as I try, I can’t find the so-called unanimous decision cited by the New York Post on the Court of Appeals website. I guess that’s the last time I’m citing the NY Post. Lesson learned.