Firm Secures Victory for Syracuse Mountains Corporation in Breach of Contract Case

July 20, 2023 - HHR obtained a default judgment for more than $450 million in favor of Syracuse Mountains Corporation against the Bolivarian Republic of Venezuela in a breach of contract case regarding eleven series of bonds issued by the country in 1997, 1998 and 2001.

Upon issuing the bonds, Venezuela unconditionally promised to make regularly scheduled principal payments to the holders of the bonds – including Syracuse – under fiscal agency agreements governed by New York law. In October 2017, the country stopped making interest payments.

As stipulated by the bond agreements and the U.S. Foreign Sovereign Immunities Act, Syracuse attempted to serve the summons and complaint on Venezuela’s consul general – or, if the consul general was absent, any official of the Consulate of Venezuela. However, the country had recently admitted in another litigation that “the Consul General has been recalled, the Consulate has been closed, and no replacement process agent has been appointed.” The only method of service available against Venezuela was through diplomatic channels.

On May 21, 2021, the Clerk of Court mailed all of Syracuse’s required pleadings to the U.S. Department of State, which took nine months to effect service on the country. Venezuela did not send a response, which was due on April 11, 2022.

On May 3, 2022, Mike DeBernardis, on behalf of Syracuse, asked the U.S. District Court for the Southern District of New York to forego allowing Venezuela the opportunity to show cause, and to instead make its decision once the company established its right to relief, due to the “substantial burden and delay associated with serving [Venezuela] through diplomatic channels.”

This month, with still no word from Venezuela, the court ordered a default judgment in favor of Syracuse.

DeBernardis led the HHR team representing Syracuse, which included Dan Weiner, Carter Rosekrans and Shayda Vance.