ST. CROIX – Hess Corporation is attempting to get the lawsuit the VI government filed against the company – a lawsuit seeking more than $1.5 billion in damages – moved into United States Bankruptcy Court.The Fortune 500
Company moved the claim from VI Superior Court to United States District Court on Friday.Hess then instantly asked a federal judge to refer the case to Bankruptcy Court, where Hess competes the federal governments claim belongs.In the claim, the VI federal government declares Hess breached the law and its contracts with the government over the course of years and illegally shut down the HOVENSA refinery.In saying to have actually the case transferred to bankruptcy court, Hess contends that the federal governments suit is associated with HOVENSAs bankruptcy; that HOVENSA has the greatest exposure in the suit; which the case might affect HOVENSAs estate. HOVENSA is presently in the middle of Chapter 11 bankruptcy proceedings.A judge has actually not yet ruled on the matter.HOVENSA is a joint endeavor between Hess Oil Virgin Islands Corp., a wholly had
subsidiary of Hess Corporation, and PDVSA VI
, a completely had subsidiary of the national oil business of Venezuela, Petroleos de Venezuela.The VI federal government took legal action against Hess-and not HOVENSA – in the case it submitted in VI Superior Court in September, declaring civil violations of the Criminally Influenced
and Corrupt Organizations Act, in addition to deliberate interference with existing legal relations and counts that allege deceitful inducement and deceptive non-disclosure, deceit and concealment.Among the claims allegations is that Hess controlled HOVENSA-and that Hess siphoned off more than$1 billion in HOVENSA possessions and burdened HOVENSA with unsustainable operating expensesoperating costs. The government asserts that Hess broke
the law when it shuttered the HOVENSA oil refinery almost a decade prior to its legal obligations to the federal government were complete.On Monday, lawyers said the VI Government plans to submit a movement asking a judge to send out the case right back to VI Superior Court.Obviously, we believe we are handling infractions of regional law, and wed want to have the case keep in the Superior Court of the Virgin
Islands, acting VI LawyerChief law officer Claude Walker said.Hess puts forward numerous arguments in its filings, including that HOVENSA has higher direct exposure in the suit, although Hess is the called defendant.Hess notes that HOVENSA in its Limited Liability Corporation operating arrangement indemnifies Hess from any damages that might arise from the business operation- in other words, HOVENSA takes on the responsibility to pay the damages.Therefore, Hess argues, the outcome of the case could have an instant effecteffect on HOVENSAs bankruptcy estate and must be referred to the bankruptcy division.However, the indemnification stipulation in the HOVENSA LLC operating contract does not apply to damages that stem from actions or omissions that make up bad faith, fraud, deliberate violation of law or intentional misbehavior or a material breach- which is exactly what the VI federal government is alleging in the lawsuit.Hess likewise contends that even if the case is not described the bankruptcy department, it still should remain in US District Court rather than Superior
Court. Hess points out these 2 factors:-The 1965 Concession Contract between Hess and the territory-which the Legislature made into law when it validated the agreement-provided the US District Court jurisdiction over litigation including disputes developing out of the contract. That arrangement has actually been extended in later agreements.-The United States District Court kept jurisdiction to presidecommand conflicts including the 2011 authorization decree between HOVENSA, the US Environmental Security AgencyEpa and the VI government.In its claim, the VI federal government challenges the approval decree, competing that Hess worked out the permission decree for HOVENSA, causing HOVENSA to agreeaccept difficult terms for Hess benefit. The fit alleges that the approval decree -with its$700 million in agreed-upon improvements-cleared the way for Hess to convert the refinery to an oil storage facility.The suit also argues that Hess and HOVIC had no intent of making the$700 million in enhancements, due to the fact that Hess intended to shut down the refinery and compel its conversion into an oil storage terminal.Hess competes the federal governments claim challenges the fundamental legality of the approval decree, which it states is precisely the type of dispute over which the District Court must preside.The VI government will respond and intends to keep the case in VI Superior Court, Walker said.We believe our case is really strong and they are making a number of fanciful and unique arguments to combat this, which is to be anticipated, Walker said. But in the end we will prevail.
-Contact Pleasure Blackburn at 714-9145 or email jblackburn@dailynews.vi.