Background - Crystallex, a Canadian miner, obtained a $1.202 billion arbitration award against Venezuela after Venezuela expropriated Crystallex’s Las Cristinas mining rights. - Venezuela owns PDVSA (state oil company), which owns PDV Holding, which owns CITGO Holding, which owns CITGO Petroleum; PDVSA and Venezuela are alleged alter egos. - To repatriate value and shield assets from creditors, Venezuela/PDVSA allegedly orchestrated debt issuances and dividend transfers that resulted in roughly $2.8 billion being moved from U.S. subsidiaries (via PDV Holding) to PDVSA in Venezuela. - Crystallex sued PDV Holding in Delaware federal court under the Delaware Uniform Fraudulent Transfer Act (DUFTA), alleging the transfers were fraudulent and intended to hinder creditors. - The District Court denied PDV Holding’s 12(b)(6) motion to dismiss, concluding the transfers were made “by a debtor” under DUFTA; PDV Holding obtained interlocutory review. - The Third Circuit majority reverses, holding DUFTA requires the transfer to be made by the debtor itself and Delaware precedent forecloses liability for non-debtor transferors or for aiding-and-abetting/conspiracy claims under DUFTA. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---:|---| | Whether a transfer by a non-debtor can be a "fraudulent transfer" under DUFTA | The dividend by PDV Holding effectuated on Venezuela/PDVSA’s behalf is an indirect transfer “by a debtor” and so actionable | DUFTA requires the transfer to be made by the debtor itself; PDV Holding is a non-debtor transferor so claim fails | Held: No — DUFTA requires a transfer "by a debtor"; non-debtor transferor liability is not supported by Delaware law | | Whether DUFTA permits liability on aiding-and-abetting or conspiracy theories against non-principal actors | The statute’s equitable breadth and dictionary meaning of "by" support holding facilitators liable | Delaware precedent rejects aiding-and-abetting or conspiracy causes of action under DUFTA | Held: No — Delaware courts foreclose non-principal liability theories under DUFTA | | Whether statutory provisions (e.g., §1307(c), §1308) imply non-debtor liability | Such provisions (and Remedies section) allow relief against bad-faith non-debtors and equitable remedies permit tailoring relief | Those provisions do not create affirmative claims against non-debtors; Delaware jurisprudence does not support expansion | Held: Court declines to expand DUFTA statutory scope; §1307(c)/§1308 do not authorize broad non-debtor liability | | Whether out-of-jurisdiction decisions and dictionary definitions compel a broader reading | Plaintiff cites other jurisdictions and dictionary definitions to show “by” includes agency/instrumentality | Majority: those authorities are nonbinding and Delaware precedent controls; dictionary use cannot override state-law interpretation | Held: Not persuasive; must predict Delaware courts which have limited DUFTA to debtors/transferees | ### Key Cases Cited Crystallex Int’l Corp. v. Bolivarian Rep. of Venez., 244 F. Supp. 3d 100 (D.D.C. 2017) (arbitral award and district-court confirmation of judgment against Venezuela) Sheridan v. NGK Metals Corp., 609 F.3d 239 (3d Cir. 2010) (circuit’s Erie-role discussion in diversity cases) In re Energy Future Holdings Corp., 842 F.3d 247 (3d Cir. 2016) (predicting state-law answers where state high court silent) Trenwick Am. Litig. Tr. v. Ernst & Young, L.L.P., 906 A.2d 168 (Del. Ch. 2006) (Delaware Chancery Court: fraudulent-transfer statutes do not create aiding-and-abetting claims) Quadrant Structured Prods. Co. v. Vertin, 102 A.3d 155 (Del. Ch. 2014) (Delaware Chancery Court: conspiracy cannot be predicated on fraudulent transfer) In re Trace Int’l Holdings, Inc., 287 B.R. 98 (Bankr. S.D.N.Y. 2002) (observing DUFTA and Bankruptcy Code fraudulent-transfer provisions are substantially similar) * In re PHP Healthcare Corp., 128 F. App’x 839 (3d Cir. 2005) (noting Delaware UFTA and federal fraudulent-transfer law are substantially the same)