Home-Stake Production Co. v. Talon Petroleum

907 F.2d 1012, 116 B.R. 1012, 17 Fed. R. Serv. 3d 910, 1990 U.S. App. LEXIS 11361
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 9, 1990
DocketNo. 88-2451
StatusPublished
Cited by11 cases

This text of 907 F.2d 1012 (Home-Stake Production Co. v. Talon Petroleum) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Home-Stake Production Co. v. Talon Petroleum, 907 F.2d 1012, 116 B.R. 1012, 17 Fed. R. Serv. 3d 910, 1990 U.S. App. LEXIS 11361 (10th Cir. 1990).

Opinion

LOGAN, Circuit Judge.

The appeal in this diversity action arises out of an effort to hold liable for the debt of three defunct corporations the individual who allegedly was their alter ego and other corporations allegedly bearing the same alter ego relationship to the individual defendant. This appeal challenges the district court’s entry of a preliminary injunction restraining the transfer of real property owned by some of the latter corporations in the United States. The appellants urge this court to dissolve the preliminary injunction and dismiss the action for lack of personal jurisdiction. We dissolve the injunction and dismiss the action with respect to all appellants except Rafael Tudela.

I Facts

In the early 1970s, Home-Stake Production Company (Home-Stake) was engaged in two programs to develop and operate oil properties in Venezuela. Under Venezuelan law, title to oil rights or “concessions” had to be held by Venezuelan companies. Accordingly, Home-Stake acquired a controlling interest in Talon Petroleum, C.A., a Venezuelan corporation. Home-Stake organized two corporations to exploit the concessions owned by Talon, the 1970 Program Operating Corporation and the 1971 Program Operating Corporation. Home-Stake sold various units of participation in the 1970 and 1971 programs to third-party investors (Participants). The two program operating companies entered into a joint venture with Talon to operate and develop the latter’s Venezuelan oil properties. Home-Stake owned eighty-nine percent of Talon’s stock.

In 1973, Home-Stake instituted reorganization proceedings in the Bankruptcy Court for the Northern District of Oklahoma. In February 1974, the Bankruptcy Court approved the sale of Home-Stake’s Venezuelan assets, including its stock in Talon, to a Venezuelan company, Hidrocarburos y Der-ivados, C.A. (Hideca). Hideca’s performance under the terms of the sale contract was guaranteed by a Cayman Islands corporation, Hideca Oil International (Hideca Oil). Both companies were represented by Rafael Tudela at hearings before the Bankruptcy Court before its approval of the sale. Tudela represented that he was the chief executive officer and the major shareholder of Hideca and Hideca Oil.

A Supplemental Order setting forth the terms of the sale was executed in June 1974. Under this order, Talon assumed operating responsibility for the 1970 and 1971 programs, and became obligated to pay the Home-Stake Trustee (the Trustee) on behalf of the Participants in those programs a portion of the proceeds of the sale of oil occurring after February 16, 1974, from properties in the programs. Talon also became obligated to pay the Trustee for the Participants’ benefit a portion of any indemnification award paid to Talon from the Venezuelan government in the event of nationalization of the oil industry. By agreement of the parties, any action against Talon, Hideca or Hideca Oil for failure to comply with the Supplemental Order could be brought in federal court in the Northern District of Oklahoma.

The Venezuelan petroleum industry was nationalized in August 1975, effective December 31 of that year. The Venezuelan government paid Talon a nationalization award of approximately $4.7 million. No portion of this award reached the Trustee, however, who in 1977, acting on the Participants’ behalf, applied to the bankruptcy court for an order directing Talon to account for the nationalization award and for its operation of the Venezuelan properties. The Trustee also sought an order finding Rafael Tudela and Talon’s president, Nicholas Becks, in contempt for failing to comply with the Supplemental Order. The bankruptcy court entered judgment against Talon in favor of the Participants for $1,690,113.55. The judgment was later amended to hold Hideca and Hideca Oil jointly liable in the same amount. This judgment was affirmed by the district court and, ultimately, by this court. Talon Petroleum, C.A. v. Home-Stake Prod’n Co., No. 84-1117 (10th Cir. May 15, 1986).

The Trustee filed the instant action on December 18, 1986, to collect the judgment. He named as defendants the three judg[1015]*1015ment debtor corporations; Rafael Tudela and his brother Alberto Tudela; Hideca U.S.A., Inc., Romichan Corporation, L.W., Inc., Laudmar, Inc. and Lunelco, Inc., all Delaware corporations; Multi-Development Corporation, a Florida corporation; Raul J. Valdes-Fauli, an individual, as Trustee for Multi-Development and Romi-chan; and Venrest Investment Corporation, N.V., and Karenwood International, N.V., both Netherlands Antilles corporations.1

The Trustee alleged that the judgment debtor corporations “no longer exist, or if they exist, they are dormant corporations with no assets.” I R. tab 1 at ¶ 4. He sought a declaration that all of the defendant corporations, including the judgment debtors, were instrumentalities of the Tudelas, and that the corporate entity of each of these defendants should be disregarded because the corporations are simply alter egos of the Tudelas created to defraud legitimate creditors such as Home-Stake.

The Trustee further alleged that certain of the defendants, specifically Hideca U.S.A., Valdes-Fauli, Multi-Development, Romichan, L.W., Laudmar, Lunelco, and Alberto Tudela, own real property within the United States. Additionally, he charged that Banque Worms, S.A., a French banking corporation, has in its possession approximately $10,000,000 which Karenwood is claiming in pending litigation in the Southern District of New York. The complaint prayed for a temporary restraining order and a preliminary injunction restraining transfer of any of this property without court approval and deposit of all proceeds of any court-approved transfer with the clerk of the court. The injunction was necessary, the Trustee urged, to prevent the defendants from selling the property and transferring the proceeds beyond the court’s jurisdiction, thereby “effectively depriving] Home-Stake of the ability to collect any judgment which this court may ultimately render against the defendants.” I R. tab 1 at ¶ 12. The temporary restraining order was entered that day and a hearing on the request for a preliminary injunction was set for December 29, 1986. The Trustee was required to serve all defendants with notice of this hearing in any manner authorized by law. For reasons not here relevant, the hearing was rescheduled for January 23, 1987.

At the preliminary injunction hearing, L.W., Laudmar, Lunelco, Hideca U.S.A., Romichan, Karenwood, and Venrest (hereinafter collectively referred to as the “corporate defendants”), as well as Valdes-Fauli, were represented by counsel. The remaining defendants did not appear. The plaintiffs chief witness, Alvaro Sardi, upon whose affidavit and testimony the district court had relied in part in entering the temporary restraining order, did not appear. His affidavit and prior testimony, however, were admitted by stipulation of the parties for purposes of the preliminary injunction hearing only. Based on this and other evidence presented by both sides at the hearing, the court granted the preliminary injunction on January 30, 1987. It filed findings of fact and conclusions of law on February 19, 1987.

On February 10, Rafael and Alberto Tudela made their first appearances in the case. Ultimately, all of the defendants submitted motions to dismiss for lack of personal jurisdiction, as well as motions to the court to reconsider its findings of fact and conclusions of law and to vacate the preliminary injunction.

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Home-Stake Production Company v. Talon Petroleum
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Bluebook (online)
907 F.2d 1012, 116 B.R. 1012, 17 Fed. R. Serv. 3d 910, 1990 U.S. App. LEXIS 11361, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-stake-production-co-v-talon-petroleum-ca10-1990.