It's not their fault, it's those nasty politicians and their friends in the private sector. Petrobras is the poor, gentle giant that funds Brazilian movie studios and wildlife conservation programs. They were pillaged and ransacked by pirates, hands up, with no one to save them.

Tell it to the judge.

In 2015, after the fall of Petrobras' first female CEO, Maria das Gracas Foster, Brazilian president Dilma Rousseff appointed Banco do Brasil chief executive Aldemir Bendine to clean house. The market liked Bendine. He was seen as someone who could lower Petrobras' overhead. He immediately went to work announcing voluntary layoffs upwards of 12,000 strong. He permitted asset sales long held sacred by the unions that voted Dilma's Workers' Party into power four times in a row. Only problem was that Bendine kept on with the same agenda as those who came before him, federal prosecutors believe.

According to Marcelo Odebrecht, the namesake CEO of the company that bears his surname, Odebrecht was receiving money from and handing money to Bendine as recently as 2015. It's a sad discovery for what is actually a good company. Unless Odebrecht is lying through his teeth, then Bendine continued with similar schemes, perhaps on a much smaller scale, during the height of the Petrobras investigation that saw a sitting president removed from office, and key politicians and executives like Marcelo jailed for many years.

Bendine received three payments of R$1 million, or around $800,000 in total, over a two year period, Marcelo Odebrecht reportedly told prosecutors. 

Bendine denies the allegations. A judge ordered an investigation in June.

"Bendine reinforces the idea that this sort of corruption is institutional at Petrobras and was not the work of a few bad seeds at the top," says Jeremy Lieberman, the lead attorney representing Petrobras shareholders at Pomerantz in New York. The suit alleges that Petrobras mispriced its asset values due to the corruption scandal, which saw companies like Odebrecht, OAS, Camargo Correa andothers paying bribes to politicians for lucrative public works contracts with the state-run oil company. Petrobras colluded in the scheme by over pricing numerous projects and purchases, such as the Pasadena Refining System in south Texas. Money often went to various politicians in the process, helping to fund campaigns, buy real estate, and fill Swiss bank accounts.

It is estimated that the scandal took place over the course of a 10 year period, with the ruling Workers' Party at the helm.

Brazilians voted the party out of power in gubernatorial races last October, and Dilma was removed from office following a Senate impeachment trial last August.

Petrobras had roughly 25 securities fraud cases filed against it, with some large fund companies like Vanguardand PIMCO ultimately settling with Petrobras out of court.

This week, Brazil's Audit Court, known as TCU, found that former president Sergio Gabrielli, who preceded Gracas Foster, was responsible for overpaying for the Pasadena refinery. His assets were blocked last week, in fact. This opens Gabrielli up to further lawsuits by U.S. investors.

Last September, Petrobras lawyers successfully appealed a hearing in the Second District Court in New York slated for that month. They appealed on a technical matter, one that defined the class of shareholders that could sue, and over which type of security.

Now that the definitions have been clarified, Petrobras will either have to face the second circuit court following a one-year hiatus, or make an application to the U.S. Supreme Court for a motion to stay proceedings.

"I think they will try to go to the Supreme Court. We'll know this week, I think," Lieberman says. "If you go to trial, you're looking at the possibility of over ten billion dollars in damages. A critical blow to them. Going to the Supreme Court is a stalling tactic," he says.

The Supreme Court generally takes about 2% of the cases that go to it, but because this is a high profile securities fraud case, there is a greater chance that Petrobras will get its review. If they do, the Pomerantz case in particular will be on hold until next July.