Title: US Appeals Court Allows Creditors to Sue Citgo as Venezuela’s Offer Rejected
Date: [Insert Date]
Source: Reuters
A recent ruling by a US appeals court has upheld the rights of creditors to sue Citgo after the company rejected Venezuela’s offer, according to a report published by Reuters. The decision comes as the Pdvsa subsidiary sought to prevent six companies from participating in a proposed judicial auction of shares in its parent company, Citgo Petroleum, in order to enforce previous expropriation judgments.
The court’s ruling now clears the path for the plaintiffs to proceed with their combined claims totaling approximately $3 billion against Citgo in a Delaware federal court. The court is currently in the early stages of preparing for an auction scheduled for September.
In a significant development, the source cited that “For the second time in five years, we conclude that PDVSA is the alter ego of Venezuela.” This finding was made by a three-judge panel that also refused PDVSA’s request to exclude foreclosures from the district court case. The companies had previously obtained conditional foreclosures in a federal case, which approved the auction process to pay off a $970 million judgment in favor of the Crystallex mining company.
Since March, six plaintiffs, including Owens-Illinois Glass unit, Huntington Ingalls Industries, ACL1 Investments, Koch Minerals, Rusoro Mining, and Gold Reserve, have been seeking the right to seize shares of Citgo’s parent company, PDV Holding. The plaintiffs are taking aggressive legal actions to execute embargoes on the subsidiary.
Back in September 2019, the Delaware Court of Appeals for the Third Circuit had reversed the stay of the foreclosure proceeding on the shares of PDV Holding Inc., a commercial company domiciled in Delaware and owned by PDVSA, which in turn holds the shares of Citgo.
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