Siemens Energy Inc. has initiated legal proceedings against PDV Holding, the parent company of Citgo Petroleum, in a Texas court, aiming to recover approximately $200 million stemming from a default on a promissory note linked to Venezuela. This development was revealed in court documents obtained on Wednesday.
As creditors seek to recover billions of dollars from Citgo’s auctioned shares in a Delaware court—related to past expropriations and debt defaults in Venezuela—many are exploring additional legal avenues in U.S. courts to reinforce their claims. This strategy aims to secure priority access to any funds generated from the auction.
The second round of bidding for Citgo’s shares concluded last month, resulting in an affiliate of Elliott Investment Management being named the winner. If U.S. Judge Leonard Stark approves the $7.3 billion bid, it is anticipated that the available funds will fall significantly short of covering the over $21 billion in creditor claims awaiting resolution in court.
Citgo and PDV Holding operate as U.S. subsidiaries of the Venezuelan state oil company, Petróleos de Venezuela, S.A. (PDVSA). The conflict between PDVSA and Siemens originates from a transaction in which Dresser-Rand Company—acquired by Siemens Energy—was entitled to receive around $166 million through the promissory note.
According to Siemens’ court filing, the company secured a judgment against PDVSA in the Southern District of New York and is now seeking to hold PDV Holding accountable as PDVSA’s alter ego for the total judgment amount, which currently exceeds $200 million.
Additionally, the Gramercy Distressed Opportunity Fund, along with two affiliated entities, has filed comparable lawsuits in Texas and New York this year, which could potentially hinder the ongoing auction in Delaware that is expected to conclude in the coming months.
In response to these developments, a court officer overseeing the auction has requested Judge Stark to prevent creditors from pursuing the same assets in other courts. A ruling on this request is currently pending.
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