A U.S. court of appeals on Friday rejected Venezuela's bid to prevent six companies from joining a proposed court auction of shares in a Citgo Petroleum parent to enforce judgments for past expropriation of assets.
The decision allows the six to move ahead with their about $3 billion in combined claims against Venezuela state oil firm PDVSA in a Delaware federal court. That court is in the initial steps of preparing an auction as soon as September.
"For the second time in five years, we conclude that PDVSA is the alter ego of Venezuela, and we will affirm the District Court's denial of sovereign immunity to PDVSA," the three judge panel ruled. It also declined to consider PDVSA's request to bar the attachments from the district court case.
The companies had won conditional attachments to a federal case in which the judge has approved a process to auction the shares to pay a $970 million judgment won by miner Crystallex.
Since March, creditors including a unit of O-I Glass (OI.N), Huntington Ingalls Industries (HII.N), ACL1 Investments, Koch Minerals and mining firms Rusoro Mining (RML.V) and Gold Reserve (GRZ.V), have been granted rights to seize shares in the parent of Venezuela-owned refiner Citgo, PDV Holding.
