U.S. Judge Backs Elliott Affiliate in Citgo Auction, Limits Rival Gold Reserve

A U.S. judge has allowed Amber Energy, an affiliate of Elliott Investment Management, to advance its $5.9 billion bid for Citgo Petroleum’s parent company, PDV Holding, while restricting rival bidder Gold Reserve from doing the same. The ruling came after a four-day sale hearing in Delaware, where creditors of Venezuela sought progress in recovering billions from debt defaults and expropriations.

Judge Leonard Stark instructed a court officer to end a stock purchase agreement with Gold Reserve’s subsidiary, Dalinar Energy, and instead execute one with Amber. The agreement is a key step in the court-ordered auction process, allowing frontrunners to secure financing and complete regulatory approvals.

Amber’s offer has been considered stronger because it includes a separate $2.1 billion commitment to pay holders of defaulted Venezuelan bonds backed by Citgo shares. Dalinar’s proposal lacked a similar provision, making Amber the favored bidder among the 15 Venezuela-linked creditors pursuing claims.

Although Judge Stark has not declared a final winner, he rejected Gold Reserve’s motion to disqualify Amber’s bid. Gold Reserve said the decision was delivered orally, and a written ruling will follow.

Meanwhile, a New York judge upheld the validity of PDVSA’s 2020 bonds, which were collateralized with Citgo equity. This ruling bolsters bondholders’ claims and further strengthens Amber’s position in the auction.

The outcome of the auction remains uncertain, but the Delaware court’s recommendation positions Elliott’s Amber Energy as the frontrunner in one of the most high-profile legal battles over Venezuela’s assets abroad.