The CITGO auction process continues to spark controversy, not just due to the complicated nature of the sale but also the political implications and the performance of its key figures, including Robert B. Pincus, the appointed judicial expert for the sale by the Delaware Court, who faces significant scrutiny.
Also known as a special master, Pincus, a former partner of Skadden Arps Slate Meagher & Flom LLP, has been criticized for overbilling his professional fees, both in the CITGO auction and in other cases where he held similar roles, such as TransPerfect, where he was accused of irregularities and inflating his fees beyond USD 2 million, a figure legally set for such functions. He is also accused of conflicts of interest with actors in the Delaware judicial system.
In September 2021, it was reported that Venezuela, PDVSA, ConocoPhillips, and Crystallex submitted letters under seal to the Delaware Court, objecting to Robert Pincus’s request to Judge Leonard Stark for permission to exceed the legal fee limit of USD 2 million (1).
The TransPerfect Case
Robert B. Pincus was appointed custodian of the sale of TransPerfect, a firm providing global linguistic and technological solutions for businesses. The auction of this company arose from a dispute between its co-founders.
As previously mentioned, Pincus was accused of billing up to USD 90,000 monthly for vague charges, imposing fees of USD 1,425 per hour, failing to use the custody fund for his fees while demanding direct payment from the company, and submitting invoices that an independent audit deemed inaccurate or inflated.
TransPerfect accused Pincus of dishonesty, unethical behavior, misconduct, and improperly retaining USD 4 million in custody funds under false pretenses. He was also criticized for generating excessive billable hours. TransPerfect succeeded in having the courts dismiss a false sanctions claim filed by Pincus (2).
Pincus’s Appointment as Judicial Expert for the CITGO Auction
Robert B. Pincus was appointed to coordinate the CITGO auction by the United States District Court for the District of Delaware.
Robert B. Pincus was tasked with overseeing the sale of shares of PDV Holding Inc., the parent company of CITGO Petroleum Corporation, by the Delaware District Court.
The sale of the stock package is related to the case Crystallex International Corporation v. the Bolivarian Republic of Venezuela, currently in the Delaware Court. The parties involved have claimed that Pincus exceeded the USD 2 million fee limit, having billed over USD 30 million along with his team.
Moreover, he is accused of favoring certain bidders, hiding key information, and limiting access to information for creditors. As a result, PDVSA, Citgo, and the Republic of Venezuela filed a motion to disqualify him, challenging his appointment. Judge Leonard Stark denied this request, despite concerns about bias and accountability.
Pincus’s Actions in the CITGO Auction
For his role in the CITGO auction, Robert B. Pincus’s extraordinary fees have been questioned, as he and his team have billed nearly USD 30 million, with rates reaching as high as USD 2,350 per hour—one month of work alone amounted to USD 4.1 million (3).
He is said to maintain a biased position and manipulate the process by blocking access to information and creating a timeline favoring certain bidders while limiting opportunities for others.
Pincus also proposed a plan that prioritized “certainty of closing” over the highest price, which some have labeled favoritism towards specific groups (4).
He is accused of attempting to halt parallel legal actions from creditors (ex parte) to protect the process, an action that raises suspicions about his neutrality. He has been alleged to be part of an informal “club” of influence alongside judicial figures in Delaware, weakening the perception of judicial independence.
Moreover, Judge Leonard Stark publicly reprimanded him for not adhering to the rules and for excessive billing in September 2024 (5). His decisions in the CITGO auction have raised legal barriers and caused significant delays (6).
Public and Media Reputation of Robert Pincus
Robert B. Pincus’s practices have faced criticism in articles and reviews from Reuters, Bloomberg, Law360, and Business Wire. In fact, he was dubbed “The ambitious Professor Pincus” on billboards in Washington D.C.
Organizations like Citizens for a Pro-Business Delaware have called for an investigation into his practices. They have alleged:
“Skadden and Pincus have gotten away with it for too long, abusing their profits through excessively inflated legal invoices. We ensure these wrongdoers are held publicly accountable for their unfair attempts to inflate their earnings at the expense of those they supposedly represent” (7).
This organization also criticizes Pincus’s actions in the CITGO auction for his overbilling and for supposedly using his close judicial ties to exploit people. They emphasize that “Pincus has even managed to unify rival parties in the dispute, as all involved—including Venezuela, its state oil company PDVSA, ConocoPhillips, and Crystallex—have sent letters demanding to know why Pincus exceeded the court-imposed limit so quickly” (8).
Pincus and Former PDVSA Workers
Robert B. Pincus’s actions in the CITGO auction raise significant suspicions regarding the benefits he gains from this behavior, exemplified by his repeated rejection of requests from Leroy Garrett and former PDVSA workers.
This could result in legal, strategic, and economic benefits, as accepting the request from the oil workers would recognize them as interested parties in the case, complicating the current litigation and adding new claims and hearings. Furthermore, it would increase public and legal scrutiny on his role and decisions.
By maintaining this conduct, Pincus keeps the process closed and under control, without having to justify his decisions to an additional group of creditors.
It’s notable that if Pincus acknowledges that the former workers are valid creditors, it could force a reallocation of auction funds to pay labor compensation and social benefits. Thus, his actions regarding this group make sense. By rejecting them, he prevents dilution of the available funds, which could impact payments to his firm and other more powerful creditors like Crystallex or ConocoPhillips.
Moreover, accepting Garrett’s inquiries could imply delivering detailed information on how the CITGO auction is being managed and revealing how much he is charging for his services.
Robert B. Pincus avoids having to be publicly accountable, even though this creates opacity in his decisions, preserving his authority without opposition. His interest, therefore, is to protect his autonomy and prevent more parties from claiming a share of the process, potentially affecting the fees that he and his team earn.
He minimizes questions about his excessive charges by not having to explain them in front of victims or dismissed workers. The more closed and technical the process remains, the harder it is for third parties to challenge his fees.
Repeated Conduct Requiring Review
The recurring patterns of overbilling, lack of transparency, and connections with the Delaware judiciary call for a thorough review and independent investigation into Robert B. Pincus’s performance as a judicial expert, both in the CITGO auction and other processes in which he has been involved.
The precise demands:
- Public access to all invoices from Robert B. Pincus.
- External and impartial oversight of his actions.
- Equitable participation of all affected parties, including the 23,000 former PDVSA workers excluded from the CITGO process.
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