The CITGO auction process continues, with various parties involved taking actions to meet their interests. One of the parties, ConocoPhillips and its subsidiary companies, has voluntarily dismissed the lawsuit that had been filed against those identified as “alter ego defendants” since October 2024.
The defendants include Girard Street Investment Holdings LLC, G&A Strategic Investments I LLC, G&A Strategic Investments II LLC, G&A Strategic Investments III LLC, G&A Strategic Investments IV LLC, G&A Strategic Investments V LLC, G&A Strategic Investments VI LLC, G&A Strategic Investments VII LLC, Gramercy Distressed Opportunity Fund LLC, and Siemens Energy Inc.
ConocoPhillips sought a declaration that PDV Holding Inc. (PDVH) is not subject to reverse veil piercing claims that could allow creditors of Petróleos de Venezuela S.A. (PDVSA) to access PDVH’s interest in Citgo Holding Inc.
In addition, ConocoPhillips was demanding garnishment orders against Citgo Holding’s shares in favor of all additional judgment creditors within the priority order previously established by the Court in the Crystallex International Corp. case against the Bolivarian Republic of Venezuela, where it holds a preferential position.
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Case Closed
On January 27, 2025, the United States District Court for the District of Delaware ordered the termination of civil case 24-1140-LPS due to the voluntary dismissal filed by ConocoPhillips Hamaca B.V., ConocoPhillips Petrozuata B.V., ConocoPhillips Golfo de Paria B.V., and Phillips Petroleum Company Venezuela Limited.
As a result, the presiding judge, Judge Leonard P. Stark, declared the case closed.
Voluntary Dismissal
On January 3, 2025, ConocoPhillips voluntarily withdrew the lawsuit against all defendants, an action that was taken without prejudice, meaning the plaintiff could file the same lawsuit in the future.
ConocoPhillips had initially filed a lawsuit in the Delaware District Court against several entities, including Girard Street Investment Holdings LLC, Siemens Energy, the Bolivarian Republic of Venezuela, and Petróleos de Venezuela in October 2024.
The Initial Lawsuit
Judge Leonard P. Stark declared the case closed
On October 14, 2024, ConocoPhillips and its subsidiaries Conocophillips Petrozuata B.V., Conocophillips Golfo de Paria B.V., Phillips Petroleum Company Venezuela Limited, and Conocophillips Hamaca B.V. filed a lawsuit in the District Court of Delaware against Girard Street Investment Holdings LLC, G&A Strategic Investments I LLC, G&A Strategic Investments II LLC, G&A Strategic Investments III LLC, G&A Strategic Investments IV LLC, G&A Strategic Investments V LLC, G&A Strategic Investments VI LLC, G&A Strategic Investments VII LLC, Gramercy Distressed Opportunity Fund LLC, and Siemens Energy Inc. seeking a judicial declaration to prevent these creditors, known as “Alter Ego Defendants” —also creditors of PDVSA or the Bolivarian Republic of Venezuela— from using the legal figure of “reverse veil piercing” against PDV Holding Inc. (PDVH).
Like in other cases, the defendants are trying to enforce their claims directly against PDVH, arguing that it is an “alter ego” of PDVSA or Venezuela. Under this premise, they seek to access the assets of Citgo Holding, thus circumventing the priority order established in the sale of PDVH’s shares supervised by the Court in the Crystallex case.
According to ConocoPhillips, there is an ongoing sale process, namely the CITGO auction, to satisfy debts, making reverse veil piercing unnecessary. Furthermore, ConocoPhillips requested that should the veil be lifted, its rights to garnish Citgo Holding’s shares owned by PDVH be respected, following the already established priority order.
The Delaware Court oversees the CITGO auction in the Crystallex case with the aim of satisfying the debts of PDVSA and Venezuela . ConocoPhillips, along with the alter ego defendants and other creditors, is part of this process as “additional judgment creditors”.
The court established a priority order for creditors who obtained garnishments on PDVH’s shares, and ConocoPhillips holds positions in this order. The alter ego defendants, except for Siemens, were not declared as additional judgment creditors within the timeframe established in the Crystallex case.
Unsatisfied, the mentioned alter ego defendants have attempted lawsuits in other jurisdictions, such as New York and Texas, aiming to establish that PDVH is an “alter ego” of PDVSA to directly garnish Citgo Holding’s shares or establish claims against PDVH that would survive the sale, effectively circumventing the established priority order.