The parties from Venezuela, namely the Bolivarian Republic of Venezuela, PDV Holding Inc., and CITGO Petroleum Corporation, have filed a motion with the U.S. District Court for the District of Delaware, requesting a 21-day extension to the deadline for CITGO’s auction.
This request is supported by the decision made on May 20, 2025, by the judge of the U.S. District Court for the Southern District of New York, who granted summary judgment in favor of PDVH and PDVSA in the “alter ego” cases and dismissed the claims based on this against PDVH. For the Venezuelan parties, this ruling is crucial in the CITGO auction process.
The dismissal of the “alter ego” cases significantly shifts the process by removing a major uncertainty in the auction, and thus justifies extending the deadline to facilitate a fairer bidding process with potentially higher value.
Venezuela Challenges Expert Witness Conduct
Venezuela, PDV Holding, Inc., and CITGO Petroleum Corp. have notified the court about their attempts to consult with the Expert Witness regarding a motion to extend the bidding period for the sale process.
They explain that on May 22, 2025, CITGO and PDVH—followed by Venezuela and PDVSA—sent a letter to the Expert Witness’s attorney requesting permission from the court to extend the deadline for CITGO’s auction to comply with the order from May 20.
This request was denied by the Expert Witness on May 23, 2025, but they indicated that the Venezuelan parties could appeal to the court for this measure if they felt justified. Venezuela argues that there is a valid cause to extend the mentioned deadline.
They contend that the court has wide discretion in managing its cases and that the recent judicial decision is an external factor justifying the extension of the bidding period, allowing bidders to reassess their offers.
Arguments of the Motion
The Venezuelan parties believe that the summary judgment issued by the New York Court constitutes an external factor justifying the extension of the reduction period.
They reminded the court that, in September 2024, the Expert Witness indicated that the “alter ego” cases “threatened to inhibit the Expert Witness’s ability to close a sale transaction that maximized value and fulfilled its mandate.”
Furthermore, they cited that Evercore informed the court that “bidders had expressed concerns to the Expert Witness and their Advisors about the risks” posed by the alter ego cases, and they had “insecurity” about whether the actions of PDVH would be “diminished by the judgments of the alter ego claimants.”
Crystallex and ConocoPhillips also noted that if the alter ego cases succeeded, the actions of PDVH under the court’s custody might become void.
ConocoPhillips argued that, consequently, the actions of PDVH could become unsellable, and no bidder can responsibly invest billions of dollars in purchasing them if any court can issue a judgment imposing all the debts of PDVSA and Venezuela on the acquired company.
Effects of the Summary Judgment
The Venezuelan parties believe that the summary judgment favoring PDVH and PDVSA on May 20, 2025, by Judge Rakoff in the consolidated alter ego cases of Girard Street Investment Holdings LLC against PDV Holding Inc. and G&A Strategic Investments I LLC, et al against Petróleos de Venezuela S.A., dismisses the alter ego claims against PDVH.
They indicate that the decision is described as the removal of a “cloud of uncertainty” that has affected the bidding process since at least June 2024.
The extension would allow bidders or potential bidders to consider the elimination of this uncertainty and the impact of the ruling. The intention is to give the judge time to issue a written opinion, allowing for an analysis of how developments in the alter ego cases affect bids.
This would also enable the Special Expert to work on increasing offers in light of the decision on May 20.
The Venezuelan parties emphasize that the current period of five business days after Judge Rakoff’s ruling is insufficient for presenting competitive proposals. Therefore, they are requesting that the Superior Bid Period be extended by at least twenty-one days, so the New York court judge can provide a written ruling.
This is a vital pronouncement for potential superior bidders to analyze how the evolution of the alter ego cases could impact their offers.
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