Venezuela’s state-owned oil company should be stopped from plundering its U.S. subsidiary Citgo Holding Inc., according to court papers filed on Monday evening by a creditor seeking $1.4 billion from the South American country, the Wall Street Journal reported today. Canadian mining company Crystallex International Corp. asked a Delaware federal judge for an injunction blocking Petróleos de Venezuela SA (PdVSA) from taking cash or transferring assets from Citgo, the U.S. crude refiner owned by PdVSA. Crystallex asked the judge to stop PdVSA from “making any transfers, or otherwise alienating, transferring, encumbering or diminishing its assets, directly or indirectly” for anything less than fair consideration. The injunction request adds to mounting legal and financial pressures on PdVSA, the major economic engine in recession-ravaged Venezuela, at a time when investors are growing more skeptical the country can service its debts much longer. Venezuela and PdVSA together owe approximately $8 billion of debt coming due this year and another $7.9 billion next year.
