A U.S. judge said bondholders have valid claims over Venezuela’s prized oil refiner Citgo Petroleum Corp., dealing a blow to the country’s U.S.-backed opposition leaders and putting the company at heightened risk of a forced takeover, WSJ Pro Bankruptcy reported. Bondholders are entitled to seize and sell the controlling stake in Citgo that Venezuela pledged to them as collateral in a 2016 debt deal, U.S. District Judge Katherine Polk Failla in New York ruled Friday. No such sale can occur under current U.S. sanctions on Venezuela, though bondholders have been lobbying the Trump administration for an exemption that would permit them to foreclose on the company. Investors and multinational companies trying to collect debts from Venezuela have long been circling Citgo, viewing it as a promising way to get repaid despite the country’s economic meltdown. As a Houston-based company, Citgo is the only meaningful asset belonging to Venezuela they can reach through the U.S. court system.
