A federal judge ordered that Venezuela’s stake in oil refiner Citgo Petroleum Corp. be put up for sale to satisfy creditors, calling the country’s nonpayment an affront while acknowledging that no auction can occur under current U.S. sanctions, the Wall Street Journal reported. Judge Leonard Stark of the U.S. District Court in Wilmington, Del., said that Venezuela’s shares in Citgo’s parent company should be positioned for sale “to the extent possible.” No such sale can occur under rules promulgated by the Trump administration that restrict transfers of Venezuelan state property. Judge Stark nonetheless said that he would appoint a special master to map out a sale process, granting a request by Crystallex International Corp., a defunct Canadian mining enterprise that partnered with Venezuela on a gold project that was nationalized in 2011. Crystallex went bankrupt as a result and has been trying to collect its lost investment from Venezuela ever since, targeting Citgo. Other Venezuela creditors owed large debts are also circling the oil company. Judge Stark said that each day Crystallex’s roughly $1 billion judgment goes unpaid is “arguably something of an affront” to the U.S. judicial system. The judge also laid out a rough framework for auctioning Venezuela’s shares of Citgo parent PDV Holding Inc. to the highest bidder, including a requirement that financial disclosures about the asset be made available to serious bidders. Crystallex has applied with the U.S. Treasury Department for a license that would allow the shares to be sold, according to court papers. A decision on the license application likely falls to the incoming Biden administration.
