By Marianna Parraga
HOUSTON (Reuters) – A Delaware court is inclined to deny a motion made last month by miner Gold Reserve to disqualify a rival bid for the parent of Venezuela-owned refiner Citgo Petroleum from an affiliate of hedge fund Elliott Investment Management, Judge Leonard Stark said in a filing on Wednesday.
The court is set to begin the final sale hearing next week in the court-organized auction of shares aimed to pay creditors for past expropriations and debt defaults by Venezuela.
The hearing will follow the preliminary selection last month of a $5.9 billion bid from Elliott’s affiliate Amber Energy as the best offer submitted in the auction so far. The choice triggered objections from several parties and Gold Reserve’s motion to strike.
A competing bid from Gold Reserve’s affiliate Dalinar Energy was not recommended by the court officer overseeing the auction, even after it was raised to $7.9 billion last month.
Gold Reserve, lawyers representing Venezuela and other creditors have submitted objections to Amber’s bid, saying an included agreement to pay $2.1 billion to holders of a defaulted Venezuelan bond would deprive some creditors in Delaware of auction proceeds.
Parties to attend the hearing were encouraged “to focus instead on the merits of the Amber Energy bid, the objections to it and the Dalinar bid,” the judge said in the filing.
In the 4-day hearing, to begin on Monday, creditors, witnesses and experts will expose arguments supporting or objecting to bids on the table. A second set of testimonies could be presented in October, the court said.
(Reporting by Marianna Parraga; Editing by Nathan Crooks and David Gregorio)
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