Siemens Energy Inc has filed a lawsuit in a Texas court against Citgo Petroleum’s parent company, PDV Holding, seeking to recover approximately $200 million from a promissory note that Venezuela defaulted on.
This lawsuit emerged as creditors involved in an auction of Citgo’s parent shares in Delaware begin turning to other U.S. courts to enforce their claims, aiming to secure priority in the distribution of the auction’s proceeds.
Last month, the auction’s second bidding round concluded, with an affiliate of Elliott Investment Management emerging as the winner. If U.S. Judge Leonard Stark ratifies the $7.3 billion offer, the available funds may not suffice to cover more than a few of the $21 billion in creditor claims pending before the court.
Citgo and PDV Holding operate as U.S. subsidiaries of the Caracas-based state oil firm PDVSA.
The dispute between PDVSA and Siemens traces back to a transaction involving Dresser-Rand Company, an engineering firm acquired by Siemens Energy, which was entitled to about $166 million under a promissory note.
In its filing, Siemens stated, “SEI obtained a judgment against PDVSA from the Southern District of New York and now seeks to hold PDV Holding liable as PDVSA’s alter ego for the full amount of the judgment, which now exceeds $200 million.”
This year, Gramercy Distressed Opportunity Fund and two affiliated companies have also filed similar lawsuits in Texas and New York, potentially jeopardizing the Delaware auction set to conclude in the coming months.
A court officer overseeing the auction has requested Judge Stark to block the creditors from pursuing the same assets in other courts. His decision on this matter remains pending.
