US Supreme Court denies Citgo ruling challenge: Update
Adds comment from Guaido government.
A key decision exposing US independent refiner Citgo to Venezuela's debts will stand, setting the stage for a potential share sale to satisfy billions of dollars in assets expropriated by previous Venezuelan governments.
The US Supreme Court will not hear Venezuela's challenge to a 2018 District Court of Delaware decision that open up a wave of copycat litigation imperiling Venezuelan control of one of its most valuable overseas assets.
Citgo did not respond to a request for comment. Crystallex did not comment.
Venezuela appealed a US Third Circuit Court of Appeals decision upholding that Citgo operated as an effective alter-ego of its government. The decision, first won in 2018 in the Delaware court, pierced the paper shield of its US corporate structure and left Citgo vulnerable to the country's more than $150bn in debts.
Former Canadian mining firm Crystallex had persuaded the Delaware court of the lack of separation. More than a dozen companies, bondholders and other entities have since filed lawsuits in various US courts to seize Venezuela's US assets.
Venezuela fought the decision, first under president Nicolas Maduro and last year at the direction of Juan Guaido, the US-recognized head of the country's National Assembly. US courts adopted that recognition, dropping the opposition leader into a losing battle for one of Venezuela's most valuable overseas assets and the only entity his shadow government controls.
The Delaware court in December paused Crystallex and US independent producer ConocoPhillips' efforts to set the stage for a potential sale of Citgo shares. That work risked damaging the refiner in the pursuit of a sale that might never come, the judge determined.
Crystallex and Venezuela's many other creditors must still also wait for the executive branch to allow any sale to move forward. The Department of Treasury clarified in late November that US sanctions on Venezuela and the Maduro government prohibited any enforcement of judicial or arbitration decisions without a lifting of sanctions or an executive order. A separate, specific license also prevents bondholders from taking over the US refiner. The US last month extended that license into July.
Guaido's US ambassador, Carlos Vecchio, cited the sanctions in a statement on the court decision.
"The situation that Citgo is facing is the consequence of the irresponsible behavior and procedures of the Maduro and Chavez regimes," Vecchio said. "We will continue defending the patrimony of Venezuela."
By Elliott Blackburn
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