Siemens Files Lawsuit in Texas Against Citgo Petroleum Parent, According to Reuters

By Marianna Parraga

HOUSTON (Reuters) – Siemens Energy Inc has initiated a legal action in a Texas court against Citgo Petroleum’s parent company, PDV Holding, in an effort to recover approximately $200 million resulting from a default on a promissory note by Venezuela, as stated in a court document reviewed on Wednesday.

Creditors involved in an auction for Citgo’s parent’s shares in a Delaware court—aimed at recovering billions owed due to expropriations and debt defaults linked to Venezuela—are now seeking recourse in other U.S. courts to enforce their claims. This strategy is designed to secure priority regarding the distribution of any funds from the auction’s proceeds.

The second round of bidding in the auction concluded last month, with an affiliate of Elliott Investment Management being selected as the winner. Should the judge approve the $7.3 billion bid, it is anticipated that there may not be enough funds to satisfy more than a few of the $21 billion in creditor claims before the court.

Citgo and PDV Holding operate as U.S. subsidiaries of the state oil firm PDVSA, headquartered in Caracas. The conflict between PDVSA and Siemens stems from a prior transaction where the engineering firm Dresser-Rand Company, which Siemens Energy acquired, was set to receive approximately $166 million under a promissory note.

"Siemens Energy obtained a judgment against PDVSA from the Southern District of New York and is now seeking to hold PDV Holding accountable as PDVSA’s alter ego for the full judgment amount, which now exceeds $200 million," the document from Siemens detailed.

Additionally, Gramercy Distressed Opportunity Fund and two related entities have filed similar lawsuits in courts in Texas and New York this year, posing a potential threat to the auction in Delaware, which is expected to finalize in the coming months.

A court officer overseeing the auction has requested that U.S. Judge Leonard Stark prohibit the creditors from pursuing similar actions in other courts regarding the same assets. A decision on this request is pending.