Siemens Energy Inc Files Lawsuit Against Citgo's Parent for $200 Million Default - Latest Update
In a recent development, Siemens Energy Inc has taken legal action against Citgo Petroleum's parent company, PDV Holding, in a Texas court to recover approximately $200 million from a defaulted promissory note by Venezuela. This move comes as creditors involved in an auction of Citgo parent's shares in a Delaware court are seeking to enforce their claims in other U.S. courts to secure priority in receiving proceeds from the auction.
The auction's second bidding round concluded last month, with an affiliate of Elliott Investment Management emerging as the winner with a $7.3 billion offer. However, given the $21 billion in creditor claims before the court, there may not be sufficient funds to satisfy all claims.
Siemens Energy's dispute with PDV Holding stems from a transaction involving Dresser-Rand Company, now a part of Siemens Energy, which was supposed to receive $166 million according to a promissory note. Following a judgment against PDVSA in the Southern District of New York, Siemens Energy is now pursuing PDV Holding for the full amount, which exceeds $200 million.
Gramercy Distressed Opportunity Fund and two affiliated companies have also initiated similar lawsuits in Texas and New York courts, potentially disrupting the ongoing auction in Delaware. A court officer overseeing the auction has requested a block on creditors from pursuing the same assets in other courts, with a decision pending from U.S. Judge Leonard Stark.
This legal battle and auction proceedings could have significant implications for Citgo, PDV Holding, and creditors involved. It highlights the complexities of international financial disputes and the challenges faced by companies operating in politically volatile environments. Investors and stakeholders should closely monitor these developments as they unfold to assess potential risks and opportunities in the market.