Gold Reserve Vows Appeal as Court Backs Elliott's $5.9B Citgo Bid
The decision advances the sale of the Venezuelan-owned refiner but sidelines Gold Reserve's own higher offer, setting the stage for a fresh legal challenge.
A U.S. federal court has approved a nearly $5.9 billion bid from an affiliate of Elliott Investment Management for control of Citgo Petroleum's parent company, a pivotal moment in the long-running auction to settle claims against Venezuela. The decision, however, was immediately met with opposition from Gold Reserve Inc., another major creditor that saw its own higher bid rejected and has pledged to appeal.
Shares of Gold Reserve (OTC: GDRZF) fell 1.43% in trading on Tuesday following the announcement, closing at $1.38. The dip came after a more than 21% rally on Monday, suggesting investors had anticipated a different outcome in the high-stakes legal battle.
On Tuesday, U.S. District Judge Leonard Stark in Wilmington, Delaware, formally adopted a special master's recommendation to select the $5.89 billion offer from Amber Energy, an Elliott affiliate. The ruling moves the court-ordered sale of Venezuela's most valuable foreign asset closer to a conclusion after years of litigation. In his decision, the judge described the auction as a fair process, with the Amber bid representing the "best overall combination of price and certainty of closing," according to reports from Bloomberg Law.
The auction of shares in PDV Holding, Citgo's indirect parent, was designed to satisfy billions of dollars in claims from numerous companies whose assets were expropriated by Venezuela. Gold Reserve holds one of the largest claims, stemming from the seizure of its gold mining project over a decade ago.
The central point of contention is Gold Reserve's own fully-financed bid of $7.9 billion, which was turned down in favor of the lower offer from Elliott. In a sharply worded press release, Gold Reserve stated its disagreement with the judgment and confirmed its intent to "pursue all available appellate remedies and other avenues for relief." The company had previously filed motions to disqualify the court-appointed special master and advisory firms, which the court dismissed on November 17.
The court's decision marks a significant milestone in a complex and politically charged process. The sale of Citgo, a major U.S. refiner with operations centered on the Gulf Coast, has drawn intense interest from energy firms and investment funds seeking to acquire a strategic American asset. Amber Energy's proposal reportedly includes a plan to address defaulted Venezuelan bonds that are collateralized with Citgo equity, a move seen as clearing a key hurdle to finalizing a transaction.
Despite the court's backing of the Elliott bid, the process is not yet complete. Judge Stark has allowed other parties to submit final objections until November 28 before a final sale order is issued. Furthermore, any transaction requires ultimate approval from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), adding a layer of regulatory and geopolitical uncertainty.
For Gold Reserve and other creditors, the ruling is a mixed blessing. While it moves the process closer to a payout, the selection of a lower bid reduces the total potential recovery pool for all claimants. The impending appeal from Gold Reserve threatens to add further delays to a legal saga that has already spanned the better part of a decade. Should the current offer receive final approval, a takeover of Citgo could potentially be completed in the first half of 2026, as noted by legal analysts at Law360.