Toronto-listed Gold Reserve (GRZ.V) on Friday said it had filed motions to disqualify a court officer and the judge overseeing the sale of shares in the parent of Venezuela-owned Citgo Petroleum and two advisory firms involved in the sale process.
According to Reuters, the filings are the latest move in a long-running dispute over a high-profile auction of shares in PDV Holding, a unit of Venezuela’s state oil company PDVSA.
One of 15 creditors seeking repayment of billions in defaults and expropriations in Venezuela, Gold Reserve has been in a legal battle over the way the Delaware court has handled the auction process.
Conflict over auction recommendations
The miner had resisted in court attempts to have rival bidder Amber Energy, an affiliate of Elliott Investment Management, declared the winner of a $5.9 billion bid.
The $7.9-billion bid by Gold Reserve, recommended in August, should have gotten preferential treatment, the company argues.
Gold Reserve, in motions it filed, sought to highlight apparent conflicts of interest by principal participants in the proceedings.
The company is seeking the removal of Judge Leonard Stark and court officer Robert Pincus, who first backed Gold Reserve’s bid but subsequently changed his tune to support Elliott’s Amber Energy.
Gold Reserve also filed a motion requesting that all decisions regarding the bidding process be stayed pending resolution of the disqualification matters.
In a statement, Gold Reserve said the company is asking for full transparency on these matters for its shareholders.
Adviser relationships under scrutiny
The firm’s filings go beyond just court personnel. Gold Reserve is aiming at two advisers: Weil, Gotshal & Manges and Evercore (EVR.N), which have helped the court assess the bids.
Gold Reserve argues that Weil must be disqualified over an alleged conflict of interest, asserting the law firm represented Elliott during the Citgo sale process as well.
The miner also claimed both Weil and Evercore have continuing relationships with some bondholders who might profit under Elliott’s bid structure.
The company’s release included no comment from either Weil or Evercore, and both declined to comment when contacted.
Parallel motions by Venezuelan representatives
The dispute over conflicts of interest has widened. In September, lawyers representing Venezuela sought to suspend a key sale hearing, citing concerns about Weil’s role.
However, Judge Stark denied that request, allowing the process to continue.
Gold Reserve’s latest filings—submitted under seal on Thursday—mirror those concerns.
The Venezuelan parties have also filed their own motions to disqualify Pincus, Weil, and Evercore, intensifying the pressure on the Delaware court to address the allegations before proceeding with the sale.
Upcoming hearing and next steps
Judge Leonard Stark will hold a hearing on October 21 to weigh the motions and try to untangle the conflicts that have followed Pincus’s recommendation change.
We are awaiting a final decision on the auction result from the judge following the hearing.
The stakes are still high for Gold Reserve.
Its attempt to reverse the court’s guidance and resurrect its $7.9 billion offer highlights wider legal worries about both fairness and transparency in one of the priciest asset sell-offs linked to Venezuela’s protracted international debt battles.
Creditors and the Venezuelan government will be waiting to see what happens leading up to the hearing in October, a decision that may dictate not only how ownership will be divided, but also how billions in proceeds will be divided among the competing claimants.
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