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.
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.
Citgo and Crystallex could not be immediately reached for comment.
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.
By Elliott Blackburn
