• Court officer defends recommendation of Amber's bid
• Amber needs sale order by early December to preserve pact with bondholders
• Venezuela, Gold Reserve say risk linked to bondholders' claim is not worth $2 billion
• Delaware judge expected to select a winner after court hearing

HOUSTON, Oct 21 (Reuters) - Bidders pursuing the parent of Venezuela-owned U.S. refiner Citgo Petroleum and creditors waiting to cash proceeds from the court-ordered auction clashed in Delaware on Tuesday over which offer should be approved as the clock ticks to move the process towards a takeover.

Following three bidding rounds, the court is trying to complete the auction to compensate up to 15 creditors for debt defaults and expropriations in Venezuela. Citgo's parent PDV Holding was found liable for the South American country's debt as part of the eight-year case.

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Lawyers representing Citgo and Venezuela asked the court in a hearing to reject a $5.9 billion bid from an affiliate of Elliott Investment Management due to its "low price," which was below a $7.9 billion rival offer from a subsidiary of Gold Reserve (GRZ.V) , opens new tab, and said the sale process was "defective."

The bid from Elliott's affiliate Amber Energy was recommended in August by an officer overseeing the auction, a switch from his previous support for Gold Reserve's offer. Objections and challenges have prevented the court from pushing forward the sale process in recent months.

A counsel for court officer Robert Pincus said the court conducted "the broadest marketing process of any asset ever."

He also said Amber's bid implies a business value of about $9.5 billion and provides the best combination of price and likelihood of transaction completion.

Amber's offer includes a side pact to pay $2.1 billion to holders of a defaulted Venezuelan bond. Because the agreement is only valid through early December, Amber, Pincus and some creditors are pressing the court to soon select a winner.

"We are here not to overburden the court, but as a supplicant and to ask for the court to be mindful of that date," said Andrew Rossman, counsel for Amber.

If the recommended offer does not materialize, a new pact with the bondholders or even re-bidding could be necessary, advisers and lawyers have said. A counsel for the holders said they would stick to the Amber agreement's terms for now.

OBSTACLES IN THE ROAD

Delaware Judge Leonard Stark this week heard arguments about motions by Venezuela and Gold Reserve to disqualify him, court officer Pincus and two advising firms over alleged conflict of interest.

Final arguments over the bids were also presented to the court.

Amber's bid "is so low ... that it shocks the conscience of this court and can't be confirmed," Nathan Eimer, counsel for Citgo and PDV Holding, said during the hearing.

Gold Reserve also asked the court to reject Amber's bid and approve the offer submitted by its subsidiary instead, which is about $2 billion higher in price but does not include an agreement to pay the Venezuelan bondholders.

Gold Reserve's bid intends to distribute auction proceeds among a larger number of creditors in Delaware, instead of settling the bondholders' claim, which is pending a final resolution over the notes' validity in a separate New York case.

"It would be a fundamental injustice in the event a substantial amount of value was diverted from the attached judgment creditors here to the 2020 bondholders on the basis of a security, a pledge instrument that might be deemed invalid," said Matthew Kirtland, counsel for Gold Reserve.

Both Venezuelan President Nicolas Maduro and the opposition reject the auction. The U.S. Treasury Department, which has shielded Citgo from creditors in recent years, must approve the auction's winner.

https://www.reuters.com/legal/litigation/venezuela-asks-us-court-reject-elliott-affiliates-bid-citgo-parent-2025-10-21/