By Marianna Parraga
HOUSTON (Reuters) -Toronto-listed Gold Reserve said on Friday it has filed motions to disqualify a court officer and the judge overseeing an auction of shares in the parent of Venezuela-owned Citgo Petroleum, as well as two firms advising the Delaware court.
The miner has been trying to prevent the court from declaring a $5.9 billion bid by rival Amber Energy, an affiliate of hedge fund Elliott Investment Management, as the auction’s winner since its own $7.9 billion bid was not recommended in August.
Gold Reserve is one of 15 creditors lining up to cash proceeds from the auction of shares in PDV Holding, a unit of Venezuelan state oil company PDVSA, as compensation for debt defaults and expropriations in Venezuela.
GOLD RESERVE ALLEGES CONFLICTS OF INTEREST
Gold Reserve has also requested a temporary stay of all decisions concerning any bids submitted in the sale process pending resolution of its disqualification motion.
“Gold Reserve is seeking full transparency on these issues for its shareholders,” it said in a release.
The company is seeking to disqualify the Delaware judge overseeing the case, Leonard Stark, as well as court officer Robert Pincus, who switched his recommendation of the auction’s winner to Elliott’s Amber from Gold Reserve.
Reuters could not immediately reach Stark for comment. A counsel for Pincus did not immediately respond to a request for comment.
Lawyers representing Venezuela had requested in September the suspension of an important sale hearing due to an alleged conflict of interest involving advising firm Weil, Gotshal & Manges. But Stark denied the motion.
Gold Reserve is now requesting Weil be disqualified over an allegation it had been representing Elliott while the Citgo sale process was ongoing.
The miner also said that Weil and Evercore, which is helping the court evaluate the bids, have ongoing relationships with some bondholders that could receive auction proceeds under Elliott’s bid.
Weil and Evercore did not immediately reply to requests for comment.
The motions were filed under seal on Thursday, with the Venezuelan parties also filing motions to disqualify Pincus, Weil and Evercore.
Judge Stark has set a court hearing for October 21 to listen to the parties over the conflicts that have emerged since Pincus switched his recommendation. He is expected to issue a final ruling on the winner after that.
(Reporting by Marianna Parraga; Editing by Mark Potter and Joe Bavier)
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