4 issuesThis is completely my take based only on publicly-available materials. GRZ faces four main issues.
(1) Alter-ego claims (Gramercy). I don't see how this can be a serious risk and I think that's how the creditors see it. Though PDVH is 100% owned by PDVSA, it is (unlike PDVSA) a US company subject to US laws. Unlike the actual PDVSA, PDVH is controlled by the opposition and has an opposition- chosen board of directors. I realize the opposition may speak for PDVSA in the US through its ad hoc board but the actual PDVSA, the one that is the alter ego of the Venezuelan government (and 100% under Maduro's thumb), is the PDVSA that has actual operations across Venezuela.
(2) 2020 bonds. GRZ and Rusoro have written to the Court that they see the risk of these having a valid claim on Citgo as being "remote." I don't know what their evidence and argument will be but I don't think they'd call that risk "remote" unless they knew what they were talking about. And the 2020 bondholders HAVE lost four court cases in a row. (I would not want to be owning those bonds.)
(3) The Canada Revenue Agency (CRA). Here's my theory. GRZ now has a Bermuda incorporation, a Bermuda HQ, three new Bermuda directors who are knowledgable in the ways of Bermuda, a recent Bermuda AGM, and I would imagine they will put all their money in a Bermuda bank. If the CRA sticks with their anti-common sense claim that GRZ owed tax on their entire ICSID award in 2014 then GRZ will go to a Bermuda court and nicely ask the court if it could protect this Bermuda company from the vindictive monsters at the CRA who are trying to destroy GRZ's business. GRZ will make a reasonable offer to the CRA. The CRA will eventually be reasonable.
(4) The value of Citgo (independent of issues (1) and (2)). It isn't helping that refining spreads have been very weak over the past few months. I have no illusions about Citgo currently being worth $11-14 billion. But as long as it goes for about $7.3 billion or higher then GRZ will get its $1.1 billion award in full. GRZ's range in the creditor waterfall (Xmas tree?) is roughly $5.8 billion through $6.9 billion. Add the payoff to the SM and a few other things and $7.3 billion should be enough. Note that Citgo has roughly $3.5 billion in liquidity on its balance sheet. Note also the Elliott first bid was $7.3 billion. It included a holdback for the 2020 bond risk--but that's a risk the creditors appear to see as "remote."