Gold Reserve Ltd V.GRZ

Court 2023-07-27 decision

[mrmoribund]

This is most interesting. Paragraph 2 is what you want to look at.

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The Delaware Court further held that the priority of judgments of Additional Judgment Creditors will be based on the date a Creditor filed a motion for a writ of attachment that was subsequently granted. The Company filed its motion on October 20, 2022. According to public records, there are 10 judgments for which writs of attachment have been granted and for which the motions were filed before the Company’s motion. These judgments, according to the Delaware Court’s present order, represent an aggregate principal amount of U.S. $4.684 billion, exclusive of interest.

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Citgo is generally accepted to have a value in the range of US$10-12 billion.

So if GRZ's press release is correct--and I'm sure it is--then the most reasonable conclusion is that the CITGO sale process will lead to GRZ being paid IN FULL. The entire US$1 billion. (Whatever they get will of course be somewhat reduced by related expenses--including some chunks of the ICSID award that were long ago committed to some private equity vultures, I think.)

Until today I never imagined there was a realistic chance of this happening. I thought the best hope was something like 50%. Essentially, $20 billion in claims going after $10 billion.

I'm a bit confused about Conoco's place in all this. I thought they had $12 billion in claims here. My best guess is that the $12 billion is in different chunks and only a small fraction of that $12 billion is covered by their valid writ of attachment(s).

Will be interesting to see what GRZ does if Venezuela offers to "settle" by restoring the situation with Siembra Minera. I can't imagine GRZ would just leave $1 billion from CITGO on the table in order to return to the 2021 status quo. No one, especially the people at GRZ, could be that naive.

[agtavy]

The bulk of Conoco's claims is in another suit. I hope GRZ doesn't settle, especially if Siembra is part of the payout. That'll probably take 5 years to build and a billion dollars or more to finance.   I hope GRZ management is as fatigued as I am. What bothers me about today's press release is that the company is opening the door to some deal. They better not be

[fishowl]

Thanks agtavy for providing the link to 33 page court document related this case. I also have trouble with the legaleese, but the document does cover the 7 steps mentioned to make claim to the award so that’s useful. GRZ has completed step 5 in the process.   1. A creditor proves it is owed some debt by a Venezuela Party. 2. The creditor enforces its award in a U.S. court and receives a

[steamfitter]

Based on the number of shares outstanding and the possibility of receiving 1 billion dollars. What would that represent per share 

[agtavy]

With approximate 100 million shares, $1 billion would theoretically gross about $10 per share.  The $1 billion will be taxed.  The employee bonus plan (around $50 million) and holders of the CVRs are next in line.  There is an unresolved dispute between the company and the CVR holders. See below. We have Contingent Value Rights ("CVRs") outstanding that entitle the