Accusations of Conflict and Bias Rejected
The challengers alleged that Pincus and his advisers were compromised due to their connections with Elliott Investment Management, whose $5.892 billion bid for PDV Holding received Pincus’ endorsement. They also pointed to millions in fees paid to Weil Gotshal, which represents bondholders owed nearly $3 billion by Venezuela, known as the 2020 bondholders — entities that hold a 50.1% interest in Citgo Holding.
But Judge Stark was unmoved. He wrote that the transparency of the sale process “eliminated opportunities for mischief,” calling claims of favoritism toward Elliott “selective and unconvincing.” He also dismissed Gold Reserve’s claim of actual bias, reaffirming that no reasonable observer could question the court’s impartiality.
A “Daunting Task” and High Stakes
Judge Stark defended the necessity of appointing qualified legal and financial advisers, noting that excluding every entity with prior business ties “would undermine, if not entirely defeat, the court’s goal to maximize value.”
He observed that these advisers “inevitably have precisely the types of entanglements” that the movants claimed were disqualifying. He further noted that Venezuela and its allies sought failure, as they feared a favorable ruling for Elliott over Gold Reserve’s higher $7.382 billion offer, which was initially recommended but later withdrawn.
