UK gold bars and gold Sovereign coins are displayed at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. REUTERS/Hiba Kola

By Marianna Parraga

HOUSTON (Reuters) -Toronto-listed miner Gold Reserve on Monday accused firms advising a U.S. court on the auction of Citgo Petroleum's parent of receiving some $170 million in fees from a bidder that was recommended as the winner of the process and parties that would obtain proceeds as a result.

The auction of Venezuela-owned PDV Holding, parent of Houston-based refiner Citgo Petroleum, aims to compensate up to 15 creditors for debt defaults and expropriations in the South American country.

The accusations are the latest twist in a process that has dragged on for nearly two years after three bidding rounds, and could threaten to slow it further before a final winner is selected.

A Delaware court found PDV Holding liable for Venezuela's debts, including assets expropriated by the administration of the country's late president, Hugo Chavez, and billions of dollars in bonds defaulted on by state-owned oil company PDVSA.

The court on Monday discussed the fees in a hearing following Gold Reserve's motions earlier this month to disqualify a court officer and the judge overseeing the auction, in addition to advising firms Weil, Gotshal & Manges, and Evercore over the alleged conflict of interest.

"Normal folks would reasonably question the impartiality of advisers who have received $170 million in fees from the very party whose bids they are evaluating in an auction process," Michael Bowe, counsel for Gold Reserve, told the court.

Court officer Robert Pincus in August switched his recommendation for the auction's winner to Elliott Investment Management's Amber Energy from Gold Reserve subsidiary Dalinar Energy, prompting objections from rival bidders and creditors.

The court is set to hear final arguments on the competing bids on Tuesday.

Gold Reserve is now arguing that Weil represented Elliott while the Citgo sale was ongoing, and that the two advising firms had relationships with some holders of Venezuelan bonds standing to receive auction proceeds under Amber's proposal.

Lawyers representing Venezuela also filed a motion this month to disqualify Pincus and the two advising firms.

Most fees identified by Gold Reserve belong to the advisers' relationship with bondholders, according to testimony presented in court. Elliott and its affiliates paid some $4.4 million to the advisers worldwide in a five-year period, a lawyer for Pincus said.

Weil, Gotshal & Manges and Evercore did not reply to requests for comment.

Andrew Rossman, counsel for Amber, said in the hearing that the idea that the company was favored in the process "is completely refuted by the facts." He added: "Amber's bids have been rejected four times. My client still bears the scars of the first rejection."

Pincus' counsel said the sale process was run effectively to find a value-maximizing transaction. "We have no loyalty to any particular bidder," he said.

Two of the creditors in the case, Crystallex and ConocoPhillips, also characterized the auction as fair and transparent.

(Reporting by Marianna Parraga in Houston; Editing by Nathan Crooks and Matthew Lewis)