By Jonathan Stempel
NEW YORK (Reuters) – A U.S. appeals court on Wednesday set aside a judge’s ruling that bondholders had valid claims against Venezuela’s state-run oil company related to its U.S. refiner Citgo, and directed the judge to apply Venezuela law in assessing the claims.
The decision by the 2nd U.S. Circuit Court of Appeals in Manhattan could provide a boost to opponents of Venezuelan President Nicolas Maduro, who have since 2019 controlled some of the Petroleos de Venezuela’s (PDVSA) overseas assets.
U.S. District Judge Katherine Polk Failla in Manhattan had applied New York law in October 2020 when she authorized PDVSA bondholders to seize a 50.1% stake in Citgo, a PDVSA subsidiary that had been pledged as collateral for the bonds.
Failla also entered a $1.68 billion judgment against PDVSA, declaring it in default.
The bonds had been issued under Maduro, but opponents said the opposition-controlled National Assembly…
