Immediate removal of the judicial expert in the CITGO auction, Robert B. Pincus, is essential, along with restarting the sale of the shares of PDV Holding Inc. This was reiterated by the parties from Venezuela — the Republic, PDVSA, PDVH, and CITGO— who raised serious conflicts of interest jeopardizing the integrity and impartiality of the process.
In a renewed motion to disqualify the judicial expert and his advisors, Weil, Gotshal & Manges LLP and Evercore Inc., the lawyers for the Bolivarian Republic of Venezuela and the ad hoc Board of Petróleos de Venezuela S.A. argue that Pincus’s financial interests and relationships with bidders, especially Elliott Investment Management L.P. and holders of PDVSA 2020 bonds, compromise his impartiality.
Before the court, they outlined the extensive and lucrative financial relationships the advisors maintain with Elliott and bondholders, which violate the impartiality standards expected of judicial officers under the law.
Motion to Disqualify the Judicial Expert from the CITGO Auction
On November 5, 2025, Brendan Patrick McDonnell, a lawyer for the Bolivarian Republic of Venezuela and Petróleos de Venezuela S.A., sent a communication to the judge of the United States District Court for the District of Delaware, Leonard P. Stark, indicating that they are joining PDV Holding Inc. and CITGO Petroleum Corp.
Following the court’s instructions, lawyers for the Venezuelan Parties, the judicial expert, Elliott/Amber, and Contrarian/Red Tree met and resolved all issues related to the parties censured in the public version of the sealed initial filing by the Venezuelan Parties in support of their renewed motion to disqualify the Judicial Expert and his advisors.
They accused Weil and Evercore of maintaining extensive, growing, and highly lucrative business relationships with key bidders and stakeholders, notably Elliott Investment Management L.P. and the holders of the PDVSA 2020 Bonds, while acting as “arms of the Court” with judicial immunity. It is alleged that the advisors received over USD 100 million in fees from these conflicting parties since they began advising the judicial expert.
The Venezuelan parties argue that these conflicts of interest violate federal statutes requiring judicial disqualification both for the appearance of bias and due to the existence of a financial interest in one of the parties. Furthermore, the motion presents evidence of actual undue influence, citing an internal communication in which a Weil partner urged his team to favorably treat Elliott to protect future business opportunities.
The motion accuses the advisors of the judicial expert, Robert B. Pincus, of concealing these links through delayed, partial, and misleading disclosures, which only came to light after a sworn deposition from a representative of Elliott.
As a remedy, the Venezuelan parties demand the complete annulment of the CITGO auction process, the suppression of all work done by the judicial expert and his advisors, as well as restarting the proceedings with a new expert and a team of advisors free from conflicts.
Background
The CITGO auction is part of the case Crystallex International Corp. v. the Bolivarian Republic of Venezuela filed in the District Court for Delaware. It involves a court-ordered sale of the indirect property of Petróleos de Venezuela S.A. (PDVSA) in CITGO Petroleum Corporation.
To this end, the court appointed a judicial expert to design and execute this sale process, namely, Robert B. Pincus, who, in turn, hired Weil and Evercore as his “subject-matter experts.” According to the court’s orders, both Pincus and his advisors are considered “arms of the Court” and enjoy judicial immunity.
This status imposes an obligation on them to act as neutral and objective judicial officers, subject to the same ethical standards as a judge, specifically the disqualification norms established by law. They clarify that the judicial expert’s dependence on Weil and Evercore is nearly total, to the extent that they lead negotiations, make presentations in court, and, at times, persuade Robert B. Pincus to change his own initial inclinations regarding bids.
Conflict of Interest: Financial Links with Bidders
The motion details extensive and lucrative financial relationships between Weil and Evercore, on one hand, and Elliott and the holders of PDVSA 2020 Bonds, on the other, which developed simultaneously to their roles as neutral advisors in the sale process.
Relationships with Elliott Investment Management
Weil: claims of a growing and exponential business relationship with Elliott. Since 2023, Weil has represented Elliott in over a dozen matters. Weil’s revenue from Elliott rose from approximately USD 300,000 in 2023 to nearly USD 1.25 million in 2024, exceeding USD 3.1 million in just the first half of 2025. Additionally, five Weil attorneys representing Pincus also represented Elliott in other matters.
Evercore: this firm raised USD 8.9 million from a group of ad hoc creditors, of which Elliott is the second-largest member. Moreover, Evercore initiated new representation for another ad hoc group participating in which Elliott is involved, from which Evercore expects to receive a one-time fee of USD 6 million and USD 175,000 monthly.
Relationships with PDVSA 2020 Bondholders
Weil: the relationship with the PDVSA 2020 bondholders is described as even more lucrative. Since 2021, Weil has charged over USD 62 million from bondholders and their affiliates, in addition to USD 12.8 million from ad hoc groups including those bondholders. They identified at least 21 Weil partners who advised the judicial expert and also represented the bondholders.
Evercore: figures for Evercore also significant. Since 2021, they received approximately USD 75 million for work with clients affiliated with the bondholders and expect to receive tens of millions more. Directly from bondholders, they have taken USD 15.5 million, with more millions pending in contingent success fees.
Entity AdvisorConflict ClientReported Income/FeesWeilElliott Investment Management~1.25M (2024), >USD 3.1M (H1 2025)WeilPDVSA 2020 Bondholders and affiliates>USD 62 million since 2021WeilAd Hoc Groups (incl. Bondholders)USD 12.8 million additionalEvercoreAd Hoc Group (Elliott key member)USD 8.9 million raised + USD 6M and USD 175k/month expected from new assignmentEvercorePDVSA 2020 Bondholders and affiliates~USD 90.5 million received since 2021, with tens of millions more expected
Evidence of Active Undue Influence
The motion presented by Venezuela considers irrefutable evidence that conflicts of interest not only created an appearance of bias but translated into active defense of a client’s interests.
They refer to an email dated June 24, 2025, where Jeffrey Saferstein, co-head of Weil’s Restructuring Department, conveyed to the judicial expert’s team Elliott’s “frustration” with the timeline of the process. In the email, Saferstein warned his partners: “I would hate for them [Elliott] not to want to work with us.” The motion interprets this communication as a direct instruction to favor Elliott in order to protect a lucrative business relationship, demonstrating that the conflict actively infected the process.
Concealment and Misleading Disclosure of Conflicts
In the motion, the Venezuelan parties accuse the judicial expert and his advisors of a systematic failure to disclose their obligations.
Initial disclosure absence: the expert and his advisors did not reveal any information regarding these relationships to the Republic of Venezuela or to PDVSA.
Partial and misleading disclosure: in March 2025, after a request from PDVH and CITGO, the advisors provided a supposedly “complete” list of engagements. This list, designated as “Highly Confidential,” only mentioned a brief engagement that Weil completed with Elliott in 2024, and none for Evercore.
Direct falsehood: on September 4, 2025, Weil falsely stated to CITGO and PDVH lawyers that “neither Weil nor Evercore has had any engagement with any of the bidders participating since the initial bidding period began.”
Forced revelation: The truth began to emerge on September 9, 2025, when Elliott’s associate general counsel, Michael Turkel, testified under oath in a deposition that Elliott maintained ongoing business relationships with both Weil and Evercore. It was only after this revelation that the Court ordered a more complete disclosure.
Legal Basis for the Disqualification of the Judicial Expert
The motion argues that disqualification is mandatory under two distinct sections of 28 U.S.C. § 455.
§ 455(a) – appearance of bias: it argues that a “reasonable and objective lay observer,” upon learning about the millions of dollars in fees advisors received from bidders and stakeholders, would reasonably question their impartiality. The filing lists a series of decisions by the judicial expert that it considers inexplicable unless viewed through the lens of this conflict, such as:
- Granting exclusivity to Elliott in 2024.
- Recommending bids by Elliott and Red Tree (an affiliate of a bondholder) that diverted value to bondholders.
- Pressuring other bidders to reach agreements with bondholders.
- Abruptly rescinding the agreement with Gold Reserve to recommend an “unsolicited” bid from Elliott that included a payment to the bondholders.
§ 455(b)(4) – financial interest: Weil and Evercore have a “financial interest in […] a party in the proceeding.” This is based on their role as “advisors” and “active participants in the matters” of Elliott and the PDVSA Bondholders, as well as the fact that their commercial and financial interests —the millions in past and future fees— could be “substantially affected by the outcome of the proceeding.” This grounds for disqualification cannot be waived.
Request: Nullification and Restart of the CITGO Auction
Since the process has been designed and executed by advisors with fundamental conflicts of interest, the Venezuelan Parties conclude that the process is fatally flawed and irremediable.
They argue that the court must:
- Immediately disqualify the judicial expert, Weil, and Evercore.
- Nullify all prior actions and recommendations, including the bids from Elliott and Gold Reserve, as they are a product of contaminated negotiations.
- Suppress all work produced by the expert’s team to ensure it does not influence future deliberations, citing legal precedents (In re Kempthorne).
- Restart the entire CITGO auction from the beginning with a new Judicial Expert and advisors free from conflicts.
The motion concludes that any inconvenience caused by the delay is outweighed by the imperative need to protect the integrity of the judicial process and public trust in the system.