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Venezuela Faces the Loss of Citgo — and Desperately Needed Dollars

Venezuela Faces the Loss of Citgo -- and Desperately Needed Dollars(Bloomberg) — Venezuela could lose its largest U.S. asset after a court allowed a Canadian gold miner to seize shares of Citgo Petroleum Corp.’s parent to satisfy an arbitration award.A U.S. appeals court ruled on Monday that Crystallex International Corp. may seize U.S.-based stock of Citgo’s parent, which is part of Venezuela’s state-owned oil company, to cover a $ 1.4 billion award over the nationalization of gold fields.Unless reversed on appeal or blocked by the Trump administration, the decision would allow Crystallex to auction the shares to satisfy Venezuela’s unpaid debt to the Canadian company. That means the country, in the grip of its worst recession, could lose control of the refiner that processes Venezuelan crude into desperately needed hard currency.It also complicates efforts by interim President Juan Guaido to retain control of Venezuelan assets including Citgo while waging a power struggle with current leader Nicolas Maduro for leadership of the country. Guaido has asked U.S. President Donald Trump to bar creditors from seizing the country’s assets.Read More: Venezuela Must Pay $ 1.4 Billion in PDVH Stock to Crystallex“At this stage, the only action that could stop Venezuela from losing Citgo is either a successful U.S. Supreme Court appeal, which appears unlikely, or a decision by Trump to issue an asset-protection order as Guaido has been requesting,” Francisco Rodriguez, chief economist for Torino Capital, said in an interview.“The UN can also help,” added lawmaker Rafael Guzman, part of the opposition-led National Assembly’s finance committee. “We are going to push for all of them.”Guaido and Maduro are battling for control of Citgo by naming conflicting board nominees for its owner, Petroleos de Venezuela SA, or PDVSA. A state-court judge in Delaware will decide who has legal right to appoint directors for the state-run oil company, which owns Citgo.Guaido himself didn’t immediately return calls for comment on the appeals court’s ruling, nor did Jose Ignacio Hernandez, Guaido’s special attorney general, who was appointed to oversee litigation worldwide. Officials of Maduro’s Information Ministry didn’t return calls for comment, either.Read More: Venezuela Told to Give Shares of Citgo Parent to Gold Miner“For too long Venezuela has refused to compensate Crystallex for its illegal seizure of Crystallex’s assets,” Bob Fung, Crystallex’s CEO, said in an emailed statement. He added the court’s ruling was a “crucial step in getting Venezuela finally to honor its legal obligations.”Venezuela’s crisis follows years of Maduro’s and ex-leader Hugo Chavez’s socialist economic policies and the collapse in the country’s all-important oil industry. Venezuelan officials are scrambling to keep their hands on Citgo to rebuild the economy.Guaido, head of the country’s National Assembly, and Maduro, who has the support of the Venezuelan Army, have held talks in Oslo, Norway, seeking to resolve the crisis. The latest round of negotiations were scheduled to take place earlier this month in Barbados.Crystallex’s gold mining operations near Las Cristinas, Venezuela, were seized without compensation in 2011 when Chavez nationalized the country’s gold-mining industry. The company pursued arbitration and won a $ 1.2 billion award plus interest in 2016.Last year, Venezuela officials handed over $ 425 million as partial payment of the arbitration award, but the company couldn’t cut a deal to satisfy the rest of the debt. So Crystallex pushed ahead with efforts to seize shares of Citgo’s parent.Crystallex officials waged a three-year battle to seize shares of PDV Holding Inc., which owns Citgo. PDVSA owns the holding company. A federal judge in Delaware concluded last year that since Venezuela controls PDVSA, shares of Citgo’s parent were fair game to be seized for the debt.The Philadelphia-based appeals court upheld the trial judge’s finding that PDVSA is Venezuela’s alter ego in part because its run by the country’s military and all profits flow to the country’s coffers.|“It has the potential to be a big blow to Venezuela,” Russ Dallen, managing partner of Caracas Capital, said in an interview. “The pool of creditors that can now attack and go after PDVSA is greatly expanded.”Crystallex isn’t the only company that has sued Venezuela over unpaid debts. Investors have sued over $ 65 billion in defaulted bonds while rival ConocoPhillips sued Venezuela over seizure of its oil assets in the country. The U.S. oil giant won a $ 2 billion arbitration award over the nationalized assets. Last year, ConocoPhillips executives got $ 345 million in cash and commodities in settlement after the U.S. company seized some PDVSA assets in the Caribbean.The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, No. 18-2797, U.S. Court of Appeals for the Third Circuit (Philadelphia).(Adds details throughout.)\–With assistance from Alex Vasquez.To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net;Porter Wells in Washington at pwells30@bloomberg.netTo contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, ;Jo-El Meyer at jmeyer154@bloomberg.net, Peter JeffreyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.



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UPDATE 1-Netanyahu says Israel ready for Gaza campaign if needed; Palestinians plan huge march

UPDATE 1-Netanyahu says Israel ready for Gaza campaign if needed; Palestinians plan huge marchGAZA-ISRAEL BORDER, March 28 (Reuters) – Prime Minister Benjamin Netanyahu said on Thursday that Israel is prepared to wage a broad military campaign in Gaza if needed, after a two-day flareup of cross-border fighting that has thrust his security policies to the fore two weeks before an election. In Gaza, organizers announced plans for a massive protest on Saturday along the border to mark the anniversary of weekly demonstrations at which Israeli forces have, according to Gaza medical officials, already killed nearly 200 Palestinians. Israel launched air strikes and moved troops and armor reinforcements to the Gaza border this week after a rocket attack from the Hamas Islamist-run enclave wounded seven Israelis in a village north of Tel Aviv on Monday.



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Netanyahu says Israel ready for Gaza campaign if needed; Palestinians plan huge march

Netanyahu says Israel ready for Gaza campaign if needed; Palestinians plan huge marchIn Gaza, organizers announced plans for a massive protest on Saturday along the border to mark the anniversary of weekly demonstrations at which Israeli forces have, according to Gaza medical officials, already killed nearly 200 Palestinians. Israel launched air strikes and moved troops and armor reinforcements to the Gaza border this week after a rocket attack from the Hamas Islamist-run enclave wounded seven Israelis in a village north of Tel Aviv on Monday. “All Israelis should know that if a comprehensive campaign is required, we will enter it strong and safe, and after we have exhausted all of the other possibilities,” Netanyahu said after visiting the Gaza frontier and meeting with Israeli commanders.



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Malnourished Venezuelans hope urgently needed aid arrives soon

Malnourished Venezuelans hope urgently needed aid arrives soonThe 38-year-old is one of many Venezuelans suffering from malnutrition as the once-prosperous, oil-rich OPEC nation has seen its economy halve in size over the last five years under President Nicolas Maduro. Venezuelans’ diets have become ever more deficient in vitamins and protein, as currency controls restrict food imports and salaries fail to keep apace with inflation that is now above 2 million percent annually. Growing malnutrition is one of the reasons Venezuela’s opposition leader Juan Guaido has moved ahead with his plans to bring supplies of food and medicine into Venezuela by land and sea on Saturday, despite resistance from Maduro.



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My special needs students needed their teachers in the classroom — not on the picket line

My special needs students needed their teachers in the classroom — not on the picket lineThe Los Angeles Unified School District strike resulted in historic wins for teachers. But students with disabilities were forced to bear the cost.



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Radical Changes Needed to Secure Brexit, EU Tells May

Radical Changes Needed to Secure Brexit, EU Tells May(Bloomberg) — The scale of Prime Minister Theresa May’s Brexit defeat has convinced the European Union to demand she radically rethink the U.K.’s red lines as the bloc signaled its willingness to delay Britain’s withdrawal by many months.



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Republicans starting to agree with Democrats that more than a wall is needed to secure the border

Republicans starting to agree with Democrats that more than a wall is needed to secure the borderTexas Republican Rep. Chip Roy says that many of his constituents are concerned for their safety without border security.



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U.K. Says Work Still Needed on EU Brexit Backstop Reassurances

U.K. Says Work Still Needed on EU Brexit Backstop ReassurancesMay “has been in contact with European counterparts over the break and you can expect more of that to continue this week,” her spokeswoman, Alison Donnelly, told reporters in London on Monday. The premier is seeking assurances from the EU on the so-called backstop arrangement for the post-Brexit Irish border. It’s a fallback arrangement to ensure the border stays open even if the EU and U.K. can’t devise a future trade deal.



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More time may be needed for North Carolina election decision

More time may be needed for North Carolina election decisionRALEIGH, N.C. (AP) — The head of North Carolina's elections board is suggesting more time may be needed to decide whether a new congressional district election is necessary due to absentee ballot fraud allegations.



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Macron tells Saudi prince international experts needed in Khashoggi investigation

Macron tells Saudi prince international experts needed in Khashoggi investigationFrench President Emmanuel Macron told Saudi Crown Prince Mohammed bin Salman on Friday that Europe would insist on international experts being part of the investigation into the murder of Saudi journalist Jamal Khashoggi. In a five-minute exchange on the sidelines of the G20 summit in Argentina, Macron conveyed “very firm” messages to the prince over the killing and the need to find a political solution for the situation in Yemen, an Elysee official also said. The Saudi Gazette newspaper posted video of the meeting online showing the two speaking in hushed tones with their heads close together, Macron looking the crown prince in the eye and Prince Mohammed nodding his head and at times smiling.



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