FILE PHOTO: General view of Citgo Petroleum headquarters in Houston, Texas, U.S., January 11, 2024. REUTERS/Go Nakamura/File Photo

By Marianna Parraga

HOUSTON (Reuters) -Toronto-listed Gold Reserve has filed a complaint in a Delaware court against Rusoro Mining for alleged breach of its contractual obligations under a consortium agreement to bid for the parent of U.S. refiner Citgo Petroleum, it said on Monday.

A $5.9 billion bid by Elliott Investment Management's affiliate Amber Energy was recommended as the winner of a court-organized auction of shares in August, beating miner Gold Reserve's $7.9 billion bid.

Both offers included an agreement with Rusoro to use its $1.5 billion claim related to expropriated assets in Venezuela as part of the bids.

The sale process aims to auction Venezuela-owned PDV Holding to pay up to $19 billion to 15 creditors as compensation for debt defaults and asset expropriations in the South American country.

Delaware Judge Leonard Stark has not made a decision on the auction's winner amid objections and challenges to the bidding process, but the resolution of pending motions was expected this month.

Gold Reserve's legal action could bring another delay to complete the complex auction, which has passed through three bidding rounds in an eight-year court case.

Gold Reserve is seeking preliminary injunctive relief to enjoin Rusoro from participating in the sale process, the miner said in a release.

"We believe that Rusoro knowingly and materially breached its contractual obligations under a consortium agreement entered into with us in connection with the judicially supervised Citgo sale process in Delaware," it told Reuters in an email.

Gold Reserve's complaint was filed under seal in the Court of Chancery of Delaware. The company and parties representing Venezuela last month filed motions to disqualify the judge and court advisors over alleged conflict of interest, which remain pending.

Lawyers representing Rusoro did not immediately reply to a request for comment, but they informed the Delaware court of Gold Reserve's complaint over the weekend and said the company was reviewing the documents while reserving its rights to take any actions.

Gold Reserve is seeking "to prevent Rusoro Mining from taking steps to close on impending purchase of the shares of PDV Holding," Rusoro told the court.

Amber Energy asked Judge Stark on Monday to order Gold Reserve to disclose documents relating to its complaint and to set up a conference to discuss the matter so affected parties can plan next steps.

"Gold Reserve's latest effort to interfere with the judicial sale... is to ask another court, the Court of Chancery, to issue an injunction against Rusoro with the unmistakable purpose of blocking the sale of the PDV Holding shares," it said in a filing.

(Reporting by Marianna Parraga; Editing by Nathan Crooks, Alexandra Hudson and Jan Harvey)