Jay Cosel

A lawyer for the special master overseeing the auction of Citgo to satisfy billions of dollars' worth of Venezuelan debt has defended his request for more than $15.3 million in fees on top of nearly $63 million already paid, saying the request follows an "extraordinarily complex" sale process. In a letter submitted to a Delaware federal court on Monday, Potter Anderson & Corroon LLP partner Bindu Ann Palapura acknowledged that the $15.346 million in fees incurred by special master Robert Pincus and his advisors during September, October and November last year were "undoubtedly significant." She nevertheless defended the fee request as warranted, given the extensive labor and legal expertise that was necessary to finalize the sale process, which resulted in a $5.892 billion bid from hedge fund Elliott Investment Management LP that was accepted by the court late last year. The letter comes after Gold Reserve Ltd. — whose $7.382 billion bid for Citgo was rejected last year after being initially accepted by Pincus — complained in a Feb. 23 letter to the court that the fee request was "staggering." Gold Reserve argued, in part, that the $10.2 million in legal fees charged by Weil Gotshal & Manges LLP was unreasonable, noting that the request includes time entries from 41 attorneys at an average hourly rate of $1,566.83, with only two staff attorneys charging less than $1,000 per hour. But Palapura argued that Gold Reserve is downplaying the "scope and breadth" of work the special master's advisors had to perform during the three months in question. "Gold Reserve also largely ignores the complexity of the matter, the special master's dual role as both an arm of the court and a litigant, and the evidentiary burden placed on the special master in supporting his recommended bid," she wrote. Gold Reserve and others had already argued in 2024 that the fees incurred by Pincus were too high, resulting in a court order from U.S. Circuit Judge Leonard P. Stark requiring that Pincus evaluate "whether the number of timekeepers can be reduced" and whether Weil could "still justify billing on an ongoing basis at the same non-discounted rates they have been charging for the first 44 months of their engagement with this case." Palapura rebutted Gold Reserve's allegations in its letter last month that Pincus had not complied with the order, noting that he had significantly reduced the number of timekeepers and discussed the discounted fee issue. "The special master discussed the issue with Weil and determined that, in light of the revised billing procedures that the advisors implemented beginning in January 2025, there was no reason for Weil to deviate from the standard billing rates that it had been charging for the sale process to that point without objection," she wrote. The fee dispute comes just weeks after Pincus lost his bid to have Venezuela and Gold Reserve pay his $3.1 million bill for defending against their unsuccessful bid to have him disqualified in the long-running litigation over the sale of Citgo. In a Feb. 9 order, Judge Stark said he was "not persuaded this situation merits requiring the moving parties to bear more than their ordinary share of the special master's fees associated with the motions." The sales process for Citgo resulted in Judge Stark approving the $5.892 billion bid from hedge fund Elliott — submitted formally by Elliott affiliate Amber Energy Inc. — last fall. In his ruling, the judge concluded that it offered the best overall combination of price and certainty of closing of any bid submitted. Judge Stark, formerly a district court judge for the U.S. District Court for the District of Delaware, was elevated to the Federal Circuit in 2022, but he continues to oversee a variety of cases brought by creditors against Venezuela in Delaware federal court. The Delaware court is conducting the long-awaited sale nearly eight years after defunct Canadian mining company Crystallex International Corp. won an attachment order over shares in PDV Holding Inc., the indirect parent company of Citgo. PDV Holding is a subsidiary of Venezuelan state-owned oil company Petróleos de Venezuela SA, or PDVSA. Crystallex is looking to enforce a $1.2 billion arbitral award it won against Venezuela after being ousted from a lucrative Venezuelan gold-mining project. In the years since then, the litigation has attracted other creditors of Venezuela owed billions of dollars more, since Citgo is Venezuela's most significant seizable asset. Those creditors include Gold Reserve, which won its $713 million arbitral award in September 2014 after Venezuela yanked its permit for a gold-mining project. Gold Reserve initially won the nod from Pincus as his chosen bidder in a final recommendation last year, with a $7.4 billion bid. But the special master later changed his mind, issuing an updated final recommendation that the court approve the $5.9 billion bid from Elliott. Counsel and representatives for the parties declined to comment or could not immediately be reached for comment on Tuesday. Gold Reserve is represented by Kevin J. Mangan, Matthew P. Ward and Stephanie S. Riley of Womble Bond Dickinson, Matthew H. Kirtland, Katherine G. Connolly and Taylor J. LeMay of Norton Rose Fulbright, and by Michael J. Bowe, Lauren Tabaksblat, Andrew T. Sutton and Kate E. Fisch of Brithem LLP. Pincus is represented by Matthew F. Davis, Bindu A. Palapura and Malisa C. Dang of Potter Anderson & Corroon LLP, and by Matthew S. Barr, David J. Lender, Jared R. Friedmann and Chase A. Bentley of Weil Gotshal & Manges LLP. Venezuela is represented by Donald B. Verrilli Jr., Elaine J. Goldenberg, Ginger D. Anders, George M. Garvey and Adeel Mohammadi of Munger Tolles & Olson LLP. PDVSA is represented by Joseph D. Pizzurro, Kevin A. Meehan, Juan O. Perla, Robert Groot and David V. Holmes of Curtis Mallet-Prevost Colt & Mosle LLP. Delaware counsel for Venezuela and PDVSA are Samuel Taylor Hirzel II and Brendan Patrick McDonnell of Heyman Enerio Gattuso & Hirzel LLP. PDV Holding and Citgo are represented by Susan W. Waesco and Alexandra M. Cumings of Morris Nichols Arsht & Tunnell LLP, and by Nathan P. Eimer, Daniel D. Birk and Gregory M. Schweizer of Eimer Stahl LLP. Crystallex is represented by Raymond J. DiCamillo, Jeffrey L. Moyer and Travis S. Hunter of Richards Layton & Finger PA, and by Robert L. Weigel, Jason W. Myatt, Rahim Moloo, Miguel A. Estrada, Lucas C. Townsend, Zachary Kady and Adam M. Smith of Gibson Dunn & Crutcher LLP. The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, case number 1:17-mc-00151, in the U.S. District Court for the District of Delaware.

Mar 3

5 min

A lawyer for the special master overseeing the auction of Citgo to satisfy billions of dollars' worth of Venezuelan debt has defended his request for more than $15.3 million in fees on top of nearly $63 million already paid, saying the request follows an "extraordinarily complex" sale process. In a letter submitted to a Delaware federal court on Monday, Potter Anderson & Corroon LLP partner Bindu Ann Palapura acknowledged that the $15.346 million in fees incurred by special master Robert Pincus and his advisors during September, October and November last year were "undoubtedly significant." She nevertheless defended the fee request as warranted, given the extensive labor and legal expertise that was necessary to finalize the sale process, which resulted in a $5.892 billion bid from hedge fund Elliott Investment Management LP that was accepted by the court late last year. The letter comes after Gold Reserve Ltd. — whose $7.382 billion bid for Citgo was rejected last year after being initially accepted by Pincus — complained in a Feb. 23 letter to the court that the fee request was "staggering." Gold Reserve argued, in part, that the $10.2 million in legal fees charged by Weil Gotshal & Manges LLP was unreasonable, noting that the request includes time entries from 41 attorneys at an average hourly rate of $1,566.83, with only two staff attorneys charging less than $1,000 per hour. But Palapura argued that Gold Reserve is downplaying the "scope and breadth" of work the special master's advisors had to perform during the three months in question. "Gold Reserve also largely ignores the complexity of the matter, the special master's dual role as both an arm of the court and a litigant, and the evidentiary burden placed on the special master in supporting his recommended bid," she wrote. Gold Reserve and others had already argued in 2024 that the fees incurred by Pincus were too high, resulting in a court order from U.S. Circuit Judge Leonard P. Stark requiring that Pincus evaluate "whether the number of timekeepers can be reduced" and whether Weil could "still justify billing on an ongoing basis at the same non-discounted rates they have been charging for the first 44 months of their engagement with this case." Palapura rebutted Gold Reserve's allegations in its letter last month that Pincus had not complied with the order, noting that he had significantly reduced the number of timekeepers and discussed the discounted fee issue. "The special master discussed the issue with Weil and determined that, in light of the revised billing procedures that the advisors implemented beginning in January 2025, there was no reason for Weil to deviate from the standard billing rates that it had been charging for the sale process to that point without objection," she wrote. The fee dispute comes just weeks after Pincus lost his bid to have Venezuela and Gold Reserve pay his $3.1 million bill for defending against their unsuccessful bid to have him disqualified in the long-running litigation over the sale of Citgo. In a Feb. 9 order, Judge Stark said he was "not persuaded this situation merits requiring the moving parties to bear more than their ordinary share of the special master's fees associated with the motions." The sales process for Citgo resulted in Judge Stark approving the $5.892 billion bid from hedge fund Elliott — submitted formally by Elliott affiliate Amber Energy Inc. — last fall. In his ruling, the judge concluded that it offered the best overall combination of price and certainty of closing of any bid submitted. Judge Stark, formerly a district court judge for the U.S. District Court for the District of Delaware, was elevated to the Federal Circuit in 2022, but he continues to oversee a variety of cases brought by creditors against Venezuela in Delaware federal court. The Delaware court is conducting the long-awaited sale nearly eight years after defunct Canadian mining company Crystallex International Corp. won an attachment order over shares in PDV Holding Inc., the indirect parent company of Citgo. PDV Holding is a subsidiary of Venezuelan state-owned oil company Petróleos de Venezuela SA, or PDVSA. Crystallex is looking to enforce a $1.2 billion arbitral award it won against Venezuela after being ousted from a lucrative Venezuelan gold-mining project. In the years since then, the litigation has attracted other creditors of Venezuela owed billions of dollars more, since Citgo is Venezuela's most significant seizable asset. Those creditors include Gold Reserve, which won its $713 million arbitral award in September 2014 after Venezuela yanked its permit for a gold-mining project. Gold Reserve initially won the nod from Pincus as his chosen bidder in a final recommendation last year, with a $7.4 billion bid. But the special master later changed his mind, issuing an updated final recommendation that the court approve the $5.9 billion bid from Elliott. Counsel and representatives for the parties declined to comment or could not immediately be reached for comment on Tuesday. Gold Reserve is represented by Kevin J. Mangan, Matthew P. Ward and Stephanie S. Riley of Womble Bond Dickinson, Matthew H. Kirtland, Katherine G. Connolly and Taylor J. LeMay of Norton Rose Fulbright, and by Michael J. Bowe, Lauren Tabaksblat, Andrew T. Sutton and Kate E. Fisch of Brithem LLP. Pincus is represented by Matthew F. Davis, Bindu A. Palapura and Malisa C. Dang of Potter Anderson & Corroon LLP, and by Matthew S. Barr, David J. Lender, Jared R. Friedmann and Chase A. Bentley of Weil Gotshal & Manges LLP. Venezuela is represented by Donald B. Verrilli Jr., Elaine J. Goldenberg, Ginger D. Anders, George M. Garvey and Adeel Mohammadi of Munger Tolles & Olson LLP. PDVSA is represented by Joseph D. Pizzurro, Kevin A. Meehan, Juan O. Perla, Robert Groot and David V. Holmes of Curtis Mallet-Prevost Colt & Mosle LLP. Delaware counsel for Venezuela and PDVSA are Samuel Taylor Hirzel II and Brendan Patrick McDonnell of Heyman Enerio Gattuso & Hirzel LLP. PDV Holding and Citgo are represented by Susan W. Waesco and Alexandra M. Cumings of Morris Nichols Arsht & Tunnell LLP, and by Nathan P. Eimer, Daniel D. Birk and Gregory M. Schweizer of Eimer Stahl LLP. Crystallex is represented by Raymond J. DiCamillo, Jeffrey L. Moyer and Travis S. Hunter of Richards Layton & Finger PA, and by Robert L. Weigel, Jason W. Myatt, Rahim Moloo, Miguel A. Estrada, Lucas C. Townsend, Zachary Kady and Adam M. Smith of Gibson Dunn & Crutcher LLP. The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, case number 1:17-mc-00151, in the U.S. District Court for the District of Delaware.

Mar 3

5 min

Private equity shop American Securities on Tuesday announced that it has agreed to sell two of its portfolio companies to U.K.-based Rosebank Industries Plc in a deal that boasts an enterprise value of $3.25 billion and was built by three firms. American Securities is selling CPM Holdings Inc. and ASP MWI Holdings Inc. with its subsidiaries operating under the MW Components brand for $3.05 billion, with a potential earnout payment of up to an additional $200 million, according to a Tuesday statement. American Securities is selling CPM Holdings Inc. and ASP MWI Holdings Inc. with its subsidiaries operating under the MW Components brand for $3.05 billion, with a potential earnout payment of up to an additional $200 million, according to a Tuesday statement. Weil Gotshal & Manges LLP advised CPM, MW Components and American Securities; Hunton Andrews Kurth LLP also advised MW Components, and Simpson Thacher & Bartlett LLP advised Rosebank Industries. Headquartered in Blaine, Minnesota, CPM designs and makes highly engineered process equipment and automation systems. It serves a global customer base operating through three main segments: industrial solutions, engineered solutions, and process solutions mainly serving the animal feed, oilseed processing, renewable energy, food, and other industrial markets, according to Tuesday's statement. American Securities first invested in CPM in November 2018. "American Securities has been an outstanding partner," said CPM CEO Dave Webster. "Their deep industrial expertise and active operational engagement enabled us to elevate our customer offering, broaden our capabilities, and further strengthen our organization. We are excited to carry that progress forward as we embark on this new chapter with Rosebank." Headquartered in Charlotte, North Carolina, MW Components makes highly engineered bespoke fasteners, springs, and precision metal components. American Securities first invested in MW Components in 2017, the statement said. "American Securities has played an instrumental role in MW Components' evolution," said MW Components CEO Thomas Amato. "Over the years, American Securities has brought thoughtful guidance and operational rigor to support the company's key growth and strategic repositioning initiatives. Their partnership has positioned MW Components well for continued success in the years ahead." American Securities said it has partnered with both companies to speed up growth, improve operational effectiveness, and strengthen its competitive positioning. "It has been a true privilege to partner with these exceptional management teams," said American Securities Founder and CEO Michael Fisch. "With Dave Webster's leadership at CPM and Tom Amato's leadership at MW Components, both businesses have built durable platforms for sustained success. We are confident that CPM and MW Components are well positioned to build on their momentum and pursue their next phase of growth with Rosebank." For Rosebank, the company said the deal represents the next step in its "buy, improve, sell" strategy for creating shareholder value. "This transaction represents the next step of the Rosebank journey … MW Components and CPM are high-quality businesses with much unrealised potential, and we are confident that our proven approach will unlock substantial value for shareholders," said Rosebank CEO Simon Peckham. "We are grateful for the strong and continued support from our shareholders and look forward to delivering." The Simpson Thacher team advising Rosebank was led by partners Keegan Lopez and Lucy Gillett. The Weil team advising American Securities, MW Components, and CPM was led by partners Ryan Taylor and Michael Lubowitz and included David Avery-Gee and Sarah Flaherty. The Hunton team advising MW Components was led by M&A partners Austin Maloney and Doug Granger.

Mar 3

3 min

Global law firm Freshfields advised Deutsche Bank Securities Inc. in connection with the initial public offering of 28,750,000 units of OneIM Acquisition Corp., including the exercise in full of the underwriter’s overallotment option. OneIM Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Freshfields team consisted of partners Michael Levitt, Jackie Marino, counsel Jeremy Barr, senior associate Abbey MacDonald and associate Hayley Tartell. Counsel Jay Cosel and associate Hannah Golden advised on tax matters.

Jan 16

1 min

The cable industry's main trade group is suing the U.S. Copyright Office, challenging an agency rule it says inflates the royalties cable providers must pay for carrying broadcast television by requiring them to report revenue they never actually receive. The Internet & Television Association argued in a lawsuit filed Friday in D.C. federal court that a 2024 Copyright Office rule violates the law by forcing operators to report that they collected the full sticker price for cable, even when customers buy TV service as a part of discounted bundles that combine TV, broadband, and phone service. The group used to be called the National Cable & Telecommunications Association. "The statute makes clear that the term 'gross receipts' is meant to capture only the 'actual gross receipts' 'for' that 'basic service,'" said the trade group, referring to Section 111 of the Copyright Act. That section of the Copyright Act requires cable companies to pay fees to the Copyright Office for the right to retransmit over-the-air television broadcasts to cable subscribers — fees that the government agency then distributes to copyright owners, according to the complaint. The cable group argued that the Copyright Office's rule results in "phantom" revenue and royalty payments based on money cable providers do not receive. The suit also names the Library of Congress, which houses the Copyright Office; Shira Perlmutter, the agency's chief; and Robert Newlen, the acting librarian. Press officials for the Copyright Office and Library of Congress declined to comment. The cable group argued that the Copyright Office has ignored widely used accounting standards requiring that discounts be split proportionately across all parts of a bundle. "For instance, if cable, internet and voice services are each available at a standalone price of $40, but a bundle of the three is sold at a discounted price of $99, then according to [generally accepted accounting principles], the revenue attributable to the cable television service when sold within that bundle is $33," cable group said. "In other words, if the bundled price reflects a $21 discount, that discount must be allocated proportionally among the three services ($7 for each service)." The complaint also challenges the Copyright Office's decision to treat equipment fees as part of a cable operator's gross receipts, even though the cable group said many subscribers now access the same broadcast channels through free apps on smart TVs or streaming devices. It said the Copyright Office is relying on logic that made more sense in the 1970s, when gross receipts included fees "for equipment like cable converters" that were necessary for cable service. "But as NCTA explained, by definition, equipment fees are not receipts for the service of providing broadcast programming," the group said. The cable group is asking the U.S. District Court for the District of Columbia to declare the Copyright Office's rule unlawful under the Administrative Procedure Act and order the agency to adopt a new rule that ties royalties to actual cable revenue within bundles while excluding equipment fees unless the hardware is truly essential. Counsel information for the defendants was not immediately available. The Internet & Television Association is represented by Sarang V. Damle, Matthew A. Brill, Brent T.F. Murphy, and Hasala K. Ariyaratne of Latham & Watkins LLP, and by Robert K. Kry and Jackson A. Myers of MoloLamken LLP. The case is Internet & Television Association v. U.S. Copyright Office et al., case number 1:26-cv-00713, in the U.S. District Court for the District of Columbia.

Mar 2

3 min