Affiliates of hedge fund Gramercy won permission Thursday to register New York judgments totaling more than $1.4 billion against Venezuela's state-owned oil company in Delaware, where a long-awaited auction of Venezuela's most significant seizable asset to satisfy creditors owed some $20 billion is drawing to a close.

U.S. District Judge Jed S. Rakoff signed off on the motion filed by Girard Street Investment Holdings LLC and seven entities with variations of the name G&A Strategic Investments, ruling that they had shown that the state-owned Petróleos de Venezuela SA, or PDVSA, has no New York assets but owns various Delaware entities. Thursday's order also permits the plaintiffs, which are owed the money under various defaulted notes issued by PDVSA, to register the judgment in Texas.

Among the Venezuelan assets in Delaware is PDV Holding Inc., a PDVSA subsidiary and the indirect parent company of oil giant Citgo. PDVH is also the target of the parallel litigation in Delaware, where the winning bidder in a long-delayed auction of the company's shares is expected to be chosen in the coming weeks. Numerous creditors of Venezuela — although not the Gramercy entities involved in the present suit — have secured writs of attachment against the PDVH shares in the Delaware proceedings.

PDVSA and its subsidiary PDVSA Petróleo SA had argued before Judge Rakoff that the PDVH shares aren't enough to support the Gramercy entities' motion because they will be used to satisfy these other creditors. But the judge was not convinced.

"Establishing good cause to register a judgment under Section 1963 does not depend ... on an assessment of whether the 'substantial assets' identified in the foreign district will be able to be executed upon," Judge Rakoff wrote.

"True, plaintiffs have not identified with precision the property against which they hope to execute judgment, but plaintiffs are not required at this stage to 'demonstrate to a complete certainty that the assets or property in question are extant,'" he added later. "Additionally, the court sees no meaningful reason, for the purposes of the 'good cause' analysis, to disregard 'property' in the form of debts owed or money payable to defendants."

Nor was Judge Rakoff swayed by arguments that the Gramercy entities should have to show how they could register the judgment in light of sanctions imposed against Venezuela, saying the defendants were "conflat[ing] entry of judgment with the transfer of assets."

"Regardless of whether U.S. sanctions prohibit plaintiffs from enforcing their judgment against defendants' assets without a special license, defendants have not pointed to any precedent establishing that U.S. sanctions prohibit the mere entry of judgment against a blocked entity," the judge added.

Judge Rakoff declined to issue a declaration that a "reasonable period of time" has elapsed since he entered the judgment, saying the request would be better directed to the Delaware and Texas courts where the plaintiffs are looking to seize Venezuelan property. Such a declaration would allow the plaintiffs to seek the attachment of Venezuela's property under the Foreign Sovereign Immunities Act.

Counsel for the parties declined to comment or could not immediately be reached or comment Thursday.

The ruling comes after several months Judge Rakoff ordered PDVSA and PDVSA Petróleo to pay the defaulted notes, but declined to enforce the debt by allowing the plaintiffs to target PDVH as PDVSA's alter ego. In his decision, he concluded that the Gramercy entities had "utterly failed" to prove that PDVSA exerted significant enough control over PDVH's day-to-day operations.

He went on to accuse the Gramercy affiliates of trying "to make an end run around" the parallel litigation in Delaware, in which the affiliates' unfavorable position toward the end of a long line of creditors means they are unlikely to recover any funds.

The Gramercy entities and PDVH have both since appealed the decision.

In Delaware, meanwhile, the federal court there is conducting the sale of PDVH's assets more than seven years after defunct Canadian mining company Crystallex International Corp. won an attachment order over the PDVH shares to satisfy a $1.2 billion arbitral award it won after being ousted from a lucrative Venezuelan gold mining project.

PDVSA and PDVSA Petróleo SA are represented by Camilo Cardozo, Dora Paula Georgescu, Andreina Escobar, Matthew Hoffman, Aamir Siddik and Briana R. Falcon of Vinson & Elkins LLP.

PDV Holding Inc. is represented by Michael Gottlieb, Robert Meyer and Andrew English of Willkie Farr & Gallagher LLP and Nathan P. Eimer, Scott C. Solberg, James W. Joseph, Daniel D. Birk and Gregory M. Schweizer of Eimer Stahl LLP.

Girard Street and the other plaintiffs are represented by Michael Baratz, Emma Marshak and Evan Glassman of Steptoe LLP and by Jay B. Kasner, Scott D. Musoff and Robert Drain of Skadden Arps Slate Meagher & Flom LLP.

The consolidated cases are G&A Strategic Investments I LLC et al. v. Petróleos de Venezuela SA et al., case number 1:23-cv-10766, Girard Street Investment Holdings LLC v. Petróleos de Venezuela SA et al., case number 1:23-cv-10772, and Girard Street Investment Holdings LLC et al. v. PDV Holding Inc., case number 1:24-cv-04448, all in the U.S. District Court for the Southern District of New York.