(Reuters) - Advisors to Venezuelan opposition leader Juan Guaido plan to file a lawsuit in a New York court on Tuesday requesting that state oil company PDVSA’s [PDVSA.UL] 2020 bond be declared null, two sources with knowledge of the situation said on Monday.
The PDVSA 2020 bond, backed by shares in U.S. refiner Citgo Petroleum Corp [PDVSAC.UL], is expected to go into default by Tuesday because a $913 million payment comes due on Monday and the cash-strapped company lacks the resources to pay. Citgo is majority-owned by Petróleos de Venezuela, S.A., known as PDVSA.
The U.S. Treasury Department, which maintains a broad sanctions program against Venezuelan President Nicolas Maduro, last week temporarily blocked transfers or sales of Citgo shares linked to the bond.
“The legal argument is that the (PDVSA 2020 bond) issue is invalid because it used Citgo shares as collateral without the authorization of the National Assembly,” said one of the sources, referring to the opposition-run congress.
Neither source said which New York court the lawsuit would be filed in.
Guaido has been recognized by more than 50 countries as Venezuela’s legitimate president, but Maduro continues to control the day-to-day operations of government and the Venezuelan operations of PDVSA.
Maduro lost control of Citgo when Washington recognized Guaido.
Venezuela’s information ministry and PDVSA, with an ad hoc board named by Guaido to oversee foreign holdings, did not immediately respond to requests for comment.
Reporting by Corina Pons and Marianna Parraga; Editing by Richard Chang
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