(Reuters) - Venezuela's opposition has reached a deal with the trustee of a bond issued by state oil company PDVSA to delay litigation in a lawsuit challenging the validity of the bond, court filings showed.
The opposition-appointed PDVSA board, which is recognized in the United States as the company's rightful representation, last month sued in the U.S. District Court for the Southern (NYSE:SO) District of New York to annul PDVSA's 2020 bonds , which are backed by shares in U.S. refining subsidiary Citgo.
The deal between PDVSA and the defendants, bond trustee MUFG Union Bank and collateral agent Glas Americas, laid out a schedule in which fact discovery would extend until Feb. 10 2020, followed by a period of expert depositions before a hearing on May 5.
Judge Katherine Polk Failla agreed to the arrangement, known as a forbearance agreement, last Friday, filings showed.
It was not immediately clear what the deal means for Citgo.
The U.S. Treasury Department on Oct. 24 temporarily blocked the transfer of shares in the company, which prevented 2020 bondholders from exercising their rights to seize the refiner when the bonds went into default days later.
Venezuelan President Nicolas Maduro cannot make payments on the bond due to Washington's sanctions aimed at ousting him. The opposition, whose leader Juan Guaido is recognized by the Trump administration as the legitimate president, said it did not have the funds to make the $913 million payment due Oct. 28.
A spokesman for the Venezuela Creditors Committee, which represents bondholders, did not immediately respond to a request for comment on whether the forbearance agreement would prevent creditors from attempting to seize Citgo should the U.S. Treasury not extend its measure protecting the company when it expires in January.
Representatives of Venezuela's opposition in the United States did not respond to requests for comment.
While Guaido controls PDVSA's assets and legal representation in the United States, Maduro remains in control of the company's operations within Venezuela. The socialist leader calls Guaido a U.S. puppet seeking to oust him in a coup to seize control of the OPEC nation's vast oil reserves.
The country's economy has been in a tailspin since crude oil collapsed in 2014, prompting the government and PDVSA to default on much of its foreign debt and spurring hyperinflation and chronic shortages of basic goods that have forced millions of Venezuelans to emigrate.