A $7.38 billion bid by a unit of Toronto-listed miner Gold Reserve was named preliminary winner of an auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum, organized by a U.S. court to pay creditors for debt defaults and expropriations in the South American country.

A court-appointed adviser is preparing to recommend a consortium led by Gold Reserve Ltd. as the best bidder for Citgo Petroleum Corp.’s parent company, according to people familiar with the matter, with a judge to make the final decision in the coming months.

A court-appointed special master recommended a bid backed by Gold Reserve and Koch over a rival hedge-fund offer.