Yukos Asks U.S. Court to Reconsider Its Bankruptcy Case

Yukos has asked a U.S. bankruptcy judge to reconsider her dismissal of its bankruptcy case to help prevent Moscow from seizing its remaining Russian operations, Reuters reported.

Yukos made a legal filing to U.S. Bankruptcy Judge Letitia Clark, then said in a statement that it believed she erred when she issued her dismissal order on Thursday, and argued the company would be hurt by her refusal to grant U.S. jurisdiction in the case.

Judge Clark ruled the U.S. courts had no jurisdiction in the case, and said the dispute between the company and the Kremlin belonged in a forum where Moscow would participate.

Yukos, which sought bankruptcy protection in Houston in December, has complained it was the victim of a Kremlin-orchestrated campaign to destroy it and former owner Mikhail Khodorkovsky, who is facing a 10-year prison term for fraud and tax evasion.

“Yukos, our shareholders, creditors and our employees are clearly better off if we are able to continue with our bankruptcy base in the U.S. Court,” Chief Executive Officer Steven Theede said in a statement on Friday.

The company said on Thursday that it was also mulling taking its appeal to the higher U.S. District Court.

Russian authorities sold Yukos’s Yuganskneftegaz at auction in December despite restrictions imposed by Judge Clark. The unit was bought by a previously unknown group for $9.4 billion (4.9 billion pounds) which itself was subsequently bought by state-controlled oil company Rosneft.

The Russian government has levied a $27.5 billion back tax bill on Yukos and seized the company’s Russian bank accounts.

Yukos acknowledged the judge’s concern about Moscow’s refusal to abide by her rulings, but said “the only way of knowing for certain will be to put them to the test.”

In court papers, Yukos said because of the automatic stay on selling its assets imposed by the bankruptcy court in December, Russian authorities had made no move to take over its Tomskneft and Samaraneftgaz production units or its six refineries.

“Without the automatic stay, Yukos will be dismembered quickly through inappropriate processes,” the company said. Yukos has also filed a case against the Russian government in the European Court of Human Rights and its parent company, Menatep Group, has sued Russia in Europe for $28.3 billion in financial damages.

(From MosNews, 02.28.2005)