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U.S. judge won't grant bankruptcy to Russian oil company

Associated Press
Published February 25, 2005

HOUSTON - Beleaguered Russian oil company Yukos lost its desperate bid for shelter in U.S. courts Thursday when a judge dismissed its bankruptcy case, saying the company didn't have enough of a presence in the United States to establish U.S. jurisdiction over a Russian company.

Yukos' presence in the United States consisted only of two bank accounts in Texas and its displaced finance chief, who conducted business from his Houston home.

U.S. Bankruptcy Judge Letitia Clark's dismissal of the Chapter 11 case forces Yukos to rely on European arbitration proceedings and unsuccessful appeals in Russian courts in its battle against a disputed multibillion-dollar back-tax levy.

It also squashes bankruptcy-related lawsuits stemming from the auction of a key subsidiary, Yuganskneftegaz, that essentially gutted the company. Those lawsuits include a $20-billion claim against four state companies for allegedly violating asset protection afforded under U.S. bankruptcy law by participating in the Dec. 19 sale.

Those companies include state-owned natural gas giant Gazprom and state-owned oil company Rosneft.

The Russian government had ignored the U.S. proceedings, saying Clark had no authority on Russian soil.

[Last modified February 25, 2005, 00:51:16]

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