By OGJ editors
HOUSTON, Feb. 25 -- OAO Yukos is reviewing its options after a US judge dismissed a Chapter 11 bankruptcy case filed in Houston as part of an unsuccessful attempt to block the sale of Yukos unit Yuganskneftegas (OGJ Online, Dec. 15, 2004).
The Russian government claims that Yukos owes $27.5 billion in delinquent taxes. Yukos disputes the Russian tax claim, calling it a "politically motivated, unlawful action."
The company's problems began with the Oct. 25, 2003, arrest of Mikhail Khodorkovsky, former chief executive, on fraud and tax evasion charges. He has pleaded innocent to the charges and remains on trial in Moscow.
Yuganskneftegas was sold to Baikal Finance Group on Dec. 19. Russian authorities conducted the auction after the US Bankruptcy Court for the Southern District of Texas issued a temporary injunction applying primarily to a consortium of international banks arranging the multibillion-dollar financing (OGJ Online, Dec. 17, 2004).
OAO Rosneft later bought Baikal Finance Group, giving Rosneft control of Yugansknefegas.
On Feb. 24, Houston Bankruptcy Judge Letitia Z. Clark ruled there was no legal precedent for an international company so involved in its home country's economy to involve the US court system.
"The vast majority of the business and financial activities of Yukos continue to occur in Russia. Such activities require the continued participation of the Russian government," Clark wrote.
Yukos CEO Steven Theede said he believes Yukos "acted appropriately." The judge agreed with Yukos on four of five issues, he noted. Deutsche Bank AG filed the motion to dismiss the case.
"It is regrettable," Theede said of the dismissal. "We must now consider all the options available to us and determine what our next steps will be. . . . Our assets were illegally seized. We want them back and, or, damages paid."