Yukos May Appeal To US District Court Over Chapter 11 Dismissal

by Tatiana Smolenskaya, for LawAndTax-News.com, Moscow

07 March 2005

Following the dismissal of its plea that US Bankruptcy Judge Letitia Clark reconsider her decision to deny the firm Chapter 11 protection in the US, ailing Russian oil giant, Yukos has announced that it will consider appealing to US District Court.

In an unsuccessful attempt last year to prevent the Russian government from selling off one of its key assets to pay a disputed tax liability, Yukos sought bankruptcy protection in Houston, claiming jurisdiction on the grounds that it has two Texas bank accounts, and that its finance chief is resident in the state.

However, Judge Clark ruled late last month that this did not constitute a sufficient US presence to secure the firm Chapter 11 protection.

According to the Associated Press, since Judge Clark's dismissal of the case, which has left Yukos no option but to rely on the Russian courts and European arbitration procedures, the firm's insurance for directors and officers has been cancelled, its appeal against a 2002 tax bill has been denied, and investigations have been launched into the chief executive of its Tomskneft unit.

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