Yukos Must Prove Jurisdiction, Says US Bankruptcy Judge

by Glen Shapiro, for LawAndTax-News.com, New York

24 January 2005

Ruling last Thursday in Houston, Bankruptcy Judge Letitia Clark stated that beleaguered Russian oil firm, Yukos cannot launch an investigation into the auction of its Yuganskneftegaz unit until she has reached a decision on the validity of the firm's Chapter 11 filing in the United States.

Following the controversial auction of Yukos's main production unit last month, the firm sought leave to hear depositions and make inquiries in order to ascertain who now controls Yugansk.

The firm had threatened that next month it would be launching a $20 billion damages claim against all the major players in the auction, which include Baikal Finance (which initially acquired Yugansk), Rosneft (which bought the unit from Baikal, and plans to merge with state-owned Gazprom), and Gazprom itself.

However, according to reports, Judge Clark has ordered that such discovery be limited until she has reached a decision on Yukos's attempt to claim US bankruptcy protections.

On February 16-17, Deutsche Bank is set to argue that the case does not belong in the US, because the firm has no real presence in Texas beyond the fact that its finance chief is resident in the state, and that it has two bank accounts there.

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