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12/15/2004:
"YUKOS Seeks U.S. Bankruptcy Protection"
MOSCOW (Reuters) - Russian oil group YUKOS has filed for bankruptcy protection in a U.S. court in an attempt to stop Russia's government from auctioning off its main production unit on Dec. 19, it said on Wednesday.YUKOS has also asked the Houston court, which was due to convene later on Wednesday, to order Russia to arbitration so that it can press claims for billions of dollars in damages over a "campaign of illegal, discriminatory and disproportionate" tax claims.
The Russian authorities plan to auction Yuganskneftegaz, the crown jewel of fallen oligarch Mikhail Khodorkovsky's business empire, in pursuit of $27 billion back-tax claims against YUKOS.
The auction's starting price is $9 billion. Khodorkovsky is on trial for fraud and tax evasion in what many see as a Kremlin drive to bring Russia's super-rich business elite to heel and regain control over the "commanding heights" of the economy lost in the privatizations of the 1990s.
"The steps we took today were done as a last resort to preserve the rights of our shareholders, employees and customers," YUKOS CEO Steven Theede said in a statement.
Russia's State Property Fund said preparations for Sunday's auction were going ahead as planned. State-controlled gas monopoly Gazprom is expected to win the contest and is lining up record financing for its bid.
"Our plans are unchanged because we evaluated all possible risks when we decided to bid for Yugansk," said Alexander Stepanenko, a spokesman for Gazprom's oil unit Gazpromneft.
The Texas court was due to hold an emergency hearing on YUKOS' Chapter 11 bankruptcy filing at 11.15 a.m. (1715 GMT).
A source familiar with the filing said a ruling on whether to approve or deny a worldwide restraining order on the Yugansk sale could be made on Wednesday.
But lawyers -- and even its main shareholder -- were unsure the gambit would win YUKOS a stay of execution. Three of YUKOS' independent directors quit on Wednesday, suggesting a possible board rift over the filing.
WORLDWIDE JURISDICTION
YUKOS was granted the hearing on its filing for Chapter 11 -- designed to give firms breathing space to restructure -- by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
The filing, obtained by Reuters, states that YUKOS' current assets total $12.3 billion while its debts are $30.8 billion.
YUKOS argues that U.S. law has worldwide jurisdiction as it has major business dealings in Texas and Chief Financial Officer Bruce Misamore, who signed the filing, is now based there.
The last-ditch bid to stave off the breakup of Russia's top oil exporting company won qualified backing from Khodorkovsky's holding company, Menatep. "We support it," said Menatep director Tim Osborne in London, adding: "I still think that the auction will go ahead and that it (Yugansk) will be sold at the price that everybody's talking about in the press."
The source familiar with the filing forecast two scenarios if the Houston court grants the restraining order: either the Russian authorities will ignore it, or they and the bidders will petition the court to overturn it.
If the court upholds the order, then bidders for Yugansk and their financiers could be sued in the U.S. courts to prevent the sale from completing, the source added.
"The Chapter 11 filing could faze the bidders. They may get nervous. It's upping the stakes," the source told Reuters.
Lawyers said the U.S. court would probably regard the case as within its jurisdiction. "Americans will take worldwide jurisdiction on very minimal grounds," said Gabriel Moss, an insolvency and restructuring barrister in London.
But another lawyer said Russia would probably ride roughshod over any decision in favor of YUKOS.
"I don't think they have a chance of freezing the asset sale process," the lawyer said. "If YUKOS tried to freeze that process then the Russian government would step in, for example to nationalize the company."
GAZPROM SEEN THE WINNER
YUKOS' petition seeks to restrain the government, bidders and financiers from participating in the sale of Yugansk, which produces 60 percent of YUKOS' 1.7 million barrels per day of oil.
Uncertainty over the auction's outcome has led YUKOS -- which pumps nearly a fifth of Russia's oil -- to be dropped from Russia's January oil export schedules, stoking market concerns over possible supply disruptions.
Meanwhile Gazprom, the only declared bidder, is syndicating Russia's largest ever loan facility of around 10 billion euros via ABN Amro, BNP Paribas, Calyon, Deutsche Bank, Dresdner Kleinwort Wasserstein and J.P. Morgan.
Once Russia's largest listed firm, YUKOS is now worth less than $2 billion, down from a peak of over $40 billion last year.
Its shares slumped by 16 percent to 20.02 roubles ($0.72), their lowest since July 2000, triggering two suspensions of trade, before rallying to stand 1 percent down in late Moscow dealing. (Additional reporting by Tom Bergin and Gerard Wynn)
news.yahoo.com
Unbelievable on SO many levels. Add this flagrant attempt to violate Russian sovereignty with the farce in Ukraine and neo-con support and funding for 'Chechyn Terrorists' (Lord knows what they really are) and Putin looks less like an autocrat and more like somebody who is not about selling Russia off to the highest bidder.
