Yukos Oil Seeks Bankruptcy Protection in U.S.

Russian oil giant Yukos took the unusual step of filing for bankruptcy protection in U.S. courts Wednesday and petitioned a federal judge in Houston to block the forced sale of the company’s leading oil subsidiary in Siberia.

In a desperate move to forestall its breakup over the next few days, Russia’s second-largest oil company made a last-ditch appeal under American law. The Yukos Oil Co. sought a restraining order to prevent Russian tax authorities from auctioning off its largest production facility, Yuganskneftegaz.

U.S. Bankruptcy Judge Leticia Clark scheduled a hearing for this morning.

Analysts said it was unlikely but not impossible that U.S. courts would assert jurisdiction in a fight between a Russian company and the Russian tax authorities.

It seemed even less likely that Russian officials, already miffed at U.S. pro-democracy activism in neighboring Ukraine, would obey an American judge’s order to halt what some see as a plan by President Vladimir V. Putin to reassert state control over Russia’s vast oil wealth.

“The steps we took today were done as a last resort to preserve the rights of our shareholders, employees and customers. Unfortunately, we believe it was the only resort left for us,” Yukos chief executive Steven Theede said in a statement from Houston, where he and other company senior executives were working in an apparent attempt to avoid arrest in Russia.

In court filings, Yukos accused the Russian government of driving down the value of the company from $40 billion to $2 billion in less than six months by asserting that more than $27 billion in back taxes was due and then preparing to sell the company’s core asset to a state-run gas company for a fraction of its value. The company labeled the campaign “expropriation.”

“Our management board made the decision we had to file bankruptcy in Houston because our company is being rendered insolvent by unlawful Russian government actions which ... have destroyed billions of dollars of value for investors,” many of them American, Chief Financial Officer Bruce Misamore said in an affidavit. Misamore and Theede are Americans recruited by the company in recent years.

Russian prosecutors broke their silence on the year-old case against Yukos and several of its executives, accusing the company of “filthy theft.”

“The arrogant and outrageous manner in which billions of dollars were stolen stuns even the most experienced prosecutors and investigators,” the prosecutor-general’s office said in a statement. “The sums of stolen money, property and unpaid taxes are reaching astronomical amounts.”

The latest legal move comes as the company fights for survival. Russian authorities have scheduled for Sunday the sale of Yuganskneftegaz, the heart of Yukos’ business empire. According to outside estimates, the subsidiary, which produces more than 1 million barrels of oil a day in Siberia, is worth as much as $18.6 billion. However, the government has set a minimum bid of $8.65 billion.

The Russian state-controlled gas giant, Gazprom, is widely expected to win the auction. Two little-known companies have also submitted bids.

In its court petition, Yukos says the Russian court system lacks independence from the Kremlin. It is asking the American court to halt Sunday’s auction and order Gazprom and its financing banks not to bid on Yuganskneftegaz.

Yukos lawyers assert that the company’s business operations in the U.S., together with the large number of American investors affected by the tax case, are sufficient to give U.S. courts jurisdiction in the case.

Gazprom spokesman Alexander Stepanenko said the court filing would not affect the company’s plans.

“It is not our problem. No one has canceled our instruction to bid in the auction,” he said.

Spokesmen for the Russian Federal Property Fund and the Justice Ministry said they would not comment.

Mikhail Delyagin, chairman of the Institute for Globalization Studies in Moscow, said that an order from a U.S. court would have no force in Russia, but that the court could freeze bank accounts outside Russia or halt Gazprom shipments to Europe.

“It is quite possible that Gazprom assets in some offshores may be frozen and some property abroad seized,” he said. “And since formally Gazprom is a state-owned company, theoretically these actions may be even projected from Gazprom to Russia as a state.”

James Mandel, a business lawyer with Ernst and Young Legal Services in Moscow, said U.S. bankruptcy law could cover companies with tenuous business connections to the U.S.

“Basically, any company doing business in the United States, even though it is a foreign company, and even though most of its business activity is outside the U.S., can apply for bankruptcy protection,” he said. “It’s what we would call a low jurisdictional hurdle.”

If Gazprom were to proceed with a purchase of Yuganskneftegaz despite a U.S. court order, Mandel said, the company’s assets in the U.S., and possibly in Europe, could be seized.

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Times staff writer Sergei L. Loiko contributed to this report.