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Last Updated: Wednesday, 23 March, 2005, 04:19 GMT
Yukos drops US bankruptcy appeal
Yukos HQ
Yukos is being pursued by the Russian state over tax bills
Russian oil giant Yukos has dropped its case for US bankruptcy protection from an asset sell-off ordered by the Russian Government.

Its statement said the firm "no longer has a reasonable prospect of obtaining relief under the US bankruptcy law".

But Yukos chief Steven Theede vowed to "focus our efforts elsewhere to survive" and obtain compensation for "improperly expropriated" assets.

The move ends several months of legal manoeuvring by Yukos in the US courts.

US District Judge Nancy Atlas last week rejected Yukos' plea for protection while it appeals against a decision not to give it Chapter 11 bankruptcy protection.

In February, a Houston court refused the Chapter 11 bankruptcy bid, sought by Yukos to stop the sale of its Yugansk division by the Russian authorities.

Judge Atlas said she was not convinced Yukos could win its Chapter 11 appeal. Texas Judge Letitia Clark had ruled earlier this year that Yukos did not have enough of a US presence to establish US jurisdiction.

'Unfriendly' forums

Mr Theede said on Tuesday a stay granted by the US courts helped preserve the value of Yukos' estate.

He said the company appreciated the "fairness with which it was treated by the United States Court".

Yukos sought a US court order to help prevent the sale of Yugansk, auctioned to help pay off $27.5bn (14.5bn) in unpaid taxes.

The business was bought for $9.4bn by a previously-unknown group, which was in turn bought up almost immediately by state-controlled oil company Rosneft.

Yukos had argued that a US court was entitled to declare it bankrupt before its Yugansk unit was sold, since it has local US bank accounts and its chief financial officer, Bruce Misamore, lives in Houston.

Yukos claimed it sought help in the US because other forums - Russian courts and the European Court of Human Rights - were either unfriendly or offered less protection.

Russia had indicated it would in any case not abide by the rulings of the US courts.

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