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Last Updated: Friday, 18 March, 2005, 19:56 GMT
New US court setback for Yukos
Yukos HQ
Yukos is being pursued by the Russian state over tax bills
Russian oil giant Yukos has lost another round in its fight to seek US protection against the Russian state.

US District Judge Nancy Atlas rejected the firm's 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.

Slight US presence

"Yukos has not shown at this stage of the proceedings that the bankruptcy court abused its discretion when it found that cause existed to end Yukos' Chapter 11 case, or that the decision was based on clearly erroneous factual findings or any error of law," she wrote.

Texas Judge Letitia Clark had ruled earlier this year that Yukos did not have enough of a US presence to establish US jurisdiction.

"The vast majority of the business and financial activities of Yukos continue to occur in Russia," Judge Clark said in her ruling.

"Such activities require the continued participation of the Russian government."

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

'Unfriendly' forums

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 bank accounts and its chief finance 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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