Moscow court orders bankruptcy supervision for embattled Yukos oil company
MOSCOW – A Moscow court ordered bankruptcy supervisors to take responsibility for oversight of Yukos on Tuesday as the company that was once Russia’s largest oil producer appeared increasingly likely to be declared insolvent.Judge Pavel Markov of the Moscow Arbitration Court ordered the oversight and set a June 27 date for the next session to consider whether to make a formal ruling that the company is bankrupt.A consortium of Western banks sought to have Yukos declared bankrupt after it defaulted on nearly half of a $1 billion syndicated loan arranged three years ago by Societe Generale SA with Deutsche Bank AG, Citigroup Inc. and HSBC PLC.The two court-ordered supervisors will essentially monitor all the company’s operations until the next session to ensure that no major transactions take place that could be used reduce the company’s already depleted value.After the session, Yukos lawyer Drew Holiner said the judge’s order was a foregone conclusion. He also said the company had ample funds to pay some of its debts, but that previous court-ordered freezes had tied up assets that could have been sold to raise the cash.”Even if Yukos wanted to sell its assets and pay the debt, it can’t, due to the claims of the bailiffs,” Holiner said.Markov earlier accepted a motion by state-controlled oil company OAO Rosneft, which had claimed it had acquired the rights to Yukos’ $482 million debt from the banks. Yukos lawyers had challenged the Rosneft motion and said they needed more time to analyze the debt arrangement between the banks and the company. They said they had received a copy of the arrangement only on the eve of the proceedings.The bankruptcy hearings are likely to be the closing chapters on Yukos, which was built up by billionaire Mikhail Khodorkovsky to become Russia’s biggest oil producer before his arrest and conviction and the company’s dismantlement.Analysts say that Rosneft, which took over Yukos’ biggest oil fields after a state-ordered auction in December 2004, is poised to snap up the remainder of Yukos’ assets as collateral to pay off the outstanding debt.Khodorkovsky is serving an eight-year sentence for fraud and tax evasion in a Siberian prison camp. Observers say the criminal case against him, and the related back tax case against the company, were punishment for his political ambitions and a step to reassert state influence over Russia’s strategically important oil sector.The creditor banks filed suit earlier this month to have Yukos declared bankrupt because the company defaulted on the loan. The validity of the filing was unclear, however, after Yukos issued a statement earlier this month saying that the Western banks had agreed to sell the debt back in December to Rosneft.Rosneft is itself seeking billions of dollars from Yukos, alleging the company stripped profits and evaded taxes at the former Yukos production unit Yuganskneftegaz, which Rosneft acquired after the 2004 auction that was held against the company’s $28 billion in back tax debts.Yukos has said it still has to pay $6.3 billion of that tax bill and is disputing a new $3.5 billion bill for 2004.According to company data, Yukos owes nearly $6 billion to two companies that may be affiliated with it, the bank said – Yukos Capital and Yukos Trade – and may try to prove that these claims take priority over those of the foreign banks, tax authorities and Rosneft.
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