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. Last Updated: 07/27/2016

U.S. Judge Deals Blow to Yukos

HOUSTON -- A U.S. bankruptcy judge dealt a blow to Yukos' bankruptcy case, ruling that the embattled Russian oil company cannot seek information about whether oil monopoly Gazprom illegally took part in the sale of Yukos' main oil producing unit.

In her ruling, U.S. Bankruptcy Judge Letitia Clark backed Gazprom's former unit Gazpromneft and said Yukos fact-finding must be limited to issues related to whether the U.S. court has jurisdiction in the case.

Yukos made its surprise bankruptcy filing in Houston last month in a bid to halt the sale of its Yugansk unit, which Russian authorities auctioned off in their efforts to recoup part of more than $20 billion in outstanding taxes the government says Yukos owes.

The court will listen to arguments in a two-day hearing, beginning Feb. 16, on whether to continue the bankruptcy proceedings or throw the case out of the U.S. court.

Yukos lawyer Zack Clement had argued that Gazpromneft violated the court's rulings by taking part in the December auction of Yugansk.

"This court has inherent authority to inquire into people who violate your orders," Clement told the judge.

Gazpromneft lawyer Michael Goldberg said Yukos had wrongly brought the case to the United States and that the court must rule on the jurisdictional issues before considering the merits of Yukos claims against Gazpromneft, its consortium of banks and the Russian government.

Yukos has previously argued in court that Russian authorities illegally levied the tax bill against the company.

Gazpromneft was tipped to win Yugansk in the auction before the U.S. court barred it and its banks from participating in the sale.

Yugansk was bought for $9.4 billion by an obscure Russian group, Baikal Finance, which was in turn bought by state-run oil producer Rosneft.

Rosneft is being folded into Gazprom, although Russian officials have said the Yugansk operations would remain separate.

Yukos contended that by putting up a $1.2 billion deposit and attending the auction on Dec. 20 in Moscow, Gazpromneft violated the U.S. court's orders, even though it did not bid.

Yukos plans to seek $20 billion in damages from Gazpromneft, which Clement said was being directed by Gazprom.

The motion to dismiss the bankruptcy case was filed by Deutsche Bank, which said in its filing that Yukos had no operations or employees in the United States before the December arrival of chief financial officer Bruce Misamore.