Legal Victory for Yukos Shareholders

From the Financial Times:

Dutch give hope to Yukos investors By Neil Buckley in Moscow More than 50,000 shareholders of Yukos may finally be able to receive some compensation for their losses after the last material creditor of the bankrupt Russian oil company was paid $850m by a Dutch subsidiary.

Moravel Investments, a subsidiary of GML – the former Yukos parent company – was paid almost $850m out of Yukos foreign assets held in Dutch subsidiaries and under Dutch law on March 14, after a Dutch court on March 6 held that it was a legitimate creditor.The Dutch court also rejected claims by Rosneft, the state-controlled Russian oil group, against the same assets on the basis that its claims had been paid in full during the forced Russian bankruptcy process of Yukos that began in 2006.Yukos came under assault by the Russian authorities in 2003 in what many Russian and international observers saw as a politically motivated case against its chief executive and founder, Mikhail Khodorkovsky.It was eventually bankrupted to pay off $28bn of tax claims and penalties, the majority of its assets being acquired by Rosneft. Russian authorities have insisted the case was legitimate.The amount paid to Mora-vel represented the unpaid balance on a $1.6bn loan made to Yukos in 2003 that was denied repayment during the bankruptcy process.The Dutch ruling and payment could open the way for the remainder of an estimated $2bn-worth of Yukos assets in the Netherlands to be used to compensate shareholders.”There is more to be done but we are now in a strong position to begin to determine how to compensate Yukos . . . shareholders both inside and outside Russia who lost their entire investment as a result of the Russian Federation’s illegal expropriation,” said Bruce Misamore, Yukos’ former chief financial officer.He added that work was under way to develop a model for fairly compensating shareholders, but warned any compensation was likely to be a “small percentage of the huge losses incurred”.