Skadden helps Deutsche contest Yukos Chapter 11

The London office of Skadden Arps Slate Meagher & Flom is going into battle on behalf of Deutsche Bank in an attempt to dismiss a US bankruptcy claim by embattled Russian oil giant Yukos.

Skadden’s London team initially won the role to act for Deutsche in the investment bank’s capacity as financial adviser to energy company Gazprom when it proposed a bid for Yukos’s main production asset Yuganskneftegas.

However, last December, Yukos filed for Chapter 11 bankruptcy in Houston and obtained a temporary restraining order, effectively blocking Gazprom from taking part in the auction and barring Deutsche from lending money to Gazprom for a bid.
Yuganskneftegas was then sold to another Russian company, Rosneft.

A hearing, set for 16 February, will hear arguments as to whether the Chapter 11 filing should be dismissed, with leading Texan law firms set to take the stage. Fulbright & Jaworski, led by partners Mark Baker and Zack Clement, is advising Yukos, while Michael Goldberg, litigation head at Baker Botts, is acting for Gazprom parent Gazpromneft.

The case marks the first time Baker Botts has been instructed by Gazpromneft, with the firm’s Moscow, London, Houston and Washington DC offices all working on the matter.

Yukos has sought to compel the Russian government to take part in the Houston hearing on 16 February, but Russia is refusing to acknowledge the jurisdiction of the US court. Ahead of an expected forced sale of Yukos’s parts, the company has also threatened legal proceedings against any company or country dealing with its assets.
Skadden has instructed Texan firm Andrews & Kurth to assist in the hearing.

Interestingly, Skadden counts among its most high-profile London clients Roman Abramovich, who is a majority shareholder
in Russian oil company Sibneft. Skadden advised the shareholders of Sibneft on merger negotiations with Yukos.

Goldberg said: “Yukos is trying to use a US court to dictate not only what Russia can do, but also what any other country can do. The arrogance of Yukos is unbelievable.

“It makes us the laughing stock of the world if a US court assumes jurisdiction to oversee a fight between a Russian company and the Russian government.”