Jan 4 2005
Bankruptcy experts in the US have reacted with astonishment to Russian oil company Yukos' successful filing for bankruptcy protection in Texas.

The Financial Times reports the ruling by a federal bankruptcy judge claimed jurisdiction over the bankruptcy of Yukos based largely on the fact that the company paid a retainer to a US law firm to represent it in the proceedings. Judge Letitia Clark used her power under bankruptcy law to enjoin global investment banks and Gazprom, the Russian state-controlled gas monopoly, from participating in the planned sale of Yukos assets, and a District Court subsequently refused an emergency appeal against that ruling. Legal experts said the ruling raised the prospect that any firm in financial distress, anywhere in the world, could open a small bank account in the US and use that to claim bankruptcy protection under US law.