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12/17/2004:

"Court Seen Lifting YUKOS Block - - Lawyers"

LONDON (Reuters) - A U.S. bankruptcy court is likely to revoke its temporary ban on the sale of Russian oil group YUKOS's main production unit, lawyers said on Friday.

A U.S. bankruptcy court issued an injunction on Thursday against prospective bidders and bankers involved in the planned auction of Yuganskneftegaz after YUKOS asked for Chapter 11 bankruptcy protection, but Russia said on Friday it would go ahead with Sunday's sale anyway.

State-backed gas monopoly Gazprom is widely expected to win the auction, which YUKOS says undervalues its key asset.

Someone can apply to block the U.S. restraining order only if they are connected with YUKOS, lawyers said on Friday, but some of Gazprom's financial backers, led by Deutsche Bank, fit this bill because they are also YUKOS creditors.

``I think Deutsche Bank and other banks will go to the U.S. court and say this restraining order isn't going to work,'' said a source close to YUKOS creditors.

``I suspect the U.S. court will find a graceful way of finding an order capable of working.''

Gazprom's financial backers, which also include ABN Amro, BNP Paribas and J.P. Morgan, are affected by the U.S. restraining order because some are Securities and Exchange Commission-registered and all have U.S. places of business, which means they could be exposed to court action if they finance a bid for Yugansk in breach of the U.S. restraining order, lawyers say.

But a creditor request to lift the U.S. court's restraining order on the Yugansk sale would probably be successful, lawyers said.
Full Article: nytimes.com/reuters