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Moscow court declares Yukos bankrupt

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Moscow's Arbitration Court declared Russian oil company Yukos [RTS: YUKO] bankrupt Tuesday.
MOSCOW, August 1 (RIA Novosti) - Moscow's Arbitration Court declared Russian oil company Yukos [RTS: YUKO] bankrupt Tuesday.

The court ruling upholds a vote by Yukos creditors on July 25 to recognize the company bankrupt and start liquidation procedures.

Drew Holiner, a lawyer for the battered oil company, said at the close of the hearing that Yukos intended to appeal to a higher court against the ruling, which he called a death sentence for the company.

The parties in the case have, in accordance with the Russian law, 30 days to appeal the verdict.

Earlier Tuesday the company had filed a lawsuit to the arbitration court against the creditors' vote to declare bankruptcy.

The liquidation would end years of legal proceedings against Yukos that have saddled the company with billions of U.S. dollars in back taxes.

The Yukos creditors had voted against placing the debtor under external administration, and against the company management's financial restructuring plan.

Eduard Rebgun, formerly the Yukos temporary manager and now the court-appointed receiver, said cash raised from the sale of Yukos assets would not cover the crude producer's court-recognized debts.

"The company's financial restructuring is impossible, and therefore we recommend the company to initiate liquidation procedures," Rebgun said.

Rebgun valued the company's property and assets at 581.33 billion rubles (about $21.5 billion) but said the company's proceeds would total 417.15 billion rubles (about $15.4 billion) after the assets sale and tax payments.

The company's liabilities recognized by the court total 491.58 billion rubles (about $18.2 billion), Rebgun said.

Yukos chief executive Steven Theede resigned July 20 just before the original creditors' meeting, which was then adjourned until today.

Theede, a U.S. national, was supposed to present a plan for the company's financial recovery via video link-up at a conference with the company's board, but refused to join a process that he said would be attended by people intent on "destroying" what was left of Yukos.

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