Coming to America (to Die)

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You know your country is messed up if people don't even want to die there, much less live there.

On Wednesday, Russia's erstwhile oil giant, Yukos (Pink Sheets: YUKOY), attempted to commit corporate suicide in Houston, Texas, before Russia's government could kill it.

The company filed for Chapter 11 bankruptcy protection from its creditors with the U.S. Bankruptcy Court, asking Bankruptcy Court Judge Letitia Clark to enjoin Russian tax authorities from auctioning off Yukos' crown jewel subsidiary and the source of two-thirds of its oil production -- Yuganskneftegaz. Russia is attempting to sell the unit for a starting bid price of $8.65 billion to raise funds to satisfy its monster tax liability claim against Yukos, which at last count had reached $27.8 billion and was still growing.

Judge Clark is expected to rule on Yukos' request later today, less than three days before Yuganskneftegaz goes on the auction block on Sunday. Scant time indeed for Yukos to do anything to abort the sale, even if it prevails in a U.S. court. What's worse, there appears to be precious little that Yukos can hope to achieve by winning an injunction here. The U.S. and Russia have not signed any bilateral treaty agreeing to recognize and enforce each others' court decisions.

Therefore, after winning a favorable decision in the U.S., Yukos would still need to go back to Russia and find a court willing to recognize and enforce the U.S. decision. So, essentially, after winning in the U.S., Yukos would have to retry the entire case in Russian court. If there had been any hope of succeeding that way, it seems likely that Yukos would have filed for bankruptcy in Russia in the first place.

So why is Yukos wasting its time in Houston?

An article in yesterday's Moscow Times may provide the answer. Right now, everyone expects that Russia's Gazprom (OTC BB: OGZPF) will be the winning bidder in Sunday's auction. But even at the bargain-basement price of $8 billion and change, Gazprom is going to need to look abroad for a source of cash to fund its purchase. The Moscow Times reports that several international banks have already volunteered to finance Gazprom's buy, among them: J.P.Morgan Chase (NYSE: JPM), ABN AMRO (NYSE: ABN), and Deutsche Bank (NYSE: DB). All three of these banks do business in the U.S. and might therefore be scared away from the deal if a U.S. court declares it illegal. If that happens, and Gazprom is unable to find the cash to buy Yuganskneftegaz on Sunday, it may effectively stop the subsidiary's sale even if the Houston court's decision can't technically be enforced against Russia.

Read all about YUKOS' tribulations in:

• YUKOS' American Brain Drain
• Death and Taxes in Russia
• Russia Names Its Price
• ConocoPhillips Looks East
• YUKOS: From Dismal to Worse
• Russian Market in Gulag
• YUKOS' Slippery Situation

Fool contributor Rich Smith has no position in any company mentioned in this article.