Attorney Catherine Kowalewski told RFE/RL that her law firm has collected ample evidence that Yukos management intentionally misled investors through tax-shelter schemes. "Basically, as our complaint alleges, defendants created this network of shell companies to evade taxes," she said. "As it further alleges, they basically were able to use these shell companies to receive special, preferential tax treatment and that was to minimize their tax liability."
Kowalewski is an attorney with the California law firm -- Lerach Coughlin, Stoia, Geller, Rudman, Robbins -- that filed the suit against Yukos on 6 July in federal court in New York.
It's not yet clear what impact, if any, the U.S. case would have on the overall condition of Yukos, whose battle with Russian authorities has helped to destabilize world oil markets. Russian tax authorities claim the company owes the government as much as $10 billion in back taxes -- and has frozen the company's assets in lieu of payment. Yukos says it will have to sell assets to pay the bill or face bankruptcy.
Many in Russia say the case is politically motivated. They claim it's a chance for President Vladimir Putin to assert control over Russia's biggest oil producer and company founder Mikhail Khodorkovskii. Khodorkovskii is currently in jail in Moscow facing separate charges of fraud and tax evasion.
Laurent Ruseckas, the director of the Europe and Eurasia Practice at Eurasia Group, a New York-based research and consulting firm, said he believes the claims against Yukos are politically motivated and lack substance. "The only reason that it turned that bad for shareholders is because of the [Russian] government campaign against Yukos," he said. "So unless the [Russian] government starts to go after some other companies listed in the U.S. for the same practices, I don't see how there will be any grounds."
He added: "I think in a case like this you need to prove that this was a scheme to defraud shareholders. I just don't think that was what this is. Yukos was engaging in tax practices that at the time other companies in Russia were doing and they thought were legal. And of course the rules have changed. But you can't bring the suit against the Kremlin. So they are trying to bring suit against Yukos and its auditors and its managers."
Kowalewski agreed that there may be political issues in the case, but she said shareholders have a legal basis to sue Yukos management for its allegedly deceitful practices. "According to our complaint, I think we have very good allegations against Yukos," she said. "But from there there are just so many factors to say [what will be the outcome]. And even in a lot of cases there's always a chance for settlement, there are so many different motions that we have to get through, you really can't say [how long it will take]."
Kowalewski said the process will proceed slowly. It will be at least a year, she said, before the case gets to court and another two to three years before the trial phase. The first thing the judge will have to decide is whether the case has merit and who will be the lead plaintiff. The lead plaintiff is usually an institutional investor with significant holdings in the company.
Kowalewski declined to identify the largest U.S. stockholders in Yukos or the number of investors willing to join the suit. Several other big U.S. law firms are suing Yukos on behalf of U.S. shareholders. Their representatives did not respond to RFE/RL requests for comment.