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by John Helmer, Moscow

Every year for fifteen years now, Bruce Misamore, David Godfrey, and Steven Theede have been paid millions of dollars in lawyer and manager salaries, bonuses, and travel expenses by the men who weren’t in Russian jail with Mikhail Khodorkovsky (lead image, left);  and then when he got out, by Khodorkovsky too. The objective of them all was to sue the Russian Government for the convictions and penalties for tax evasion, fraud, asset stripping, money laundering, corruption  and thuggery on which the Yukos oil company thrived until Khodorkovsky was arrested in October 2003 and the oil company subsequently bankrupted, nationalized, and then reprivatized as Rosneft.

After years of court cases in the US and Europe, the original Yukos group won a compensation award of $50 billion for loss of their oil assets, foregone oil income and interest. This was a record amount, but it’s a figment — an amount that will never be paid by the Russian Government nor collected by Khodorkovsky and his men. Their attempts to seize Russian state assets in France, Belgium and elsewhere in Europe and hold them hostage for the money have also come to nought.

At the same time, the Yukos group have been aiming to dig up the real money they figured they had a better chance of taking and spending. This was almost $2 billion Khodorkovsky had concealed abroad behind trusts and front companies in The Netherlands, Isle of Man, Cyprus, Gibraltar, and other hiding places. After more than thirty court cases over almost fifteen years, Khodorkovsky has now taken as much of the readies as he can, along with his comrades Mikhail Brudno and Leonid Nevzlin in Israel. Altogether, about $1.2 billion.  

That has left Misamore, Godfrey and Theede in California, Texas, and Hawaii feeling short-changed. So Godfrey and Theede decided to take what they could from Misamore.

Last month, just six days after Godfrey was judged in a London court to be a liar and a dishonest schemer, Misamore launched a lawsuit in the New York State Supreme Court. He’s now accusing Godfrey and Theede, and two of their lawyer friends, of helping themselves to what he thinks of as his share of the Yukos loot. The amount Misamore is trying to recover is $13.5 million.

For that amount, and at the risk of spending a third of it on legal fees, Misamore is signalling not only Godfrey and Theede, but also Khodorkovsky himself, that he’s willing to tell all he knows. This is the first time in a court of law outside Russia that the truth about Khodorkovsky may be revealed by one of his most trusted Americans.  

Originally from Ohio with accounting and management degrees and a start at the Pennzoil and Marathon Oil companies in Texas, Misamore, now 69, was appointed by Khodorkovsky as the chief financial officer of Yukos in 2001.  After Khodorkovsky’s arrest in 2003 and subsequent conviction and imprisonment, and the collapse of Yukos, Misamore says he “worked diligently and effectively for the past fifteen years as a leader of the successful effort to protect the international assets of Yukos Oil Company (‘Yukos Oil’) from Russian expropriation.”

Working with him in Moscow were Steven Theede, a Kansas-trained executive at Conoco, who was chief operating officer of Yukos at the time of Khodorkovsky’s arrest;  and David Godfrey, a lawyer who started at  Yukos in 2002 and was chief counsel in 2005

Left to right: Bruce Misamore, Steven Theede, and David Godfrey.

In mid-2006, the trio were charged by Russian prosecutors with running for Khodorkovsky and his co-shareholders in Yukos an asset stripping and money-laundering scheme, transferring Russian property to offshore havens. The official indictment said they had “through abuse of office, stole and legalized entrusted property, thus inflicting serious damage to the part of Yukos Russia.” 

Sources inside Yukos, and subsequent company files, corroborate the illegal stripping. The evidence against the three Americans has not been tested or proved in an international court.  Last month, however, in the London High Court, Godfrey, with the old Yukos shareholders behind him, was judged to be a liar and a dishonest schemer. For that story, read this

From asset stripping at Yukos headquarters, Misamore, Theede and Godfrey turned to bounty-hunting with the offshore assets. In  the court papers filed on October 14, Misamore now says “he worked… with Defendants [Godfrey and Theede] both individually and as co-directors of Dutch entities created to shield Yukos Oil’s international assets from the Russian State and to preserve their value for Yukos Oil’s former shareholders. So far that work has generated over one billion dollars in recoveries for former Yukos Oil shareholders.”

Read the 25-page court claim here.

According to Misamore, in 2011, with Khodorkovsky in jail and his co-shareholders in Israel, a scheme was agreed for  “a bonus agreement (the ‘Initial Agreement’). Under the Initial Agreement, GML [Group Menatep Limited, a Gibraltar holding entity for the offshore assets] agreed to pay bonuses of 10% of any amounts it recovered through the Dutch entities, with the stipulation that any and all bonuses must be paid from this 10% pool. Misamore was allocated 32.5% of the pool, Godfrey 32.5%, Theede 20%, Fleischman 7.5%, and de Guillenchmidt 7.5%, subject to adjustment by GML for subsequent events affecting the individuals’ relative contributions to the results.” Marc Fleischman, an American friend of Godfrey’s, and Michel de Guillenchmidt, a Frenchman,  are lawyers who worked for Godfrey and Theede to advise the offshore entities after the Yukos collapse.

Misamore says the first agreement on bounty-hunting was decided at his home in Houston, Texas, with Mikhail Brudno (right), one of Khodorkovsky’s co-shareholders living in Israel; Khodorkovsky was in prison at the time. The offer was made by Brudno, “one of the principal indirect shareholders of GML…Brudno proposed that GML.pay Misamore and Defendants a bonus calculated as a percentage of any money GML recovered through the Foundations on behalf of the former Yukos shareholders it represented.”

The Texas negotiation was followed a few weeks later, in June 2011, with a meeting in New York City. Misamore now claims in the Manhattan court that “venue is proper in this county because a substantial part of the events giving rise to the claims arose here.” This may be disputed; there has been no court response yet from the lawyers representing Godfrey, Theede and the others.

Extract from the Supreme Court current case docket:  http://iapps.courts.state.ny.us

Misamore reveals that this scheme of Brudno’s covered only a part of the elaborate offshore shareholding pyramid and pipeline through which Khodorkovsky had removed Yukos’s assets, cashflows and dividends from the Russian operating units to entities he created offshore. Group Menatep Limited (GML) was a Gibraltar front. Other sources confirm that  Khodorkovsky and his partners concealed their stakes in GML in individual trusts – Palmus and Pavo for Khodorkovsky until he went to jail; Mensa (Platon Lebedev), Auriga (Brudno), Pictor (Leonid Nevzlin), etc. 

GML controlled Hulley Enterprises, a Cyprus entity, Veteran Petroleum Limited, also registered in Cyprus, and Yukos Universal of the Isle of Man. The three front companies were reported in a federal US magistrate’s ruling of February 2019 as holding 70% of Yukos.  

In addition, Khodorkovsky had created a parallel scheme for both the oil and non-oil assets he had been convicted in the Russian courts of stripping.  An Armenian company called Yukos CIS owned a Dutch entity called Financial Performance Holdings (FBH); together, they held more than $400 million worth of assets.

At the same time, a Dutch scheme was created to own non-oil assets through Yukos Finance and another Dutch entity; the asset value under their control was between $1 billion and $2 billion. Both the Armenian and Dutch pyramids were then moved under the umbrella of two Dutch trusts (stichtings). Through these trusts,  Misamore and the other Americans, plus an English lawyer, Timothy Osborne, have litigated to turn Khodorkovsky’s offshore corporate pyramids and paper-chains into ready cash.

The records of the Dutch, European tribunal and other court cases which Khodorkovsky, Brudno, and Leonid Nevzlin (right), the original Yukos shareholders, have directed to win the $50 billion award for the oil assets, don’t reveal precisely what shares Khodorkovsky and the others held. The $50 billion distribution rulings have identified Hulley as holding a 56.3% stake in Yukos; Veteran with 11.6%; and Yukos Universal with 2.6%.   Nevzlin has been convicted in Moscow of murder and attempted murder during the Yukos oil asset  operations in Russia.  Some of the records suggest Nevzlin has held a 70% stake in the Group Menatep (GML) holding, but how much of that he held in trust for Khodorkovsky in prison, and how much now, aren’t clear.

In a US District Court (Washington, DC) deposition of April 2016, Dmitry Gololobov, a long-serving lawyer inside the Yukos group, reported  that “Mr. Khodorkovsky was the primary decision-maker for all major projects, and served as Chairman of the Board for both Bank Menatep and Yukos. He also reviewed the draft budgets for Yukos and for the whole corporate group. Mr. Nevzlin was also involved in decision making…He was First Deputy Chairman of Bank Menatep, and a Vice President at Yukos, and was responsible for political matters, including both government relations and public relations. Mr. [Platon] Lebedev was the Deputy Chairman of Bank Menatep and responsible for the Oligarchs’ offshore structures, such as GML, and so was external to Yukos and had an office outside of Moscow. Mr. [Vladimir] Dubov and Mr. Brudno were both members of the Board of Directors for Bank Menatep. Mr. Brudno was the Vice President in charge of “Yukos RM,” which was responsible for refining and marketing at Yukos, and also held other positions at various times.”

Left: Dmitry Gololobov at Yukos in Moscow, 2004; centre, Platon Lebedev, after his release from prison in 2014; right, Vladimir Dubov in Israel after he fled Moscow in 2003. It is Gololobov’s testimony that Khodorkovsky and his partners “conspired with certain Yukos managers to transfer Yukos assets into two Dutch stichtings in order to shield them from legitimate creditors (such as foreign banks and the Russian tax authorities)”. Gololobov adds that Misamore was responsible "to move certain Yukos assets outside of the reach of Russian tax authorities. This operation involved the creation of two Dutch foundations known as stichtings in 2005. Mr. Misamore, Mr. Theede, and Mr. Godfrey then named themselves as the directors of these stichtings, and transferred Yukos assets worth billions of U.S. dollars into the stichtings."

For the international court and arbitration tribunal rulings in the fight over Yukos’s oil, start with this Dutch court summary.   For the subsequent failure of Khodorkovsky and his men to enforce the Dutch award in France, read this.  Two federal US court judgements in 2016-17 against the Yukos group in their pursuit of a former employee and leaker, Daniel Feldman, can be read here  and also here. For the most recent US federal court summary of the cases, click to read

The key to the Russian Government’s rejection of the $50 billion award is the legal doctrine of “unclean hands”.   Khodorkovsky and his men had run a criminal conspiracy to bribe officials as they stole the oilfield assets, then evade tax by fraud, and launder the profits abroad in illegal asset concealment schemes. Upon their conviction for these crimes, the Russian case has been that no international investment protection treaty, the European Energy Charter, or human rights convention applies to the Yukos group, and no compensation can be paid to them under Russian law.

Misamore knows how the offshore schemes have been operated by Khodorkovsky; for the moment he isn’t telling.

According to Misamore’s New York court filing, there was a falling-out between the group of bounty-hunters – himself, Godfrey and Theede  – and between himself and the control shareholders. Is the bird in the hand worth two in the bush? – this was the point of their disputes. That’s to say, Misamore wanted to keep litigating, on Khodorkovsky’s tab, for big money settlements. The others wanted to settle without further delay, and pocket as much cash as they could get. Misamore lost the argument.

He now alleges a fresh deal was negotiated in September 2015. “Defendants agreed to the proposed amendment at a meeting in New York City on September 16, 2015. On September 18, based on his understanding that GML and Defendants had agreed to the amendment, Misamore agreed to resign from all Yukos entities, including Yukos Finance.”

In addition to the promised bounties, Khodorkovsky and the Yukos group have been paying substantial salaries for Misamore (until 2015), Godfrey and Theede; about $2 million per year in fees for Godfrey, he has publicly acknowledged.  

Godfrey is listed in the New York court papers as living at an address in Tiburon, California (top photograph), estimated to be worth $4.3 million; he also has a vacation home in Honolulu, Hawaii, which he bought in 2006; it’s now worth about $3.5 million.  Theede has been identified in the court papers as living at this Houston, Texas, house (below), worth about $3.9 million, though it is losing value in the current market. “Dog friendly”, reports a local realtor. In 2008, Theede was reported to be ending his residence in New York by selling an apartment at the Plaza Hotel in Manhattan for which he had paid $8 million in 2006. 

Source: https://www.sothebyshomes.com/

Misamore is reported in the court papers to be running his business from this home in Houston, Texas. It is currently valued at $1.1 million, significantly less than the real estate assets of Godfrey and Theede.  

Misamore now accuses the others of enriching themselves in a conspiracy to violate the 2015 agreement and cheat him. His calculation is that in the settlement of the Armenian scheme claims, $400 million in offshore cash was released for distribution. $154 million has gone to Khodorkovsky and his partners; $246 million has gone through GML of Gibraltar to the shareholders. Of the second amount, Misamore says the 10% bounty was $24.6 million; he says he received a payment of $8 million, according to the 2015 terms.

But then a much bigger cash cache in The Netherlands was opened. This was $800 million, which had been frozen until the Dutch Supreme Court ruled in Khodorkovsky’s favour on January 19, 2019.  Misamore says $300 million of this money was paid to the shareholders outside the GML pyramid; GML took $500 million. According to Misamore, the 10% bounty of $50 million should have been divided up, so that his payment, 32.5%, would have been $16.25 million.

The others stiffed him, he says. “This is an action for breach of contract or, in the alternative, tortious interference with contract or unjust enrichment. Defendants took for themselves millions of dollars that should have been paid to Plaintiff.”

“It came as a great surprise to Misamore,” he told the court, “when he contacted Osborne [lawyer for GML] about the 2019 bonus payment and was told that the Foundations [stichtings] had already ‘re-allocated’ the 10% Pool for the Dutch Foundation distribution. According to Osborne, the Foundations had decided that Misamore would receive a scant 5.5% of the 10% Pool, or $2.75 million, and that Defendants (the Foundations’ Board members) would share the remaining 27% of the Misamore Carve-Out, or $13.5 million. Osborne said that Defendants had initially intended to pay Misamore nothing. None of GML, the Foundations, or Defendants communicated anything at all to Minamore before Defendants ‘re-allocated’ the 10% Pool and paid themselves the lion’s share of the Misamore Carve-Out.”

Left, Marc Fleischman; in his website résumé he doesn’t mention his Yukos clients.  Right: Michel de Guillenchmidt. According to the New York Supreme Court filings, Fleischman and Guillenchmidt each took $7.1 million for themselves from Misamore’s bounty in a scheme of “unjust enrichment”.

Misamore says he is owed the difference between $16.25 million and $2.75 million – $13.5 million. “In purpose and effect, Defendants ignored the 2015 amendment to the Initial Agreement and violated every obligation the Amended Agreement imposes on them… Defendants’ breaches of the Amended Agreement caused Misamore injury. He has suffered damages as a result, for which he now seeks recovery.”

Misamore’s court papers to date don’t say so explicitly, though the email and letter exhibits imply that Khodorkovsky, Brudno,  Nevzlin and Lebedev have been giving the orders and are thus behind the conspiracy Misamore is alleging.

Sources, insiders who knew Khodorkovsky, Misamore and Theede,  say they don’t believe Misamore would risk the heavy legal costs of the New York lawsuit for the claim that is currently before the court. They suspect Misamore’s real target is Khodorkovsky himself.

Misamore was asked through his lawyers to clarify who are the shareholders behind the offshore schemes, what stakes they hold in the payoffs and bounties, and how much Khodorkovsky, Brudno,  Nevzlin and Lebedev have received to date. Misamore has not replied, yet.

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