Blavatnik Background Complete

1.
Blavatnik is one of the worlds wealthiest men with a fortune estimated at
$19.6 billion by Forbes. He emigrated from Russia to the US as an adult. He
amassed this fortune primarily in the rigged privatizations of Russian natural
resource companies in the 1990s. In order to gain control of formerly state owned
assets worth well over $10 billion for very minimal investment, Blavatnik
maintained deep ties to the Russian government, including Russian intelligence
agencies such as the FSB; such ties included bribery of Russian government
officials in charge of privatization. For example, according to private investigators
hired by British Petroleum (BP), German Khan [Blavatniks fellow board member
at TNK] continues to take care of Vladimir Rushailo [former Russian Minister of
Interior] and Victor Kalyuzhny [former Russian Minister of Fuel and Energy].
Khan is alleged to have been paying each $30-50,000 per month. Khan keeps a
separate cell phone with a decoder that is used exclusively for communication with
Kalyuzhny.A Furthermore, Blavatnik has orchestrated violence and murder in
order to gain control of such assets and also bribed and intimidated judges in order
to vastly expand his empire.
2. In addition, he has extensive ties to individuals (akin to mafia associates)
who are significant shareholders and board members in all of his main investments
(including TNK and RUSAL) and who have been widely and publicly reported to
have orchestrated violence, murder, illegal arms shipments and coercion of the
Russian judiciary in order to expand their empires.

3. Blavatnik has continued to maintain his strong ties to the Russian
government in order to protect his fortune. This is evidenced by the fact that his
vast fortune has been totally untouched by the Putin government. This is in stark
contrast to the adverse actions taken by Putin towards many other Russian
oligarchs.
4. Public evidence of Blavatniks extralegal use of force has been widely
reported and has been alleged in numerous US court filings. For example, Fatigue-
wearing militiamen armed with AK-47 assault rifles stormed Yugranefts [an oil
company] corporate offices in June 2001, acting on the orders of Blavatnik,
Vekselberg and others and took control of the company according to BloombergB.
5. In a lawsuit related to the above, the complaint stated: Defendants
[including Blavatnik] accomplished their illegal takeoverby sending armed
private militiamen carrying AK-47 machine guns to storm Yugranefts corporate
offices and oil fieldC Further in the complaint, an associate of Blavatniks (German
Khan, who like Blavatnik was a board member and significant shareholder in
TNK), threateningly stated, we eliminate those who go against us.D
6. A court affidavit filed in the above situation by an expert on Russia stated,
Blavatnik, Victor Vekselberg, German Khan and Mikhail Fridman [the four main
shareholders of TNK]are among the most wealthy and powerful Russian
oligarchs. TNK is notorious for its aggressive (even by Russian standards!)
takeover tactics. It is understood to largely control the government and courts in
2
the Tyumen oblast and the Khanty-Mansiysk region. A source of partiality is
threats against judges or their families, if they render unsatisfactory decisions.
These threats can involve both physical harm and criminal charges brought by
compliant prosecutors based on manufactured evidence.E
7. In a similar situation where Blavatnik and TNK orchestrated the bankruptcy
and takeover of an oilfield controlled by BP, armed guards prevented the delivery
of a court order to delay it [the fraudulent bankruptcy]. It seemed unreal. John
Browne [CEO of BP] wrote in a 2010 memoir. We were a nave foreign investor
caught out by a rigged legal system.F An internal BP email related to the incident
stated we regard the entire bankruptcy process as invalidwe understand the fun
went right to the end [and we] were prevented by armed guards from entering the
Chernogorneft [BPs oil field] officesjust another day in Russia!G
8. In another chilling episode Blavatnik and his associates attempted to poison
the BP-appointed CEO of TNK, Robert Dudley, in order to intimidate him.H
9. According to The Economist, even Blavatniks fellow Russian oligarchs are
intimidated by his actions, If they just stuck to bribing judges, we could play that
game too, says one of TNKs may rivalsdisgusted by [TNKs] alleged resort to
the wicked stick of intimidation, rather than the harmless carrot of bribery.I
10. German Khan, a fellow board member and significant shareholder in TNK,
referred to The Godfather as a manual for life.J In reference to Khans habit of
3
openly bringing guns to meetings, a Western diplomat stated, Our companies
dont like people who bring guns to meetingsK
11. Oleg Deripaska is the largest shareholder in RUSAL (Blavatnik is the second
largest). Deripaska has a long history of using violent tactics to assemble RUSAL,
the worlds largest aluminum company. For example, in a complaint filed in the
Southern District of New York, he was accused of, directly or indirectly
[committing] criminal acts including murder, extortion, mail and wire fraud and
money laundering. Further, These acts include the attempted murder and murder
of American Felix Lvov.L Indeed, Deripaska was deemed so dangerous that he
was denied a visa to enter the US due to ties to organized crime.M
12. Leonid Lebedev is a Russian oil trader who provided Blavatnik with the
seed capital that allowed Blavatnik to participate in the privatization of TNK in
the mid-1990s. Similar to many of Blavatniks other associates, Lebedev is a
dangerous individual. For example, he is accused in an Italian criminal court of
shipping 30,000 AK47 Kalashnikov rifles, 400 guided missiles, 10,000 anti-tank
missiles and 32 million rounds of ammunition which were seized on a ship, the
Jadran Express, in Venice. In this venture, Lebedev was collaborating with
Russian and Ukrainian mafia, former KGB agents, politicians and a shadowy
syndicate.N The payments for this large arsenal were routed through Sintez,
Lebedevs company and the very entity which provided Blavatnik with the seed
money for the TNK privatization.
4
A
Exhibit A BP & Trident Memo on TNK, page 24.
B
Exhibit B Bloomberg Article (Blavatnik & Norex), page 2.
C
Exhibit C Norex Complaint, page 2.
D
Exhibit C Norex Complaint, page 9.
E
Exhibit D Norex Complaint (Black Affidavit), pages 4 & 5.
F
Exhibit E New Yorker Article (The Billionaires Playlist), page 12.
G
Exhibit F BP Email on Chernogorneft Seizure.
H
I
Exhibit G Economist Article (The Rules of War), page 2.
J
K
Exhibit G - Economist Article (The Rules of War), page 1.
L
Exhibit H Deripaska Complaint, page 2.
M
Exhibit I WSJ Article (Deripaska Denied Visa).
N
Exhibit J The Guardian Article (UK Bankers Link to Arms Plot)
5
Norex Wins Reinstatement of Blavatnik Oilfield Lawsuit - Bloomberg https://www.bloomberg.com/news/articles/2014-06-26/norex-petrol...
Norex Wins Reinstatement of

Blavatnik Oileld Lawsuit
Chris Dolmetsch
June 26, 2014, 3:24 PM GMT-4
Norex Petroleum Ltd. won reinstatement of a $1 billion lawsuit accusing

billionaires Leonard Blavatnik and Victor Vekselberg of using gunmen and
corrupt courts to steal a controlling stake in a Siberian oil field.
Norex claims Blavatnik, Vekselberg and others illegally took control of ZAO
Yugraneft, a company once valued at $500 million that owns an oil field in
western Siberia. Norex sued in New York state court in March 2011 after a federal
judge threw out the case, saying it should be heard in Russia. State Supreme
Court Justice Eileen Bransten in September 2012 also dismissed the lawsuit,
ruling it was filed too late, and Norex asked the Court of Appeals in Albany to
reinstate the case.
A unanimous Court of Appeals ruled today that the state case was filed within six
months of the decision in the federal suit, and was timely under statutes of
limitation in New York and Alberta, where Norex is based.
Norex has been denied its day in court for a long time, Barry R. Ostrager, a
lawyer for Norex, said in a telephone interview. At issue is a lawless
appropriation of a lucrative oil field by these Russian oligarchs utilizing corrupt
2 of 5 12/14/16, 11:00 AM
judicial proceedings in Russia, he said.
Untrue Assertions
Ostrager last month urged the appeals court to reinstate the case, saying the
original claim was filed in federal court in 2002, soon after the alleged activity.
Owen C. Pell, an attorney for Blavatnik and Vekselberg, told the court that Norex
was forum-shopping after losing litigation in the U.S. and Russia.
Blavatnik is the worlds 46th-richest man with a net worth of $17.7 billion,
according to the Bloomberg Billionaires Index. His former college classmate,
Vekselberg, ranks 68th with a net worth of $14.9 billion.
Blavatnik said in a statement that the appeals court sent the case back to the trial
judge to address the numerous remaining grounds for dismissing the case.
The assertions in Norexs lawsuit are not only untrue, he said. They are
merely a tired rehash of the same preposterous claims Norex has been
unsuccessfully recycling for the past 12 years in both U.S. and Russian courts.
Corporate Takeover
Fatigue-wearing militiamen armed with AK-47 assault rifles stormed Yugranefts

corporate oces in June 2001, acting on the orders of Blavatnik, Vekselberg and
others and took control of the company, according to the lawsuit.
The two billionaires bribed Russian ocials to influence a lawsuit in that
3 of 5 12/14/16, 11:00 AM
country that sought to reduce Norexs 60 percent stake in Yugraneft, according

to the complaint. A Russian court in 2002 cut Norexs stake to 20 percent.
Norex also accused TNK-BP, a joint venture between BP and the billionaires who
control Yugraneft, of profiting from the scheme at its expense. OAO Rosneft,
Russias largest oil producer, bought TNK-BP in March 2013 for $55 billion.
BP didnt immediately respond to an e-mail seeking comment on the ruling.
The case is Norex Petroleum Ltd. v. Blavatnik, 650591/2011, New York State
Supreme Court, New York County (Manhattan).
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4 of 5 12/14/16, 11:00 AM
FILED: NEW YORK COUNTY CLERK 06/23/2011 INDEX NO. 650591/2011
NYSCEF DOC. NO. 53 RECEIVED NYSCEF: 06/23/2011
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
:
NOREX PETROLEUM LIMITED, : Index No. 650591/2011
:
Plaintiff, :
:
v. :
:
LEONARD BLAVATNIK; VICTOR : FIRST AMENDED COMPLAINT
VEKSELBERG; SIMON KUKES; ACCESS :
INDUSTRIES, INC.; ALFA GROUP CONSORTIUM; :
RENOVA, INC; OAO TYUMEN OIL COMPANY; :
TNK-BP LIMITED; and BP PLC, :
:
Defendants. :
:
Plaintiff, NOREX PETROLEUM LIMITED (Norex), by and through its attorneys
Simpson Thacher & Bartlett LLP and Marks & Sokolov, LLC, and for its complaint against
Defendants Leonard Blavatnik (Blavatnik); Victor Vekselberg (Vekselberg); Simon Kukes
(Kukes); Access Industries, Inc. (Access); Alfa Group Consortium (Alfa); Renova, Inc.
(Renova); OAO Tyumen Oil Company (TNK); TNK-BP Limited (TNK-BP); and BP PLC
(BP) (collectively Defendants) alleges as follows:
NATURE OF THE CASE
1. Blavatnik, a Russian migr billionaire living on Park Avenue, and his former
university classmate, Vekselberg, a Russian expatriate billionaire living on East 67th Street
(Billionaire Oligarchs), through their New York companies, Access and Renova, conspired
with BP, Kukes, Alfa, TNK and TNK-BP Limited, with whom they are jointly and severally
liable, to strip Norex of its valuable controlling interest in, and rightful profits from, a Russian oil
company named ZAO Yugraneft (Yugraneft), which owns an oil field in Western Siberia
worth hundreds of millions of dollars.
1
2. Defendants accomplished their illegal takeover of Yugraneft (Illegal Takeover)
by corrupting Russian court proceedings and government officials in an attempt to decrease
Norexs ownership interest in and voting rights over Yugraneft (the Know-How Case), forging
documents, and ultimately sending armed private militiamen carrying AK-47 machine guns to
storm Yugranefts corporate offices and oil field in June 2001.
3. As a result of Defendants actsmany of which were, upon information and
belief, orchestrated by the Billionaire Oligarchs from their offices in New YorkNorex lost the
value of its controlling shareholding in Yugraneft, estimated at over a billion dollars, tens of
millions of dollars in dividends, and tens of millions of dollars in other misappropriated
Yugraneft assets.
PARTIES AND VENUE
PLAINTIFF
4. Plaintiff Norex Petroleum Limited, originally named NowscoR, is a corporation
organized under the laws of Cyprus. Norex maintains a representative office in Calgary, Canada.
Its principal and chairman is Alex Rotzang (Rotzang), a Canadian national.
DEFENDANTS
THE OLIGARCH DEFENDANTS
5. Defendant Leonard Blavatnik is a citizen of the United States and maintains a
residence in New York County, New York. Upon information and belief, Blavatnik is among
the worlds wealthiest individuals with a net worth estimated around $7.5 billion.
6. Defendant Access is a company organized under the laws of the State of New
York with a principal place of business in New York County, New York. Upon information and
belief, Blavatnik owns and controls, and is the founder and chairman of, Access.
2
7. Defendant Victor Vekselberg is, upon information and belief, a resident of the
United States and maintains a residence in New York County, New York. Upon information and
belief, Vekselberg is among the worlds wealthiest individuals with a net worth of approximately
$6.4 billion.
8. Defendant Renova is a company organized under the laws of the State of New
York with a principal place of business in New York County, New York. Upon information and
belief, Vekselberg owns and controls, and is president of, Renova.
9. Upon information and belief, Defendants Blavatnik and Vekselberg co-founded
Renova.
10. Defendant Alfa is an unincorporated association of various affiliated companies.
Alfa was formed by Russian billionaire magnates, including third party co-conspirators German
Khan and Mikhail Fridman, who presently serves as Alfas Chairman. Upon information and
belief, Alfa continuously and systematically transacts business within New York State. Alfa
describes itself as one of the largest privately owned financial industrial conglomerates.
Officers of Alfa and its affiliate companies frequently travel and do business in New York,
including, but not limited to, the purchase of controlling shares of companies listed on the New
York Stock Exchange and NASDAQ, such as Vimpelcom and CTC Media, Inc. Alfa and its
affiliate companies also regularly do business in New York by agreeing to arbitrate and/or
litigate disputes in New York, taking advantage of New Yorks judicial system, either directly or
through alter ego entities like Storm LLC, which filed and prosecuted litigation in New York
state and federal courts from 2007 onward at the direction of Fridman and Khan. Alfa, through
Alforma Capital Markets, part of the Alfa Banking Group, has an office and does business in
New York.
3
11. Defendants Blavatnik and Vekselberg, through their companies, Access and
Renova, together with Defendant Alfa, fully own and control Defendant TNK.
12. Defendant Simon Kukes is a United States citizen and resident of New York and
was the President and Chief Executive Officer of Defendant TNK during the relevant time
period.
THE BP DEFENDANT
13. Defendant BP is a company organized under the laws of England and is the
successor to BP-Amoco.
14. BP continuously and systematically transacts business within New York State.
BP holds itself out on its website and press releases as a company that does significant business
in the United States, including New York. It does not differentiate between BP and its wholly-
owned subsidiaries, representing that BP itself has a global business, which includes significant
business in the United States, including New York. According to its website:
BP employs approximately 23,000 people in the US, has over $55 billion in
operating capital employed, and sells more than 15 billion gallons of gasoline every
year.
By 2001, following a series of mergers and acquisitions, [BP would] become the
largest oil and gas producer and one of the largest gasoline retailers in the US.
BP is the largest non US company listed on the New York Stock Exchange.
15. BP, upon information and belief, orchestrates a coordinated global marketing and
operational campaign. According to a speech given by its former CEO John Brown, BPs
headquarters in the sense of decision making functions are now almost totally mobile, with
offices in London, Chicago, and New York. The New York office is dedicated to public and
investor relationsobviously of critical importance to one of the worlds largest publicly traded
energy companies.
4
16. Officers and employees of BP frequently work in New York and engage
attorneys, as well as public relations and investment advisors, in New York for its vast business.
Upon information and belief, BP either owns real estate in New York or its officers and directors
use offices owned by wholly-owned BP subsidiaries when they are in New York.
THE TNK/TNK-BP DEFENDANTS
17. TNK is a company organized under the laws of the Russian Federation. It may
now be known as and/or be a part of OAO TNK-BP Holding.
18. Upon information and belief, TNK was a joint venture fully owned and controlled
by Defendants Blavatnik and Vekselberg, through their companies Access and Renova, and
Defendant Alfa by 1999. Upon information and belief, these co-conspirators/co-venturers used
TNK to further their agreement to amass oil assets in Russia.
19. Upon information and belief, Defendant Blavatnik is a former director and co-
owner of TNK, and Defendant Vekselberg is a former director, Chairman of the Executive
Board, and co-owner of TNK.
20. TNK-BP Limited is a company organized under the laws of the British Virgin
Islands. TNK-BP is a joint venture in which Defendant BP owns 50%, Defendants Blavatnik
and Vekselberg, through their companies Access and Renova, own 25%, and Defendant Alfa
owns 25%.
21. Upon information and belief, Defendants Blavatnik and Vekselberg are current
directors of TNK-BP.
VENUE
22. Venue is proper under CPLR 503(a) because at least one of the parties to this
action resided or had its principal office in New York County at the time of the commencement
5
of this action. Additionally, causes of action that are the subject of this lawsuit arose in this
County.
PROCEDURAL HISTORY
23. On February 26, 2002, shortly after Defendants and their co-conspirators forcibly
seized control of Yugraneft and its oil field, Norex filed suit in federal court in the Southern
District of New York. Norex alleged various claims under RICO (18 U.S.C. 1961-68)
relating to Defendants conspiracy to appropriate Norexs controlling interest in, and the assets
of, Yugraneft. Defendants moved to dismiss on a variety of grounds, including forum non
conveniens, which the district court granted in 2004. The United States Court of Appeals for the
Second Circuit reversed and remanded in July 2005, holding that New York was a proper forum
for the adjudication of the dispute. See Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d
146 (2d Cir. 2005).
24. Specifically, after noting the extensive submissions and discovery on the issue,
id. at 153, the Second Circuit reversed the district courts dismissal and held that Defendants
forum non conveniens argument was without merit for at least two reasons. First, the Court of
Appeals found that Norexs decision to sue in New York was informed by genuine
convenience and was therefore due deference. Id. at 157. Second, the Court of Appeals held
that dismissal was improper and inconsistent with the demands of justice where, as here, there
was no adequate alternative forum for the adjudication of the dispute. Id. at 160. The Second
Circuit specifically rejected Russia as an alternative forum because [e]xpert opinions from both
sides reveal that Russian courts would likely deem the core issues underlying plaintiffs claims
largely precluded by the Know-How Case [that was filed with the Russian courts]. Id. at 159.
Significantly, the Court of Appeals held that the Russian default judgment [against Norex] in
6
the Know-How Case cannot be given preclusive effect by an American court since Norex was
never afforded the opportunity to challenge the default judgment based on improper service. Id.
at 161-62.
25. On remand, the district court found that RICO, as a matter of statutory
construction, did not have extraterritorial application and again dismissed the case without
reaching the underlying merits. Norex appealed the decision as clearly contrary to established
Second Circuit law. While the appeal was pending, the United States Supreme Court issued
Morrison v. Natl Australia Bank, Ltd, 130 S. Ct. 2869 (2010), overruling the Courts of Appeals
of every federal circuit by holding that federal securities fraud statutes generally have no
extraterritorial reach. Based solely on Morrison, the Second Circuit overruled its RICO
precedents and affirmed the dismissal of Norexs RICO claims without reaching the merits,
holding that there was subject matter jurisdiction but that RICO has no extraterritorial
application. Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29 (2d Cir. 2010), petition for
cert. filed, 79 U.S.L.W. 3636 (Apr. 18, 2011) (No. 10-1310).
26. On March 7, 2011, Norex filed its initial complaint in the instant state court
action, to which Defendants have not yet responded.
27. On April 18, 2011, Norex filed a petition for certiorari to the United States
Supreme Court, seeking review of the Second Circuits application of Morrison to the federal
RICO case.
28. On May 27, 2011, this Court stayed the instant state court action pending
resolution of Norexs certiorari petition.
29. On June 22, 2011, Norex initiated the process of withdrawing its petition for
certiorari so that the state court case could move forward in earnest and with all deliberate speed.
7
30. The claims filed herein are based upon the same transaction or occurrence or
series of transactions or occurrences Norex pled in its federal action. For purposes of statutes of
limitations, these claims are treated as commenced on February 26, 2002 pursuant to CPLR
205(a).
FACTS
BACKGROUND
31. Norex entered the Russian oil market in 1991 by partnering with Chernogorneft
(CNG) to form Yugraneft, a joint venture that develops a lucrative oil field in Western Siberia.
Pursuant to the terms of their joint venture agreement, Norex provided valuable cold-weather oil
field technology worth around $5.8 million that was previously not available in Russia. In
addition, Norex contributed $1.2 million in capital plus related expenses (such as duty and
customs fees) to transfer its technology into Russia. CNG agreed to provide the joint venture
with oil field rights and $800,000 in capital. In exchange for their respective contributions,
Norex received 60% of Yugranefts shares, and CNG received 40%.
32. For years, this arrangement proved beneficial to both parties. By 1992, Yugraneft
was already paying millions of dollars in dividends to Norex and CNG.
THE EARLY CONSPIRACY
33. After the collapse of the Soviet Union, beginning in the late 1990s, Blavatnik and
Vekselberg conspired from New York to obtain control of and exploit various oil assets located
in Russia. Blavatnik utilized Access and Vekselberg utilized Renova as tools to accomplish this
goal.
8
34. The conspiracy began in 1998 when the Billionaire Oligarchs, through TNK, an
entity they controlled through their companies Access and Renova, together with Defendant
Alfa, forced Norexs joint venture partner, CNG, into bankruptcy.
35. By September 1999, the Billionaire Oligarchs, Alfa and TNK, under the
leadership of its President and CEO, Defendant Kukes, had assumed full control of CNGs
assets, including its minority interest in Yugraneft.
36. In March 1999, after a mandatory redistribution of shares necessitated by the
discovery that CNG never made the required initial capital contribution to Yugraneft that it
claimed it had, Norexs ownership stake increased from 60% to 97.64% of the company.
37. In November 1999, upon information and belief, upset at and embarrassed by,
among other things, the dilution of their ownership interest in Yugraneft and Norexs refusal to
relinquish its rights under Yugranefts charter, the Billionaire Oligarchs and Alfa directed co-
conspirator Khan, a co-founder of Alfa and an officer of TNK, to threaten Norex chairman
Rotzang. Specifically, Khan threatened to run over Yugraneft like a steamroller as we
eliminate those who go against us.
38. Over the next year and a half, Defendants scheme to wrest full control of
Yugraneft intensified as Yugraneft discovered oil deposits that would increase its proven oil
reserves by approximately fifty percent.
39. Defendants and their co-conspirators became immediately aware of the increased
reserves because of their ownership and control of CNG. The discovery also later became a
matter of public record.
40. The Billionaire Oligarchs and Alfa, each of whom, together with their co-
conspirators, is jointly and severally liable for the harm resulting from their conspiracy, then
9
determined that they would do whatever was necessaryincluding using threats and physical
forceto divest Norex of its majority interest in Yugraneft and take complete control of the
company and its valuable oil field.
THE ILLEGAL TAKEOVER OF YUGRANEFT
THE KNOW-HOW CASE
41. On June 25, 2001, just a few days before Yugranefts June 28, 2001 shareholders
meeting, upon information and belief, Access/Renova, Blavatnik, Vekselberg, Alfa, and Kukes
caused TNK to file a complaint in a Russian court against Norex. Through that action (the
Know-How Case), Access/Renova, Blavatnik, Vekselberg, Alfa, and Kukes sought to reduce
significantly Norexs ownership of Yugraneft by arguing speciously that Norexs initial
contribution of technical know-how had not been valued properly when Yugraneft was formed
in the early 1990s. In addition, they sought an injunction to freeze the majority of Norexs
shares in Yugraneft.
42. Critically, Norex was never properly served with the complaint in that actionan
issue which played a significant role in the Second Circuits analysis and holding.
43. Upon information and belief, Access/Renova, Blavatnik, Vekselberg, Alfa,
Kukes, TNK and their co-conspirators bribed Russian officials, including by wiring funds from
New York for that purpose, in order to influence the Know-How Case. As a result, on June 26,
2001, the Russian court accepted their false representations regarding service of process and
issued an ex parte ruling enjoining Norex from voting the majority of its shares at the upcoming
shareholders meeting and prohibiting Yugraneft from counting these shares at any other
meetings that might occur.
10
44. Notably, in August 2000, third party co-conspirator Khan, in a meeting with
Yugranefts then Director General, Lyudmilla Kondrashina, told Kondrashina that TNK had its
own people at all levels of [the Russian] government. He reiterated that sentiment in January
2001 when he told Kondrashina that TNK controlled Russias Supreme Arbitrazh Court, the
ultimate arbiter of commercial disputes.
45. Defendant Kukes, for his part, admitted bribing Russian officials in a top secret
memo, which Norex obtained from the C.I.A. through a Freedom of Information Act Request.
THE SHAREHOLDERS MEETING
46. On June 28, 2001, the scheduled shareholders meeting of Yugraneft took place at
its offices in Moscow and was overseen by two court bailiffs. A representative of Norex
attended the meeting. As a result of the corrupted proceedings in the Know-How Case, TNK
had, two days earlier, disabled Norex from voting the majority of its shares. However, because
TNK had not yet registered the Yugraneft shares that it appropriated from CNG in TNKs name,
TNK was technically not allowed to vote those shares and indeed did not have standing to attend
the shareholders meeting. Thus, Norex was the only shareholder at the June 28 shareholders
meeting that could vote any of its shares. Norex voted the shares the Know-How court had not
enjoined, which the court bailiffs in attendance certified, and re-elected Ms. Kondrashina as
Yugranefts Director General.
THE ARMED SEIZURE OF YUGRANEFTS OFFICES
47. The very next day, on June 29, 2001, at the direction, upon information and
belief, of the Billionaire Oligarchs, Access/Renova, and Alfa, in coordination with then president
of TNK, Defendant Kukes, sixteen TNK fatigue-wearing militiamen armed with AK-47 machine
11
guns forcibly entered Yugranefts corporate offices. The militiamen falsely informed
Yugranefts employees that TNK had assumed ownership of Yugraneft.
48. Upon entering Yugranefts offices, TNKs attorneys falsely informed everyone
present that a Yugraneft shareholders meeting had occurred on June 28, 2001 at which TNKs
candidate for Director General, as opposed to Norexs candidate, had been duly elected,
presenting Yugraneft employees with fabricated minutes to that effect.
49. TNK private armed militia members returned on July 6, 2001, again carrying
machine guns, and cut off Yugranefts phone and internet service and occupied Yugranefts oil
field and field office.
50. On July 17, 2001, Defendant Kukes visited Yugranefts field operations. While
there, Kukes informed Yugranefts field operations employees that TNK had taken over the
company and that everyone needed to sign employment agreements with TNK or immediately
leave the premises, causing many of Yugranefts foreign employees to flee the country.
POST-TAKEOVER ACTIONS IN FURTHERANCE OF THE ILLEGAL TAKEOVER
THE STRIPPING OF YUGRANEFT ASSETS
51. Following their takeover of Yugraneft, the Billionaire Oligarchs, Access/Renova,
Alfa, TNK, Kukes and their co-conspirators stripped Yugraneft of over $40 million of funds and
other assets and diverted profits from oil sales to entities controlled by the Billionaire Oligarchs
and Alfa. Additionally, to perfect their armed seizure of Yugraneft, the Billionaire Oligarchs,
Access/Renova, Alfa, TNK, Kukes and their co-conspirators continued bribing Russian officials
to influence the Know-How Case, as well as submitted to the Russian court fabricated Yugraneft
shareholders minutes. Access/Renova and Alfa established slush fund companies to which
Alfa, through its affiliates, the Crown Group trading companies, caused to be wired tens of
12
millions of dollars through banks in New York, which were then used, upon information and
belief, to pay bribes to Russian officials in furtherance of the Illegal Takeover. As a result of
Defendants corruptive acts, the Russian court entered a default judgment against Norex on
January 24, 2002, reducing Norexs equity interest in Yugraneft to 20%.
BP JOINS THE ILLEGAL TAKEOVER
52. BP, with full knowledge of the armed misappropriation of Norexs controlling
interest in Yugraneft, nevertheless joined forces with the Billionaire Oligarchs, Alfa, and TNK in
2003, becoming equal partners in a newly formed company, Defendant TNK-BP, which assumed
control over Yugranefts assets.
53. BP, the Billionaire Oligarchs, Access/Renova, Alfa, TNK, and TNK-BP have
since done everything in their power to divert Yugraneft profits away from Norex, its majority
shareholder, including refusing to pay any of the millions of dollars in dividends to which Norex
is, and has been, entitled for the last ten years. By contrast, since its founding in 2003, TNK-BP
has distributed more than $20 billion in dividends to its shareholders, not a penny of which
Norex has received.
FIRST CAUSE OF ACTION

(Tortious Interference with a Contract Against All Defendants)
54. Plaintiff repeats and realleges the paragraphs above as if fully set forth herein.
55. In October 1991, Norex entered into a joint-venture agreement with CNG to form
Yugraneft.
56. Defendants were aware of this agreement when they conspired and perpetrated
the Illegal Takeover. BP was aware of this agreement when it joined the Illegal Takeover.
57. Defendants bribed Russian officials, threatened Rotzang and Yugraneft officers,
forged documents, engaged in the armed seizure of Yugranefts field offices, conspired to cause
13
and actually caused: (1) Norexs ownership interest in Yugraneft to be reduced to 20%; (2)
Yugraneft to refrain from paying Norex dividends; (3) the redirection of all profits from
Yugranefts oil sales to Defendants as opposed to sharing any of the profits from these sales with
Norex; and (4) the seizure of Yugranefts assets for their benefit. All of this and the other
wrongful acts set forth above (collectively referred to as the Wrongful Acts) were done with
malice and through illegal means.
58. Defendants intentional participation in a conspiracy to tortiously interfere with
the joint-venture agreement between Norex and CNG to form Yugraneft caused CNG to breach
its obligations under this agreement. In particular, Defendants conspiracy caused CNG to
breach various provisions of the joint-venture agreement which include (but are not limited to)
Articles 1.11, 4.1, 4.3, 4.6, and 8.12.
59. Defendants intentional participation in this conspiracy caused Norex damages in
excess of $1 billion.
SECOND CAUSE OF ACTION

(Tortious Interference with Prospective Business Relations Against All Defendants)
61. For years, Norex, CNG and Yugraneft enjoyed commercial relationships that
were beneficial to all parties.
62. Defendants were aware of the profitable relationships between Norex, CNG and
Yugraneft when they engaged in a conspiracy to tortiously interfere with them by perpetrating
the Illegal Takeover through their Wrongful Acts. BP was aware of these relationships when it
joined the Illegal Takeover.
63. Defendants engaged in multiple overt acts in furtherance of this conspiracy to
interfere with Norexs business relations with CNG and Yugraneft, including, but not limited to,
14
perpetrating the Illegal Takeover through their Wrongful Acts. The Wrongful Acts were done
with malice, through illegal means, and with the purpose of harming Norexs prospective
business relations with Yugraneft and CNG.
64. These Wrongful Acts harmed Norexs prospective business relations with
Yugraneft and CNG by depriving Norex of: (1) its ownership interest in Yugraneft and (2)
dividends from Yugraneft.
THIRD CAUSE OF ACTION

(Conversion of Norexs Ownership Interest in Yugraneft and Dividends due Norex from
Yugraneft Against All Defendants)
67. Defendants engaged in a conspiracy to convert Norexs rightful ownership
interest in Yugraneft and dividends due Norex from Yugraneft.
68. Defendants engaged in multiple overt acts in furtherance of this conspiracy,
including, but not limited to, perpetrating the Illegal Takeover through their Wrongful Acts and
thereby converting Norexs ownership interest in Yugraneft and dividends due from Norex.
FOURTH CAUSE OF ACTION

(Breach of Fiduciary Duties Against All Defendants)
71. Defendants owed Norex fiduciary duties of care and loyalty due to the nature of
their ownership and control of CNG, Norexs business partner in the joint-venture Yugraneft.
15
72. Defendants were aware that these fiduciary duties existed and knowingly engaged
in a conspiracy to cause their breach.
73. Defendants engaged in multiple overt acts in furtherance of this conspiracy,
including, but not limited to, perpetrating the Illegal Takeover of Yugraneft through their
Wrongful Acts and thereby breached the fiduciary duties of care and loyalty owed to Norex.
FIFTH CAUSE OF ACTION

(Unjust Enrichment Against All Defendants)
76. Defendants were unjustly enriched by more than $1 billion at the expense of
Norex.
77. It is against equity and good conscience to permit Defendants to retain these
benefits, worth in excess of $1 billion, that Norex seeks to recover.
SIXTH CAUSE OF ACTION

(Unjust Enrichment in Violation of Russian Law Against All Defendants)1
79. Defendants were unjustly enriched by more than $1 billion at the expense of
Norex.
80. Defendants are obliged to return to Norex the unjustly acquired amount of more
than $1 billion.
1
Articles 1102 and 1107 of the Russian Civil Code, attached hereto, may apply to this claim.
16
SEVENTH CAUSE OF ACTION
(Intentional Tortious Conduct / Minority Oppression in Violation of Russian Law Against
All Defendants)2
82. The Wrongful Acts by Defendants constitute intentional tortious conduct
designed to harm Norex in violation of Russian law.
83. As a direct and proximate cause of the above conduct, Norex suffered damages in
excess of $1 billion and is entitled to compensation in full by Defendants.
EIGHTH CAUSE OF ACTION

(Action for Money Had and Received Against All Defendants)
85. Defendants perpetrated the Illegal Takeover through their Wrongful Acts,
including, without limitation, illegally and forcibly trespassing upon Plaintiffs property for the
purpose of seizing Yugranefts oil field and field offices.
86. Since the Illegal Takeover, Defendants have withheld money rightfully owed to
Norex, including, but not limited to, millions of dollars in dividends due to Norex as the majority
shareholder of Yugraneft. Indeed, notwithstanding that Norex has, by Defendants own
admission, at a minimum a twenty-percent ownership interest in Yugraneft, Defendants have
refused to pay Norex any dividends from the hundreds of millions of dollars in profits generated
by the Yugraneft oil field since the Illegal Takeover. In contrast, Defendants and their co-
conspirators have distributed more than $20 billion in dividends to its shareholders since 2003,
not a penny of which Norex has received.
2
Articles 10, 1064, 1080, and 1081 of the Russian Civil Code may apply to this claim.
17
87. The Defendants have enormously benefited by retaining, without limitation, the
millions of dollars in dividends rightfully owed to Norex as the majority shareholder of
Yugraneft.
88. Defendants perpetrated the Illegal Takeover through their Wrongful Acts and
have since benefited by refusing to pay Norex money that it is rightfully due. Under principles
of equity and good conscience, Defendants should not be permitted to retain this money.
WHEREFORE, Norex demands judgment against Defendants, as follows:
A. On all causes of action, awarding compensatory damages in an amount to be
determined at trial that is in excess of $1 billion;
B. On the First, Second, Third, and Fourth Causes of Action, awarding punitive
damages.
C. For such other and further relief as this Court may deem just and proper,
including interest, and Plaintiffs costs, attorneys fees and disbursements.
Dated: June 23, 2011

SIMPSON THACHER & BARTLETT LLP
By: /s/ Barry Ostrager

Barry R. Ostrager
Mary Kay Vyskocil
425 Lexington Avenue
New York, New York 10017
212-455-2000 (telephone)
212-455-2502 (telefax)
18
FOREIGN LAW
PROVISIONS OF THE RUSSIAN CIVIL CODE
Article 10. Limits for the exercise of civil rights.
1. Citizens and legal persons are banned from actions undertaken exclusively with the intention
of inflicting damage on other persons, as well as from the misuse of a right in any other form.
The use of civil rights for the purposes of setting bounds to competition, as well as the abuse
of domination on the market are not permitted.
2. If the requirements specified in pt. 1 of this article are not observed, the court of law or court
of arbitration can deny the person protecting the right belonging to him,
3. In the cases when the law makes protection of civil rights dependent on whether these rights
have been exercised reasonably and conscientiously, reasonable actions and conscientious of
participants in civil relations at law are presupposed.
Article 1064. General Grounds for Responsibility for Causing of Harm
1. Harm caused to the personality or property of a citizen, as well as harm caused to property
of a legal person shall be subject to compensation in full by the person who has caused the harm.
A law may place the duty to compensate for harm on a person who is not the causer of harm.
A law or contract may provide for the duty of the causer of harm to pay compensation to the
victim in excess of the compensation for harm.
2. The person who has caused harm shall be released from compensating for harm, if he proves
that the harm has not been caused through a fault of his. A law may also provide for
compensation for harm in the absence of the harm causer's fault.
3. Harm caused through a lawful action shall be subject to compensation in instances provided
by law.
Compensating for harm may be rejected if the harm was caused at the request or by consent of
the victim and the actions of the harm causer have not violated moral principles of society.
Article 1080. Responsibility for Jointly Caused Harm
Persons who have jointly caused harm shall bear joint responsibility to the victim.
Upon the application of the victim and in his interests a court shall have the right to place on
the persons who have jointly caused harm responsibility in shares, having determined them in
accordance with the rules provided by Article 1081(2) of the present Code.
19
Article 1081. Right of Recourse Against Person Who Has Caused Harm
1. The person who has compensated for the harm caused by another person (by an employee
while performing his official, ministerial or other work duties, by a person who was driving a
vehicle, etc) shall have the right to a counter claim (recourse) against this person in the amount
of compensation paid, unless a different amount has been established by law.
2. The harm causer who has compensated for the jointly caused harm shall have the right to
demand from each of the other harm causers a share of the compensation paid to the victim in the
amount corresponding to the degree of fault of this harm causer. If it is impossible to determine
the degree of fault, the shares shall be deemed to be equal.
3. The Russian Federation, a Russian Federation subject or a municipality, if they have

compensated for the harm caused by an official of inquest, preliminary investigation, public
prosecutor's or judicial agencies (Article \ 1070[1]), shall have the right of recourse against this
person when his fault has been established by the court verdict which has entered into legal
force.
4. Persons who have compensated for harm on grounds mentioned in Articles 1073-1076 of the
present Code shall not have the right of recourse against the person who has caused the harm.
Article 1102. Duty to Return Unjustified Enrichment
1. The person who without grounds established by a law, other legal acts or transaction has
acquired or saved property (acquirer) at the expense of another person (victim) shall be obliged
to return to the latter the unjustly acquired or saved property (unjustified enrichment), except in
instances provided by Article 1109 of the present Code.
2. The rules provided by the present Chapter shall apply irrespective of whether the unjustified
enrichment resulted from the behaviour of the acquirer of property, the victim himself or third
persons or occurred against their will.
Article 1107. Compensating Victim for Profits Missed
1. The person who has unjustly obtained or saved property shall be obliged to return or
compensate the victim for all profits he has derived or must have derived from this property from
the moment he learnt or must have learnt about the unjust character of enrichment.
2. Interest on the sum of unjustified pecuniary enrichment shall be charged for the use of
another's funds (Article 395) from the time when the acquirer learnt or must have learnt about the
unjust character of obtaining or saving monetary funds.
20
FILED: NEW YORK COUNTY CLERK 10/26/2011 INDEX NO. 650591/2011
NYSCEF DOC. NO. 120 RECEIVED NYSCEF: 10/26/2011
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
----------------------------------------------------------------x
NOREX PETROLEUM LIMITED, :
:
Plaintiff, :
:
vs. :
: Index No. 650591/2011
: (Commercial Division)
LEONARD BLAVATNIK; VICTOR :
VEKSELBERG; SIMON KUKES; ACCESS : Hon. Eileen Bransten
INDUSTRIES, INC.; ALFA GROUP :
CONSORTIUM; RENOVA, INC; OAO TYUMEN : I.A.S. Part 3
OIL COMPANY; TNK-BP LIMITED; and BP :
PLC, : Motion Sequence Nos. 7-11
:
Defendants :
----------------------------------------------------------------x
AFFIDAVIT OF BERNARD S. BLACK
STATE OF ILLINOIS )
: ss.:
COUNTY OF COOK )
BERNARD S. BLACK, being duly sworn, deposes and says:
I. Issues Addressed and Summary of Expert Opinions
This report focuses principally on the time period relevant to Tyumen Oil Company
(TNK)s hostile takeover of Chernogorneft and Yugraneft, from 1998-2003, but also considers
the present time. I was asked by Norex to provide an expert opinion on whether Norex could
have obtained, during that time period, an impartial decision from the Russian arbitrazh courts
(especially the courts in Tyumen oblast),1 against TNK. I was also asked whether Norex could
1
An oblast is a Russian geographic and political region, similar to a U.S. state.
obtain such an impartial decision today against TNK or its successor, TNK-BP.2 In my opinion,
Norex could not obtain an impartial decision against TNK then or against TNK or TNK-BP now.
I will focus on the Russian commercial or arbitrazh courts, which hear disputes
between legal entities such as Norex and TNK, but would reach similar conclusions for the
Russian courts of general jurisdiction. I accept as true the factual allegations in the Norex
complaint. This section summarizes my opinions. The factual bases for them are set forth in the
body of this Affidavit.
1. A hostile takeover in Russia refers to an outside raider using corrupt court
decisions, and often physical force, to wrest control and ownership of a profitable company from
a majority shareholder for little or no consideration. The raider effectively steals the company
from its current owner(s). A Russian takeover is not at all similar to a U.S. hostile takeover, in
which a raider lawfully offers to buy a majority of the shares of a target company from their
current owners at a premium to their current market value.
2. Hostile takeovers are common in Russia. They often include the ordered
bankruptcy of solvent firms (Russian: ), in the sense of ordered by
someone powerful, and the opaque sale of their assets at low prices to the persons who ordered
the bankruptcy.
3. In my opinion, a small company, especially a foreign company such as Norex,
cannot expect to obtain an impartial decision from the Russian courts against a major oligarch-
2
TNK refers narrowly to the initials of defendant (Tyumenskaya
Neftyannaya Kompania), which translates as Tyumen Oil Company. This company was controlled by Alfa Group
(whose principals include co-conspirators Mikhail Fridman and German Khan, as well as Pyotr Aven), defendant
Access Industries (controlled by defendant Leonard Blavatnik), and defendant Renova, Inc. (controlled by defendant
Viktor Vekselberg). Alfa, Access, and Renova together own TNK, work closely together, and refer to themselves
by the acronym AAR see www.aar.ru. Defendant Simon Kukes was the CEO of (Russian company TNK). I will
use the term TNK to refer to all defendants other than BP plc and TNK-BP. TNP-BP is the joint venture between
(Russian company TNK) and BP, formed in 2003, which now owns the assets, including Yugraneft shares,
previously owned by (Russian company TNK). TNK-BP is jointly owned by BP (50%) and AAR (50%), with the
AAR stake held by Alfa (25%), Access (12.5%) and Renova (12.5%).
2
controlled company once the major company decides to complete a hostile takeover of the small
companys Russian assets. More specifically, Norex had no reasonable possibility, either during
TNKs takeover of Yugraneft or now, of obtaining an impartial decision from the Russian
arbitrazh courts (especially in Tyumen oblast) against TNK once TNK controllers decided to
take over Yugraneft. On the contrary, judicial corruption was central to TNKs takeover
strategy.
4. Corruption, by its nature, can rarely be proved directly. Instead, the likelihood of
corruption must be inferred from all relevant evidence. For the reasons set forth below, the
likelihood of corruption in the Russian litigation between Norex and TNK, including the so-
called Know-How case is very high.
5. I will offer specific evidence of the role of corruption in Russian hostile
takeovers; the prevalence of the tactics that TNK used against Chernogorneft and Yugraneft; and
TNKs conduct as a raider in other takeovers. I will use this evidence as a basis for opinions as
to whether this plaintiff had a fair chance of obtaining a fair decision against TNK and the other
defendants, in this case; and whether the decisions of the Russian courts, in this case, deserve
deference.3
6. A core factor in assessing likely corruption in a particular case is background
conditions. One important element: Many Russian government officials were at relevant times
(and are today) thoroughly corrupt. Then and future President Putin, current President
Medvedev, and the chairs of the Russian Supreme Court and Supreme Arbitrazh Court have
acknowledged that corruption extends to the judiciary.
3
I offer no opinion as to whether the Russian arbitrazh or general courts can provide a fair forum for a business
dispute between two companies of similar size and political connectedness. I address whether this plaintiff could
obtain a fair hearing in a case against these defendants, and whether Russian court decisions in this case merit
deference.
3
7. A second important background element: The Russian economy is dominated by
a handful of extremely powerful oligarchs who control large industrial empires. It is difficult
to overstate the oligarchs power. They strongly influence the central government and often
control regional and local governments. The oligarchs often achieved their power by being
tough, nasty, and willing to use all available means to further their own ends, including bribes,
threats, and physical force. Judicial corruption is especially likely when an oligarch is on one
side of a dispute.
8. The controllers of TNK (including Leonard Blavatnik, Viktor Vekselberg,
German Khan, and Mikhail Fridman) are among the most wealthy and powerful Russian
oligarchs. TNK is notorious for its aggressive (even by Russian standards!) takeover tactics. It
is understood to largely control the government and courts in Tyumen oblast and the Khanty-
Mansiysk region within Tyumen oblast.
9. The partiality of the Russian courts (which I term corruption) in hostile
takeovers arises from three sources: bribes; threats, and government pressure (often induced by
bribes and threats).
A. One source is classic corruption -- payments to judges (or their family members)
to reach particular decisions, or payments to chief judges to hear a case themselves or
assign a case to a pliable judge. Such payments are common at all levels of the arbitrazh
courts.
B. A second source of partiality is political pressure. Judges in regions where a
major firm dominate the economy (as TNK does in Tyumen oblast) are unlikely to issue
decisions against the company or the government. The interests of major companies and
regional governments are often closely aligned. In particular, the governors of Tyumen
4
oblast and Khanty-Mansiysk region sat on TNKs board of directors at relevant times. It
is widely understood that Russian judges, as in the Communist era, often take orders from
politicians on how to decide cases.
C. A third source of partiality is threats against judges or their families, if they render
unsatisfactory decisions. These threats can involve both physical harm and criminal
charges brought by compliant prosecutors based on manufactured evidence. Lawyers
who represent clients who oppose oligarchs risk reprisal against themselves or their
families.
10. The principal facts alleged in this case involve a hostile takeover of Yugraneft by
TNK, including diluting Norexs controlling stake in Yugraneft. This takeover was one in a
series of hostile takeovers by TNK of other companies, including an earlier takeover of
Chernogorneft, Norexs joint venture partner in Yugraneft.
11. Defendant BP has been more than once the victim of TNKs extreme tactics. The
first time was in 1998-1999, when BP was a major shareholder of Sidanko, which controlled
Chernogorneft. BP was a victim of TNKs takeover of Chernogorneft through ordered
bankruptcy. BP ran afoul of TNKs Russian controllers again in 2008, when they sought greater
control over the TNK-BP joint venture, and yet again in 2011. BPs public protests about its
mistreatment by TNK, the Russian courts, and Russian government officials are consistent with
Norexs allegations about TNKs actions.4
12. TNKs tactics in taking over Chernogorneft and Yugraneft included:
ordered bankruptcies;
4
This history likely explains one notable aspect of this case: BP filed a separate motion to dismiss, and
declined to join in the motion by the Russian defendants, thus distancing itself from any claim that Russia provides
an adequate forum or that Russian judicial decisions deserve deference.
5
flagrantly wrong and partial court decisions (for which corruption is the natural
explanation);
physical threats against judges and target managers;
flagrantly partial decisions by the Chernogorneft bankruptcy manager;
influence over regional authorities;
not allowing Chernogorneft to emerge from bankruptcy by paying its debts in full;
allowance in Chernogorneft of false debt and disallowance of valid debt;
faked notice of court proceedings;
court orders blocking the voting of shares;
faked shareholder meeting minutes;
criminal proceedings and threats against the targets personnel;
quashing investigations of its own unlawful conduct;
armed takeover of the targets offices; and much more.
These tactics are consistent with TNKs tactics in other hostile takeovers and with hostile
takeover tactics generally.
13. I largely formed my views on Russian corruption, ordered bankruptcies such as
Chernogorneft, and TNKs own conduct prior to my involvement in this case. My views, while
strong, are within the mainstream of views of others, including BP itself. I consider myself to be
a careful scholar, and would not make the strong statements in this Report unless I had a firm
basis for them.
14. This Report proceeds as follows. Part II summarizes my qualifications. Part III
provides an overview of the Russian oligarchs power. Part IV reviews the ordered (by TNK)
bankruptcy of Chernogorneft. Part V discusses the Yugraneft takeover. Part VI discusses BPs
repeated run-ins with TNK. Parts VII and VIII discuss the role of judicial and official corruption
in hostile takeovers more generally. Part IX concludes.
II. Qualifications
15. I am the Nicholas J. Chabraja Professor at Northwestern University, with
appointments as Professor of Law in the School of Law, Professor of Finance in the Kellogg
6
School of Management, and Faculty Associate at the Institute for Policy Research. My
curriculum vitae is attached as Appendix A to this Report.
16. I was a policy advisor from 1993-1997 to the State Property Committee of the
Russian Federation and the Russian Federal Securities Commission. I was a principal drafter of
the Russian Law on Joint Stock Companies (the JSC Law); an advisor on the Russian Law on
Limited Liability Societies (1998); a co-drafter of a Presidential Decree On Unit Investment
Funds, which later developed into a Law on Investment Funds (2002), and an advisor on Part 1
of the Russian Civil Code. I was subsequently (2005-2006) an advisor on corporate and
securities law reform to the Russian Federal Service on the Securities Market. As my CV
indicates, I have published extensively on Russian legal reform, in both English and Russian. A
partial list of my scholarly writing on Russia, relevant to this case:
Bernard Black & Reinier Kraakman, A Self-Enforcing Model of Corporate Law, 109 Harvard
Law Review 1911-1981 (1996);
Bernard Black, Reinier Kraakman & Anna Tarassova, Guide to the Russian Law on Joint Stock
Companies (1998 in English and Russian);
Gainan Avilov, Bernard Black, Dominique Carreau, Oksana Kozyr, Stilpon Nestor & Sarah
Reynolds, General Principles of Company Law for Transition Economies, 24 Journal of
Corporation Law 190-293 (1999) (in English and Russian);
Bernard Black, Reinier Kraakman & Anna Tarassova, Russian Privatization and Corporate
Governance: What Went Wrong?, 52 Stanford Law Review 1731-1808 (2000);
The Corporate Governance Behavior and Market Value of Russian Firms, 2 Emerging Markets
Review 89-108 (2001);
Bernard Black & Anna Tarassova, Institutional Reform in Transition: A Case Study of Russia, 10
Supreme Court Economic Review 211-278 (2003); and
Bernard Black (main author), with co-authors Anastasiya Farukshina, Brian Cheffins, Martin
Gelter, Hwa-Jin Kim, Richard Nolan, Matthias Siems and Linia Prava law firm, Legal Regulation
of the Liability of Members of Management Organs: An Analysis of International Practice
(Alpina Publishers 2010) (in Russian)
17. I have been an expert witness or advisor in disputes involving a number of major
Russian oil companies, including Komineft, Kondpetroleum, Samaraneftegaz, Sidanko, Sibneft,
7
Surgutneftegaz, and Yukos.5 I have given research seminars and speeches on Russian
privatization, reform, and corruption at the International Monetary Fund, the Organisation for
Economic Co-Operation and Development (OECD), and the World Bank. I have direct
knowledge, independent of this case, about TNKs behavior in its takeovers of Chernogorneft
and Kondpetroleum.
18. I consider myself to be an expert in Russian company law and securities law. I
also have expertise on Russian corruption, including judicial corruption, both from my legal
reform work in Russia and from acting as an advisor or expert witness in disputes involving
Russian companies. I know many coauthors, colleagues, and friends, who have similar personal
knowledge of Russian corruption. I have not been personally threatened, but I know people who
have, and I have been personally warned to be careful in what I say publicly.
III. The Power of the Russian Oligarchs
19. Shortly after the collapse of the Soviet Union in 1991, Russia privatized most of
its major companies. The major oil and other natural resources companies were privatized at
knock-down prices through a plan, known as loans-for-shares, promoted by some of the then-
newly wealthy Russian oligarchs, including Mikhail Fridman and Pyotr Aven of Alfa Group.
Most of the oligarchs, including Fridman and Aven, acquired their initial wealth and power
through connections with the Russian government. They then often leveraged that initial wealth
through, among other things, loans-for-shares and hostile takeovers of smaller, less-connected
companies.
20. The Russian economy was, by the late 1990s, and remains today, dominated by
extremely powerful oligarchs who control large industrial empires. It is difficult to overstate the
5
I also provided an expert report in the prior federal litigation by Norex against TNK and many of the other
defendants in this action.
8
oligarchs power, especially in regions where they own major businesses. The oligarchs meet
regularly with senior government officials, including the Russian President. Ample evidence of
the oligarchs power can be found in the well-researched books about them by Western authors.6
21. TNK is especially powerful in Tyumen oblast. Mikhail Fridman, who controls
Alfa Group, which owns 50% of TNK, is one of the most powerful oligarchs in Russia. Viktor
Vekselberg and Leonard Blavatnik, who control the other 50% of TNKs shares, are also major
oligarchs, as are TNKs German Khan and Alfas Pyotr Aven.7
22. In cases involving two parties of roughly equal power and influence, it may be
possible to obtain a fair decision from the Russian arbitrazh courts. There is conflicting evidence
on how strong a possibility this is.8 However, this case involves a small, foreign company,
facing the full artillery of one of Russias most powerful oligarch groups, known for its
aggressive takeover tactics, which are often accompanied by inexplicable court decisions. The
likelihood of a fair decision in such a case as very low. The flagrantly pro-TNK decisions in the
Know-How Case, discussed below, support that assessment.
6
See, for example, Rose Brady, Kapitalizm: Russias Struggle to Free Its Economy (Yale University Press,
1999); Crystia Freeland, Sale of the Century: Russias Wild Ride from Communism to Capitalism (Times Books,
2000); Marshall Goldman, The Piratization of Russia: Russian Reform Goes Awry (Routledge 2003), Thane
Gustafson, Capitalism Russian-Style (Cambridge University Press 1999); David Hoffman, The Oligarchs: Wealth
and Power in the New Russia (Public Affairs, 2002); Paul Klebnikov, Godfather of the Kremlin: Boris Berezovsky
and the Looting of Russia (Harcourt, 2000) (Klebnikov was later murdered, presumably by someone displeased by
his reporting). My overview in this section relies on these books and personal knowledge.
7
The 2011 Forbes Magazine list of billionaires includes Fridman ($15.1B), Vekselberg ($13B), Khan ($9.5B),
Blavatnik ($10.1B), and Aven ($4.5B) (Blavatnik on the U.S. list, the others on the Russia list). In 2003, Forbes
listed Fridman ($4.3B) and Vekselberg ($2.5B) among the worlds billionaires. See
http://www.forbes.com/wealth/billionaires/list?country=225&industry=-
1&statewww forbes.com/wealth/billionaires/list?country=195 and www.forbes.com/static html/bill/2003/rank html
(exh. 1).
8
On the more optimistic side, see Kathryn Hendley, Peter Murrell & Randi Ryterman, Law Works in Russia:
The Role of Legal Institutions in the Transactions of Russian Enterprises, in Peter Murrell ed., Assessing the Value
of Law in Transition Economies (March 31, 1999) (exh. 2). For a less optimistic view, see Timothy Frye, The Two
Faces of Russian Courts: Evidence from a Survey of Company Managers, EAST EUROPEAN CONSTITUTIONAL
REVIEW, Winter/Spring 2002, at 125-129 (exh. 3), and World Bank, World Business Environment Survey, discussed
below.
9
23. As Russian lawyer Pavel Astakhov writes in his book, Defensive Measures
Against Seizure by Raiders, often there are no defenses against a raid by a major company:9
[I]n most cases, it will be impossible to affect the course of events . . . . This is because the union of
administrative (government) apparatus and large capital is the most powerful force that can swallow
any business in our country. . . .
In todays Russia, a company becomes a potential target of a hostile takeover when: (1) it is a small
or medium-size firm in an industry that is currently being monopolized by large market participants;
(2) it has lesser access to administrative (government) apparatus than the raider does. . . The success
of the raiders business hugely depends on an instrument that we tellingly named administrative
resources; unfortunately, today, there are no barriers to their use by raiders. . . . The methods used
by Russian raiders during takeovers are linked to judicial abuse and based on corruption.
IV. The Ordered Bankruptcies of Chernogorneft and Kondpetroleum
A. TNKs Takeover of Chernogorneft and Kondpetroleum
24. I summarize here TNKs use of bankruptcy proceedings to acquire cheaply
Chernogorneft and Kondpetroleum, the principal oil producing subsidiaries of Sidanko in
effect, to steal them from Sidanko and BP (which had made a major investment in Sidanko). I
focus principally on Chemogorneft because of its relevance to this case: It gave TNK a minority
stake in Yugraneft, which TNK used to take over Yugraneft. Both cases graphically illustrate
TNKs takeover tactics.
25. The Chernogorneft and Kondpetroleum takeovers are among the best known,
textbook examples of hostile takeovers through ordered bankruptcy.10 In a 2000 article, my
coauthors and I summarized them as follows:11
A recent example [of judicial corruption]: the bankruptcy proceedings for Sidanko, an oil holding
company owned by kleptocrat Vladimir Potanin, and Chernogorneft and Kondpetroleum, two key
9
, ( 2008) [Pavel Astakhov, Defensive
Measures Against Seizure by Raiders (Eksmo Press, 2008), at 7-8, 15 (my translation).
10
The paragraph structure of quotations, citation form within footnotes, and the spelling of Russian names is
sometimes altered for readability and consistency. I cite English language sources where available.
11
Bernard Black, Reinier Kraakman & Anna Tarassova, Russian Privatization and Corporate Governance:
What Went Wrong?, 52 STANFORD LAW REVIEW 1731-1808 (2000) (exh. 4). My basis for these statements includes
sources cited in this article, plus personal knowledge as I was an advisor around this time to a Kondpetroleum
shareholder.
10
Sidanko subsidiaries. . . . In the Chernogorneft bankruptcy proceedings, 98% of the creditors
voted for one external manager, but the local judge appointed a different manager with ties to
Tyumen Oil, owned by kleptocrat Mikhail Fridman, which wanted to acquire Chernogorneft
cheap. The court also rejected a Chernogorneft offer to pay all creditors in full!12 Tyumen was
able to buy Chernogorneft for $176 million and Kondpetroleum for $52 million (a small fraction
of actual value), in what Potanin publicly called an atmosphere of unprecedented pressure on the
court system.13 Which apparently means that Tyumen didnt merely bribe judges (Sidanko
could have offered its own bribes), but threatened them as well. Indeed, a judge who issued an
early ruling against Tyumen was beaten for his troubles.14
26. BP was vocal about its distress at TNKs conduct. Its CEO, John Browne, later
described this incident in his memoirs and called BP a nave foreign investor caught out by a
rigged legal system.15 BP prevailed on British Prime Minister Tony Blair to write to his
Russian counterpart, Vladimir Putin, to express concern.16 EBRD, a Chernogorneft creditor
whose claim was partially disallowed, was no happier. It complained to Russian Prime Minister
Stepashin that:17
EBRD is very concerned that the bankruptcy of [Chernogorneft] is not being conducted in a
proper and transparent manner. . . . [T]here have been many irregularities in procedure and
various legal challenges to the process by entities affiliated to large oil interests [read: TNK]
aimed at disenfranchising EBRD and [the United States Export-Import Bank] as creditors . . .
[including actions] in violation of the Federal Bankruptcy law.
12
I currently understand that this offer was made by BP and other Sidanko shareholders, rather than
Chernogorneft itself. The core point is that the offer was credible and was unaccountably rejected by the court.
13
Jeanne Whalen & Bhushan Bahree, How Siberian Oil Field Turned into a Minefield, WALL STREET
JOURNAL, Feb. 9, 2000, at A21 (quoting Potanin) (exh. 5). For other pieces of the Chernogorneft bankruptcy story,
see Igor Semenenko, Siberian Oil Company Fights Hostile Takeover, MOSCOW TIMES, May 29, 1999 (exh. 6); Alan
S. Cullison, Russias Tyumen Oil Seeks to Expand with Some Assets of Troubled Sidanko, WALL STREET JOURNAL,
July 8, 1999, at A12 (exh. 7); Neela Banerjee, From Russia, With Bankruptcy, NEW YORK TIMES, Aug. 13, 1999, at
C1 (exh. 8).
14
See Rules of War, ECONOMIST, Dec. 4, 1999, at 65 (Tyumen rival [Sidanko, one infers] alleges that Tyumen
intimidated local judges and complains that [i]f they just stuck to bribing judges, we could play that game too.)
(exh. 9); Lee Wolosky, Putins Plutocrat Problem, FOREIGN AFFAIRS, Mar./Apr. 2000, at 18, 30 (reporting the
beating) (exh. 10).
15
John Browne, Beyond Business: An Inspirational Memoir from a Visionary Leader (2011), at 140 . As the
title suggests, humility was not one of John Brownes stronger characteristics. (excerpt attached as exh. 11).
16
Letter From U.K. Prime Minister Tony Blair to Russian Prime Minister Vladimir Putin (Sept. 7, 1999) (exh.
12).
17
Letter from Noreen Doyle, Deputy Vice President of EBRD, to Russian Prime Minister Sergei V. Stepashin
(29 July 1999) (exh. 13).
11
27. A later EBRD letter to Director Georgi Tal of the Russian Federal Bankruptcy
Service stated:18
It now has to be questioned whether OAO Chernogorneft should be considered a bona fide
bankruptcy case because it is generating substantial cash flow and . . . [BP] has offered to
purchase all creditor claims at full value. Certain creditors [read: TNK] . . . have blocked this
action . . . .
28. After TNK acquired Chernogorneft, EBRD termed the bankruptcy auction a
sham and wholly contrary to the concepts of fairness and transparency.19
29. In response to pro-TNK partiality by a court-appointed Chernogorneft bankruptcy
manager, the Federal Bankruptcy Service removed his license. In one of a series of manifestly
partial actions, the local Tyumen oblast courts ignored this order.20 The Bankruptcy Service
director, Georgi Tal, later described the Tyumen arbitrazh courts as the legal department of
TNK,21 and called the Chernogorneft bankruptcy proceedings a fraud.22 (Mr. Tal was later
gunned down in Moscow in 2004; likely in connection with [his] work at the [Bankruptcy
Service].23)
30. All this effort was to no avail. The influence of Sidankos controller, oligarch
Vladimir Potanin, was similarly unavailing. TNK acquired Chernogorneft and Kondpetroleum
18
Letter from Charles Frank, First Vice President of EBRD to Chairman Georgy Talj of the Russian Federal
Bankruptcy Service (15 Oct. 1999) (exh. 14); see also Mark Milner, Sale of Bankrupt Russian Oil Firm a Travesty,
say BP Amoco and EBRD, GUARDIAN (Nov. 26, 1999) (exh. 15) (EBRD terms the auction a travesty and a
perversion of justice).
19
David Hoffman, Auction of Russian Oil Firm Angers Investors, WASHINGTON POST, Nov. 27, 1999 (exh. 16).
20
Report on Foreign Affairs to U.K. House of Commons (28 Feb. 2000), at note 72, available at
www.parliament.the-stationery-office.co.uk/pa/cm199900/cmselect/cmfaff/101/10102.htm (relevant excerpt
attached as exh. 17).
21
Id. 36.
22
Alexei Nikolsky, Former Director of the Federal Financial Recovery Service Murdered, VEDOMOSTI, April
29, 2004 (translation attached as exh. 18).
23
Id.
12
for laughably low prices, in opaque bankruptcy auctions.24 The extreme facts let BP persuade
the State Department to order that the U.S. Export-Import Bank (ExIm Bank) cancel a loan
guarantee to Tyumen.25 As part of that effort, BP provided a detailed report to the CIA on
TNKs actions. The CIA verified the principal claims and conveyed the report to the ExIm
Bank. The report alleged, among other things, that TNK CEO Simon Kukes admitted bribing
local officials; and Sidanko was blocked by armed force from delivering court orders postponing
the Chernogorneft auction.26
31. Having stopped the loan guarantee, BP then used TNKs desire for the guarantee
to negotiate a deal with TNK, which I discuss below.
32. My opinions on the Chernogorneft takeover and TNK are consistent with those of
others observers. I offer here two examples. First, Lee Wolosky, Deputy Director of the
Economic Task Force on Russia of the Council on Foreign Relations wrote in 2000:27
In a highly publicized case, Fridmans Tyumen Oil Company (TNK) allegedly stole Sidankos
most valuable asserts by manipulating the bankruptcy process. According to defrauded Sidanko
shareholders (who include BP-Amoco), the theft was carried out through the corrupt appointment
of a TNK-friendly receiver , the unlawful reduction of the claims of major creditors such as the
European Bank for Reconstruction and Development (in which the United States holds shares),
and a rigged bankruptcy auction in which only TNK-affiliated companies could bid. . . .
24
As BP Chairman John Browne later wrote, Browne (2011), supra note 15, at 140: A farcical competitive
auction was then held. . . [Chernogorneft] had been sold for what we thought was one-tenth of its value. The
companys so-called debts could easily have been settled by BP . . . . We were a nave foreign investor caught out
by a rigged legal system. At the time, BP termed the bankruptcy process manipulated, invalid; a travesty,
and intended only to achieve the transfer of the enterprise to a third party at a fraction of its value. (exh. 11);
Mark Milner, Sale of Bankrupt Russian Oil Firm a Travesty, Say BP Amoco and EBRD, Guardian (Nov. 26, 1999)
(exh. 15); Jeanne Whalen, Peril Grows for BPs Russian Investment, Wall St. J. (Nov. 26, 1999) (exh. 19).
25
See David Ignatius, The Strange Case of Russia, Big Oil and the CIA, Wash. Post (Jan. 9, 2000) (exh. 20).
26
Letter [responding to Freedom of Information Act request] from Robert Herman, Information and Privacy
Coordinator, U.S. Central Intelligence Agency, to Gene Burd, Esq. (Sept 2, 2003) (exh. 21). The CIAs verification
of the underlying report is reported in Ignatius (2000), supra note 25. I presume that the full underlying report will
become available through discovery in this case, and am puzzled as to why it has not yet been produced. Tyumens
effort to take control of Chernogorneft is discussed in the Letter from Leonard Blavatnik (on TNK letterhead) to
Stephen Glazer of ExIm Bank (Apr. 14, 1999) (exh. 22).
27
Lee Wolosky, Putins Plutocrat Problem, FOREIGN AFFAIRS, Mar./Apr. 2000, at 18 (exh. 10). I know Mr.
Wolosky personally and understand him to have personal knowledge of many of the situations he writes about.
13
In cases involving the oligarchs, trial and appellate court judges are routinely bribed. Failing that,
judges who evince a dangerous predisposition to impartiality are reassigned without explanation
by superiors who are presumably on the take. . . . The oil oligarchs are extremely ruthless.
People who get in their way -- even ministers of the Russian Federation -- are routinely
threatened. A senior TNK official involved in the Sidanko-BP-Amoco dispute allegedly waved a
pistol in the face of the major of Nizhnevartovsk. A local judge who had made a decision adverse
to TNK was reportedly beaten in the street. . . .
Second, noted Russian scholar Marshall Goldman, of Harvard University, wrote in his 2003
book, The Piratization of Russia:28
Alfa [Group] and its subsidiary Tyumen Oil have been among the more notorious users of the
Russian bankruptcy courts. It used them to seize assets from several Western investors, including
[BP] and Norex. . . . To [BP]s amazement, in October 1998 a minor creditor sued Chernogorneft
for an unpaid bill of a mere $50,000. Other suits followed and in December 1998 Chernogorneft
was suddenly declared bankrupt by a regional judge appointed by [Tyumen governor] Leonid
Roketsky . . . [who] also just happened to be Chairman of TNK at the time. Try as they might,
there was no way for either Sidanko or [BP] to step in to pay off the overdue bills.
33. TNK worked hard to maintain strong ties to administrative resources. Its board
of directors also included Aleksandr Filipenko, head of the Khanty-Mansiysk region, and the
governors of two other oblasts where TNK had major operations. TNKs former general counsel
had since become Deputy Chairman of the Supreme Arbitrazh Court; his replacement as general
counsel was a former Deputy Minister of Justice.29
B. The General Practice of Takeovers Through Ordered Bankruptcies
34. TNKs takeovers of Chernogorneft and Kondpetroleum were unusual only in that
the target was another oligarch-controlled company, with a major foreign investor in BP. This
made them more visible than many hostile takeovers. But TNKs tactics were quite ordinary.
During the period from 1998-2002, there were hundreds, perhaps thousands of similar takeovers;
28
Marshall Goldman, The Piratization of Russia 144-45 (2003).
29
When Sergei Sobyanin replaced Leonid Roketsky as governor of Tyumen oblast in 2001, he also replaced
Roketsky as Chair of the TNK board of directors.
, . (13.03.2002) [Multicentricity are Friedman and Companys Biggest Problem,
Politkom ru (Mar. 13, 2002)] (Russian original and English translation: exh. 23).
14
enough to give rise to the term ordered bankruptcy, and to public descriptions of typical
tactics. I briefly review that evidence here, relying on quotes from credible sources.
35. Russian economists Ariane Lambert-Mogilansky, Constantin Sonin & Ekaterina
Zhuravskaya describe misuse of the bankruptcy process, with participation by arbitrazh judges,
writing:30
Abstract: Laws that work well in a country with the rule of law may produce unexpected
outcomes in a corrupt environment. This paper argues that the Russian legal system is impaired
by the capture of regional arbitrazh courts and analyzes the consequences of this capture. . . .
[Regional] governors in alliance with managers of large regional enterprises use bankruptcy to
expropriate the federal government and outside investors. . . .
Text of the article: [Arbitrazh court judges] have large discretionary power . . . [including power]
to overrule the creditors nomination of [an external] manager. . . . There is a voluminous
anecdotal evidence suggesting that the decisions of the judges in the regional arbitrazh courts
were often politically captured by the regional governments. . . .
[The authors develop a theoretical model, and supporting evidence, in which regional arbitrazh
courts are corrupt and controlled by regional governors; companies bribe governors to obtain
desired outcomes. Many solvent firms are put into bankruptcy, and their value is expropriated
from investors.]
36. Coudert Brothers, a major international law firm at the time (it has since
dissolved), published in 2003 a remarkable report on takeovers of Russian companies through
misuse of the courts. They wrote:31
An unprecedented wave of hostile takeovers is sweeping over Russia. . . . The main tool
employed in [these takeovers] is the judicial branch of government, plus administrative
resources. In these transactions, the owners of controlling stakes in many Russian enterprises
have discovered that court orders have been issued . . .. that result in the forced sale of a
controlling interest in their companies, together with the loss of all investments made into such
companies. A group of specialist consulting firms [assists] in structuring hostile takeover attacks
and motivating members of the judiciary and regulatory branches of government to make
expedited decisions that are favorable to their clients. . . . Most acquisitions of control of
30
Ariane Lambert-Mogilansky, Constantin Sonin & Ekaterina Zhuravskaya, Capture of Bankruptcy: Theory
and Russian Evidence (Center for Economic and Financial Research Working Paper, 2003) (exh. 24). The authors
are affiliated with the Center for Economic and Financial Research at the New Economic School in Moscow
probably the leading independent economics research organization in Russia. I know personally Constantin Sonin,
Ekaterina Zhuravskaya, and the Centers director, Sergei Guriev.
31
Coudert Brothers LLP, Corporate Takeovers, Russian Style, and Necessary Legal Reform (Mar. 28, 2003)
(exh. 25). One impetus for this report was Couderts role in a (rare) successful defense of a target, Ilim Pulp, against
a hostile takeover. I know personally two Coudert partners who devoted substantial time to work involving Russian
clients, Barry Metzger and Olga Sirodoeva, and have confidence in their judgment and in the accuracy of this report.
15
Russian corporations today involve the use of administrative resources, i.e., improper
intervention by judicial and government agencies. . . .
Russias judicial system is very ill. . . . Almost all corporate takeovers today involve[ ] local
judicial decisions influenced by corporate raiders. . . . [K]ey government and judicial offices are
frequently reported to be nominees of the leading local business figures. We are not aware of an
instance in which a judge who rendered illegal judgments and issued unjustified orders in support
of an abusive hostile takeover has been removed from his or her office by local judicial oversight
boards.
A top Russian sociologist, Prof. Vadim Volkov, explained:32

The hallmark of enterprise takeovers was the use of state courts, of special police forces, and of
regional administrations. . . . Enterprise takeovers were most frequently framed as either
bankruptcy proceedings . . . or as legal actions in defense of rights of minority shareholders . . . .
[An ordered bankruptcy involves] the decision of a court that has been prepared (usually through
substantial bribes) to quickly issue the required decision. The key point in the court decision is
the appointing of an external manager who has already been selected by the aggressor.33 . . . In
most cases, a special police contingent arrives at the gate of the enterprise just two or three days
after the court decision has been issued. . . . In case the previous owners and managers resist, the
aggressor has a hard lever to neutralize resistance: criminal prosecution. . . . [Prominent
examples include] several takeovers of ore-, gas-, and oil-processing plants by the [Alfa] group
led by Mikhail Fridman, including the notorious case of the bankruptcy takeover of the oil
company [C]hernogorneft in 1999 . . . .
V. The Yugraneft Takeover and the Know-How Case
A. Takeovers Involving Manipulation of Share Ownership
37. A second popular takeover approach matches more closely the approach that
TNK used to take control of Yugraneft and falls under the general heading of schemes involving
manipulation of shareholder meetings. A pretext is found to disallow the controller from voting
its shares. The raider then holds a sham meeting, at which it purports to oust the old
management. This meeting is then used as legal cover for a physical attack on the targets
32
Vadim V. Volkov, The Selective Use of State Capacity In Russias Economy: Property Disputes and
Enterprise Takeovers, 1998-2002, in Janos Kornai & Susan Rose-Ackerman eds., TRUST IN POST-SOCIALIST
ECONOMIES (2003) (attached at exh. 26); see also Vadim V. Volkov, VIOLENT ENTREPRENEURS: THE USE OF FORCE
IN THE MAKING OF RUSSIAN CAPITALISM (2002). Dr. Volkov is Vice-Rector and professor of economics and at
European University of St. Petersburg. He was recently ranked among the 10 most influential economists and
sociologists in Russia. See , 10 :
20002010 (Russian Reporter Magazine, Ten Ideas over Ten Years: Most Influential
Economists and Sociologists, 2000-2010), at www rusrep ru/2010/20/ekonomisty/ (exh. 27).
33
In many cases the debtor enterprise would not even be notified about the meeting of creditors that has to elect
the external manager. A widespread trick is sending an empty envelope by recorded delivery mail service, which is
subsequently used in court as evidence that the debtor has been notified by mail.
16
headquarters by armed men (often ostensibly police or security forces), who evict the old
managers. As Thomas Firestone of the U.S. Department of Justice explains in his article,
Criminal Corporate Raiding in Russia:34
In [one] scheme, raiders call a shareholders meeting but fail to provide other shareholders
adequate and timely notice, either by mailing notices to the wrong address, sending the notices
only a short time before the meeting, or holding the meeting in a remote, inaccessible location. 35
At the meeting, they exploit the artificially created majority to vote in a new board of directors.
Another scheme involves filing a frivolous lawsuit in order to obtain a court judgment
temporarily restricting the voting power of other shares, thus giving the raiders a temporary
majority, which they then use to change the board of directors.
As Firestone notes, judicial corruption is a central element of most takeovers:
One expert even concluded that presentation of false evidence in civil proceedings is a required
element of raiding schemes. In addition, raiders often exercise corrupt influence through
bribery, political pressure, or other means over the judge(s) presiding over the case. According
to statistics compiled by a non-governmental organization, the National Anti-Corruption
Committee (NACC), judicial decisions are easily bought . . . .
38. As Astakhov notes, one defense to manipulation of shareholder meetings is to
maintain 90% ownership, thus ensuring that the raider cannot obtain the 10% of shares needed to
demand a shareholder meeting.36 Once a meeting has been validly demanded, the target is in
trouble. And so it would prove for Yugraneft.
B. TNKs Takeover of Yugraneft
39. TNKs takeover of Yugraneft relied on decisions by the same Khanty-Mansiysk
and Tyumen oblast courts that supported its takeovers of Chernogorneft and Kondpetroleum.
The most significant of these decisions were in the Know-How Case. Among other things, TNK
34
Thomas Firestone, Criminal Corporate Raiding in Russia, 42 Intl Lawyer 1207, at 1212 (2008) (exh. 28).
35
I have personal knowledge of similar tactics involving oil company Komineft. A shareholder meeting was
scheduled in Syktivkar, which is effectively reachable only by air. Air service to Syktivkar was mysteriously
interrupted (not by weather) for two days before the meeting, preventing any unwanted shareholders from attending
or voting.
36
Pavel Astakhov, Defensive Measures Against Seizure by Raiders (Eksmo Press, 2008), supra note 9,
2.2.1.6 (titled , Working with Shareholders). This is not to suggest that holding 90% of the
shares provide very strong protection. Another common takeover strategy involves creating a second, false share
registry, and then bribing a court to recognize the false registry. Firestone (2008), supra note 34; Astakhov (2008),
9.
17
demanded a shareholder meeting, and then, when Norex held a shareholder meeting in response
to the demand, obtained an ex parte court order just before the meeting, barring Norex from
voting its Yugraneft shares. This order was patently without basis in the Russian Joint Stock
Company (JSC) law.
40. At the meeting, Norex had a majority of votes because TNKs shares were
recorded on Yugranefts share register as owned by Chernogorneft, so these shares could not be
voted by TNK. TNK responded by fabricating minutes of this meeting, presumably obtained a
court order recognizing the fake minutes,37 and used the court order as cover for an armed
takeover of Yugranefts offices the day after the meeting. An armed raid on Yugranefts
principal production facility soon followed.38 Corruption is the most likely explanation for the
pro-TNK decisions, taken ex parte and with astonishing speed,39 by the Khanty-Mansiysk
courts.40
41. Norex persuaded the Khanty-Mansiysk prosecutor to send a warning letter to
TNK concerning the fabricated minutes.41 The investigation was quickly closed, and the
prosecutor who sent the letter was reprimanded by his superior and soon fired.42
37
In most hostile takeovers, the armed attack on the targets offices is supported by a court order, to provide a
veneer of legality. I do not know whether TNK obtained such an order in the case.
38
TNKs President, Simon Kukes, appeared shortly thereafter at Yugranefts production facility and told
employees that TNK now controlled Yugraneft, and told them that they needed to either sign new employee
agreements with TNK or lose their jobs. Norex First Amended Complaint 155, Norex Petroleum Ltd v. Access
Indus., Inc., No. 02 Civ. 1499 (S.D.N.Y.)..
39
TNK filed suit against Norex on June 25, the court barred Norex from voting on June 26, the meeting was
held on June 28, TNK then presumably obtained later on June 28 a second court order authorizing the seizure of
Yugranefts offices, and TNK invaded Yugranefts offices on June 29, 2001.
40
This report focuses on Norexs basis for seeking a hearing on its claims in the U.S., not the merits of those
claims. For this reason, plus the page limit on this Affidavit, I do not provide details on TNKs violations of the JSC
law in its takeover of Yugraneft, nor the flagrantly wrong judicial decisions in the Know-How Case.
41
Letter from Deputy KhantyMansiysk Prosecutor V.A. Belan to TNK-Niznevartovsk General Director N.G.
Smolyar, WARNING: Legal Violations Cannot Be Tolerated (July 6, 2001) (capitals in original) (Russian original
and translation: exh. 29).
18
42. Norex, supported by the Canadian Ambassador to Russia and later the Canadian
Minister of Finance, persuaded the Ministry of Internal Affairs to investigate. The Ministry
concluded:43
It was determined that on June 29, 2001, [TNK] fabricated the Protocol of the shareholder
meeting of [Yugraneft]. Using this fabricated protocol, [TNK] invaded [Yugranefts] head office
and the production facilities . . . . [TNK] made a duplicate corporate seal that was actively used
[to conduct Yugranefts business].
43. The Ministry of Internal Affairs referred this matter to the prosecutors office for
criminal proceedings; but this investigation was soon quashed too.44
44. The Moscow arbitrazh court similarly concluded that TNK had fabricated the
minutes that it used as a pretext to seize Yugranefts offices:45
Taking into account that it was impossible to hold two shareholder meetings of the same
legal entity at the same place, the same time and with the same agenda . . . and also
taking into account that the shareholder meeting at which the authority of L.V.
Kondrashina was confirmed, with court marshals present, took place in reality, the court
concludes that the meeting indicated in the [shareholder meeting agenda and resolutions
created by TNK] did not take place and A.V. Berman was not elected as general director
of Yugraneft.
As best I can tell, TNK and the Tyumen courts simply ignored this decision.
45. In Russia, a company cannot operate without its corporate seal, and can have only
one seal, which Kondrashina took with her when TNK occupied Yugranefts offices. 46 So TNK
fabricated a seal too.
42
On the reprimand, see Letter from N.N. Korotkov, Head of the Ural Federal District General Prosecutors
Office to L.V. Kondrashina and A. Rotzang of Yugraneft (18 July 2001) (exh 30).
43
Letter from R.G. Nurgaliev, First Deputy Minister, Head of the Department of Criminal Militia, Ministry of
Internal Affairs of the Russian Federation, to Alexander Yurievich Voronin [of the Russian Ministry of Foreign
Affairs] (exh. 31).
44
Id.
45
Decision dated 15 November 2001 of Presnensky regional arbitrazh court, Moscow (Judge M.A. Bolonina)
(exh. 32). This was an ex parte proceeding, held after the court concluded that the interested party [TNK] . . . had
no good reason for being absent. But the judgment was not appealed, and the courts assessment of which set of
minutes was the true set was simple: among other indicia, the Norex set included the Yugraneft seal and was
attested to by a notary; the TNK version had neither the Yugraneft seal nor a notary attestation.
46
Letter from former Yugraneft General Director Lyudmila Kondrashina to BP p.l.c. (June 1, 2004) (exh. 33).
19
46. Under the JSC law, all significant dealings between a parent company and a non-
wholly-owned subsidiary can only be completed with the approval of both the noninterested
members of the companys board of directors (if any) and the minority shareholder(s).47
Following TNKs takeover of Yugraneft, Norex had veto power over all significant transactions
between TNK and Yugraneft. TNK and BP ignored (and continue to ignore) this rule.
C. Common Themes in TNKs Takeovers
47. TNKs takeovers of Yugraneft fit within a pattern of tactics used by TNK and
others in these and other hostile takeovers.48 To summarize, these tactics include the following:
TNK acquired Chernogorneft through an ordered bankruptcy.

o Ordered bankruptcies were a common takeover method, and TNK was a known,
notorious user of this method.
The Governor of Tyumen oblast, where the Chernogorneft and Yugraneft takeovers
occurred, was the Chairman of TNKs board.
o Many hostile takeovers rely on close connections between the raider and regional
governments; TNK has enormous influence in Tyumen oblast.
o The Director of the Federal Bankruptcy Service, Georgi Tal, later described the
Tyumen regional court as the legal department of TNK.
In Chernogorneft, the Tyumen courts rejected an offer by BP to pay all creditors in full,
chose an external manager with ties to TNK when 98% of creditors favored another
47
JSC Law ch. 11; see Bernard Black, Reinier Kraakman & Anna Tarassova, Guide to the Russian Law on
Joint Stock Companies (1998).
48
Two other examples of TNKs actions involve the privatization of Slavneft and an attempted hostile
takeover of Rospan. For Slavneft, another bidder, state-owned oil company Rosneft, publicly offered $2.5 billion.
TNK obtained a court order barring Rosneft from bidding, and won the auction at $1.9 billion. The New York Times
explained that The sale [of Slavneft] gave new meaning to the word opaque and termed the court order baffling.
Sabrina Tavernese, Oil Auction in Russia: Some Scowl, Others Giggle, N.Y. Times, Dec. 19, 2002 (exh. 34); see
also Catherine Belton, Sibneft, TNK Snap Up Slavneft for $1.8 Bln, Moscow Times, Dec. 19, 2002 (exh. 35).
In 2002, TNK attempted an ordered bankruptcy takeover of oil and gas producer Rospan, but settled for a 44%
stake plus the right to manage Rospan, with Yukos acquiring the other 56% stake. As Coudert Brothers explained,
Both parties used [physical] force on the basis of decrees by various courts. Coudert Brothers, LLP, Examples of
Power Take-Overs in 2001-2002 (May 2003) (submitted in the Duma Takeover Hearings discussed below) (exh.
36). Rospan, like Chernogorneft, involved TNK blocking the company from paying its debts in full, aided by an
obviously improper decision by the Moscow appellate arbitrazh court that reversed a lower court decision that
allowed the payments. See Sergei Zankovsky, Theory and Practice of Bankruptcy, Izvestia, April 27, 2002 (Russian
original and translation: exh. 37) (Prof. Zankovsky is Director of the Center for Business Law at the Institute of
State and Law of the Russian Academy of Sciences).
20
manager, and ignored a Federal Bankruptcy Service order removing the pro-TNK
manager.
o Blatant favoritism in court decisions is a routine aspect of corporate raids.
In Yugraneft, the courts blocked Norex from voting its shares and accepted the results of
a patently invalid shareholder meeting.
o Hostile takeovers often rely on highly odd court decisions favoring the raider.
Blocking the target from voting its shares is a common tactic.
TNK failed to properly serve Norex in the Know-How Case.
o Many takeovers involve improper or no service, followed by ex parte
proceedings. One common tactic, used against Yugraneft, is sending an empty
envelope.
TNK forged Yugraneft documents
o As the Moscow courts recognized in the suit by Yugranefts CEO, discussed
above, there was only one Yugraneft shareholder meeting on June 28, 2001, at
12:00 p.m., at 627 Old Arbat Street, Room 627, Moscow, Russia, which did not
result in the minutes which TNK created.
o Use of falsified documents in court is common in hostile takeovers.
TNK used armed militia to occupy Yugranefts offices.
o Raiders commonly use armed force in hostile takeovers.
Decisions by courts and regulators that were adverse to TNK were reversed or ignored.
Investigations were quashed.
o Local force and influence counts. Even if the target can persuade some court to
rule in its favor, or persuades a prosecutor to investigate, this matters little in the
end.
TNK engaged in improper related party transactions with Yugraneft.

o Hostile takeovers often involve ignoring legal restrictions on related party
transactions, designed to protect creditors and minority shareholders.
48. More generally, there have been thousands of hostile takeovers in Russia over the
last decade or so.49 These takeovers routinely involve the procured assistance of courts,
bankruptcy trustees, and often police and prosecutors. One might say that a hostile takeover in
49
See, for example, Volkov (2003), supra note 32 (the practice of hostile takeovers [through ordered
bankruptcies] began to spread in the beginning of 1999 and reached nation-wide scale by 2001, involving thousands
of cases each year). Astakhov (2008), supra note 9, at 75, lists roughly 2,000 companies in 10 industries (including
oil and gas) that were acquired in 2006 alone, often after hostile takeover raids.
21
Russia fought without corruption is like a war fought without guns. One can concede the
theoretical possibility of such cases, while doubting their existence in fact.
VI. TNKs Aggressive Tactics Against BP
A. The Creation of TNK-BP
49. Hoping to rescue something from its investment in Russia, BP responded to
TNKs theft of Chernogorneft and Kondpetroleum by doubling down on its investment. BP
agreed in 2001 to up its stake in Sidanko, by then controlled by TNK, from 10% to 25% in return
for TNK returning Chernogorneft to Sidanko, and agreeing to later buy a 25% stake in TNK. 50
In 2003, BP expanded its planned 25% investment in TNK into a full 50-50 joint venture, which
became TNK-BP. TNK-BP received TNKs oil and gas assets, including its stake in
Yugraneft.51 BP was aware, when it entered the joint venture, of TNKs reputation and tactics,
applied to Chernogorneft, Yugraneft, and other takeover targets.52
B. TNKs Ouster of Robert Dudley as CEO of TNK-BP
50. The negotiated truce between TNK and BP did not last. TNK became displeased
with the way in which the BP-selected CEO, Robert Dudley, was managing TNK-BP, and
50
Browne (2011), supra note 15, at 142-143 (exh. 11).
51
See, e.g., Sabrina Tavernese, A Rocky Road Led to Big Russian Oil Deal, N.Y. Times, Feb. 19, 2003
(noting that Alfa chairman Mikhail Fridman does not hesitate to apply bare knuckles to the countrys ramshackle
legal system, pioneering the use of the bankruptcy courts as a corporate takeover tool. (exh. 38)
52
With regard to Yugraneft, a BP internal email explains that Norexs fight is with the notorious TNK and
its even more notorious senior executive, German Khan, and that BPs official response should be that this is
nothing to do with us. Email from Sam Bennett to others within BP (Feb. 27, 2002). (exh. 39). With regard to
other TNK takeover targets, which BP surely was aware of as part of due diligence for its $6.8 investment in TNK-
BP, see the discussion above of Rospan and Slavneft; see also Goldman (2003), supra note 6, at 144 (noting Rospan,
Rospan Nosta, Black Sea Energy, Niznevartovsk Neftegaz (known as NNG), and Tagmet); Multiple Centers Are
Fridman and Companys Biggest Problem (2002), supra note 29 (discussing Orenburg Oil Company, known as
ONAKO). On TNKs takeover of Black Sea Energy, see Grace C. Allen and Dorothee J. Feils, A Russian
Investment that Ends Up in the Courts, not in the Money: The Case of Black Sea Energy Ltd., 6 Journal of the
International Academy for Case Studies 83 (2000).
22
resorted to strong-arm tactics to evict him from Russia, along with most other BP-appointed
personnel.53
51. TNKs displeasure with Dudley was no secret. What happened next was, one
might say, unusual. BP relied on expatriates to, among other things, ensure that TNK-BPs
procurement decisions were merit based. TNK had other preferences. A leaked U.S. Embassy
evaluation, reported by the Telegraph, discussed BPs concerns:54
According to a western TNK-BP official, the raids should be seen as the latest in this multi-year
attempt to drive out or scare away the foreign managers of the company, which made nearly $9
billion in profits last year. [TNK senior executive German] Khan has traditionally led the charge
to get rid of the western managers who have brought to the company western business practices
such as accountable corporate governance, transparency, and fiscal discipline. In particular,
senior western TNK-BP executives have pointed to the companys procurement as a sore point
for Khan and to a lesser extent the other billionaires. TNK-BP spends several billion dollars a
year on equipment and supplies. The BP half of TNK-BP has been able to limit directed
purchases and kick-backs, much to the chagrin of some of their business partners.
TNK arranged for most of the expats visas not to be renewed, forcing them to leave Russia. BP
responded with strong words. BP Chairman Peter Sutherland saw TNKs actions as:55
a return to the corporate raiding activities that were prevalent in Russia in the 1990s. Prime
Minister Putin has referred to these tactics as relics of the 1990s, but unfortunately our partners
continue to use them and the leaders of the country seem unwilling or unable to step in and stop
them.
52. TNK intensified its attacks, which included tax and Labor Code investigations of
TNK-BP (targeting Dudley and other expats), lawsuits by persons ostensibly unrelated to TNK,
denial of Dudleys visa renewal, and what BP called a sham proceeding in which Dudley was
53
One source of displeasure: TNK wanted TNK-BP to do business with unsavory counterparts, including
Cuba, Iran and North Korea, which Dudley opposed, and which would have created public relations and perhaps
legal problems for BP. Mark Franchetti, BP Has Only Held Us Back, Says Russian Oligarch Mikhail Fridman,
Sunday Times (July 20, 2008) (exh. 40).
54
Whats Behind the Raids on TNK-BP and BP, Sunday Telegraph (March 28, 2008) (exh. 41).
55
David Litterick, BP Vents Its Frustration on Russian Partners, Telegraph (June 6, 2008) (exh. 42).
23
barred from working in Russia for having violating the Labor Code. 56 Law firms representing
BP were raided by police.57 Dudley left Russia hurriedly and secretly and, worried about
personal safety, went into hiding. He was willing to tell colleagues only that he was not in the
US, and would move around as a precaution.58 Sutherland explained:59
[TNK] orchestrated a campaign of harassment to gain control of TNK-BP, [including]

manipulation of elements of the Russian state.
BP eventually caved in and agreed to replace Dudley with someone acceptable to TNK, as the
new CEO of TNK-BP, and to remove all BP-seconded employees from TNK-BP.60 That
someone was Mikhail Fridman, thus achieving TNKs goal of having day-to-day control over
TNK-BP.61
C. BPs Efforts to Deal with Rosneft Instead of TNK
53. Having failed to work with TNK, BP then tried to work around it. That effort
failed too. In early 2011, BP announced a huge Arctic exploration deal with Rosneft. TNK
blocked the deal, claiming that BP could invest in Russia only through TNK-BP. As usual,
TNKs tactics were unusual. They included: A suit by AAR (owner of TNK), and separate suit
in Tyumen oblast by a minority shareholder (with TNKs approval and likely at its prompting),
56
Court Bars Dudley from Post for Sham Labor Violations, Telegraph (Aug. 18, 2008) (posted Jan. 31, 2011)
(exh. 43).
57
Sofia Lind, Lawyers Wary Despite TNK-BP Deal, Legal Week (Sept. 11, 2008) (exh 44).
58
Tim Ross and Steven Swinford, BP boss Bob Dudley blamed new Rosneft partner Igor Sechin for black
plot against him, Telegraph (Feb. 1, 2011, but based on March 28, 2008 US Embassy internal document)) (exh. 45);
Russell Hotten, TNK-BP Chief in Secret Location Amid Safety Fears, Telegraph (July 25, 2008) (exh. 46). A
story a month later described Mr. Dudley as in a secret hiding place somewhere in Central Europe. Louise
Armitstead, TNK-BPs Chief Accuses Russians of Power Abuse, Telegraph (Aug. 23, 2008) (exh. 47).
59
Robert Pagnamenta, TNK-BP Chief Executive Robert Dudley Quits Russia, [London] Times (July 25, 2008)
(exh. 48).
60
BP Pulls Staff as AAR Ratchets Up Pressure (July 24, 2008) (posted Jan 31, 2011) (exh. 49).
61
See Joint BP-AAR Press Release, BP and AAR Agree on New Management Structure for TNK-BP (Oct. 21,
2011), at http://www.aar ru/en/press/news/item/636-bp-and-aar-agree-on-new-management-structure-for-tnk-
bp.html (Fridman to continue as CEO until 2013; Vekselberg and Khan also on management committee) (exh. 50).
24
each of which claimed billions of dollars in damages against BP.62 The minority shareholder suit
was followed by official raids on BPs Moscow office to seize documents in support of the
lawsuit. A source close to BP told the Wall Street Journal that the suit had no merit but such
suits often proceed in Russian courts, particularly if they have powerful local sponsors. 63 BP
prevailed on British Prime Minister David Cameron to speak publicly about Russian corruption
and to discuss the raids directly with Russian President Medvedev.64
54. TNKs actions against BP support the credibility of Norexs allegations about
corruption in the Yugraneft takeover. TNKs ready resort to aggressive tactics is, if nothing else,
consistent.
VII. The General Problem of Russian Judicial and Administrative Corruption
55. TNKs ability to manipulate Russian judicial and administrative resources, even
against powerful opponents such as Sidanko, Potanin, Rosneft, and BP, fits within a broader
pattern of widespread Russian corruption, and the ability of corporate raiders to harness
administrative resources. I review that larger problem here.
A. Statements by Russian Leaders
56. Early in the Putin era, Russian President Putin made some initial efforts to curtail
judicial and other official corruption. By 2003, these had worse than petered out Putin decided
62
On the suit and AARs endorsement of it, see BP Faces New Threat from Russian Partners, Guardian
(Oct. 19, 2011) (exh. 51).
63
For pieces of this story, see Gregory White and Guy Chazan, Russia Raids BPs Moscow Office, Wall St. J.,
Sept. 1, 2011 (exh. 52); Charles Clover and Sylvia Pfeifer, Armed forced raid BPs Moscow Offices, Fin. Times
(Aug. 31, 2011) (exh. 53). Camerons intervention was followed by a Russian court ruling suspending raids on BPs
offices. Russian courts step into TNK-BP, BP row, United Press International (Sept. 14, 2011) (exh. 54).
64
Louise Armitstead, David Cameron: UK Companies Put Off Russia Because of Corruption, Telegraph
(Sept. 12, 2011) (exh. 55).
25
to attack oligarch Mikhail Khodorkovski and dismantle his empire, in ways that both highlighted
and increased the pressure on judges to reach politically approved results.65
57. But early on, President Putin acknowledged that the Russian courts were often
corrupt, with the oligarchs among the corrupters. In his 2001 speech to the legislature, he stated
66
Today, it is extremely necessary that we have a judicial reform. . . . Not only for entrepreneurs,
but also for many people, trying to restore their rights in a legitimate way, legal proceedings have
failed to become either quick or just or fair. I am not saying this is always the case, but in many
cases, regrettably, this is so. . . .
Now about the business climate in the country. Regrettably, the ownership rights are still poorly
protected. . . . The wars of claimants to property does not end even after court decisions are
passed, while decisions themselves are often based on the pressure of interested sides rather than
on laws.
In 2003, he called making judges work more transparent a crucial reform goal, but did not
expect a quick solution, saying only that [w]e are going to keep working on this.67
58. Incoming Russian President Dmitri Medvedev complained in 2008 about legal
nihilism which involved corruption in the power bodies, and called for an anti-corruption
campaign. Once he was in office, his rhetoric ceased and a serious reform proposal never
came.68
59. Other sources, including opposition politicians when they still existed, were
blunter. For example, former Presidential candidate Grigori Yavlinsky commented in 2002:69
65
For general discussion of the dismantling of Yukos, see Richard Sakwa, The Quality of Freedom:
Khodorkovsky, Putin, and the Yukos Affair (2008).
66
Annual message of President Vladimir Putin to the Federal Assembly of the Russian Federation on April 3,
2001, official translation available at www.strana.ru (exh. 56).
67
Putin Calls for More Transparency in Russias Judicial System, INTERFAX, Jan. 24, 2003 (exh. 57); see also
Torrey Clark, Tycoons Talk Corruption in Kremlin, MOSCOW TIMES, Feb. 20, 2003 (exh. 58).
68
See Richard Sakwa, Dmitry Medvedevs Challenge, Open Democracy (May 7, 2008) (discussing
Medvedevs speeches), at www.opendemocracy net/article/governments/dmitri medvedev s challenge (exh. 59).
69
Sabrina Tavernese, An Executive-Suite Coup in Russia, N.Y. TIMES, July 2, 2002 (exh. 60).
26
Paying money, you can hire any authority for any purpose. You can hire the OMON
[special police] for money. You can initiate a court case against someone. The entire
system is being used. . . . [This battle is] a fight between the oligarch groups, and the
Russian government partially belongs to them.
Pyotr Mostovoy, former Deputy Minister of the State Property Committee, explained in 2003:
I often witness situations which are even worse than those when an unjust decision is made in
favor of one of the disputing parties when both parties are in the same weight. . . . I regularly see
such situations when unjust decisions are made in favor of the state when the state disputes with a
company. Its a usual practice. Even if there are no grounds [for the courts decision]. At the
[trial court level] such decisions are made in absolutely all cases, and if a dispute goes higher,
then its a toss-up.70
B. Statements by Senior Russian Judges and Scholars
60. The Chairs of the Supreme Arbitrazh Court, Venyamin Yakovlev, and the
Supreme Court, Vyacheslav Lebedev, have both spoken about corruption. In a 2003 speech, Mr.
Yakovlev discussed the critical problem of judicial corruption in hostile takeovers:71
Speaking of the reasons for corruption in the courts, Mr. Yakovlev named three main methods
used in the country to take over somebody elses property: illegal bankruptcy, illegal creation of
the management organs and structures of joint-stock companies, and illegal use of security
measures. These illegal means are utilized by the judges, the head of the Supreme Arbitrazh
Court stressed. Using them, one can paralyze the work of any well-functioning enterprise.
In a story about this speech, another judge discussed partiality on the Supreme Arbitrazh Court.
Mr. Lebedev viewed arbitrazh court corruption in hostile takeovers as routine, saying:72
Corruption among district judges in adjudicating claims brought by shareholders against

corporations, especially . . . security measures (i.e. injunctions against conducting of [shareholder
or board] meetings of corporations, etc.) has become routine.
61. Other respected former Russian judges have also spoken strongly and publicly
about judicial corruption. For example, arbitrazh court procedure expert and former judge
Sergey Pashin submitted an expert declaration on likely corruption in the Eastern District of New
York decision Films By Jove, which the court cited with approval, noting his impressive expert
70
Remarks of Pyotr Mostovoy, Duma Takeover Hearings (exh. 61) at 52.
71
Ekaterina Zapodinskaya, Judges Help to Capture Property, KOMMERSANT, June 19, 2003 (exh. 62)
72
Ekaterina Zapodinskaya, Judges Held a Peer Court Session, KOMMERSANT, June 17, 2003 (exh. 63).
27
credentials.73 The Films By Jove court, based on Judge Pashins declaration and other evidence,
found it apparent that the [Supreme] Arbitrazh Courts . . . decision was strongly influenced, if
not coerced, by the efforts of various government officials.74
62. Dean Yevgeni Sukhanov, Head of the Civil Law Department of Moscow State
University, and a principal drafter of the company law provisions of the Civil Code, testified:75
I see two main reasons for the [takeover] conflicts that have inundated our country. . . . [T]he
most important reason is that there are numerous cases where unlawful decisions are passed.
Including, I regret to say, court decisions. Indeed, almost all of these conflicts flare up with
decisions passed by courts of the first instance. . . . When I read those court decisions, my hair
literally stands on end.
C. Reports by Non-Russian Governmental and Quasi-Governmental Agencies
63. Government agencies and quasi-governmental agencies like the World Bank and
the EBRD are usually careful in their language. But for Russian corruption, even normally
circumspect sources make strong statements. I discuss the EBRDs views above. Similar
statements have been made by other credible sources. I offer here examples from the World
Bank, the Organisation for Economic Co-operation and Development (OECD), the State
Department, and the Council of Europe. All support the existence of pervasive corruption in
Russia, both at the time of the Yugraneft takeover and now.
64. A 2002 World Bank report, evaluating the Banks Russian assistance, notes in the
Executive Summary that Russia suffers from a weak rule of law, including corruption [and]
73
Films By Jove, 250 F. Supp. 2d 156, 197 (E.D.N.Y. 2003). Declaration of Sergie Anatolievich Pashin in
Films by Jove, Inc. v. Berov, No. Civ. A. 98-CV-7674 (DGT) (Docket 116) (E.D.N.Y.).
74
Id at 216. Judge Pashin submitted a declaration on likely corruption in the Yugraneft takeover, in the federal
predecessor to this case (exh. 64).
75
Duma Takeover hearings at 13-14 (exh. 61).
28
unreliable enforcement and an unreliable judiciary.76 World Bank President James Wolfenson
publicly commented on judicial [c]orruption by powerful economic interest groups.77
65. A 2002 OECD White Paper on Russian Corporate Governance discussed abuses
of the bankruptcy process, noting numerous instances where bankruptcy procedures have been
abused as a means to acquire assets or entire companies . . . to eliminate competitors, to strip
assets or to exclude certain shareholders.78 Stilpon Nestor, head of OECDs Corporate Affairs
Division, wrote that Russian courts are often described as corrupt and slow. Part of the capture
issue in Russia is related to the very strong dependence of courts on local authorities.79
66. The State Departments 2003 Background Note on Russia observed that Russias
judiciary and justice system are weak . . . [and] subject to political influence: 80 U.S.
Ambassador to Russia Alexander Vershbow decried favoritism toward local interests,
exacerbated by the weak and often corrupt judicial system, as all too frequent in cases
involving foreign investors.81
76
World Bank, ASSISTING RUSSIAS TRANSITION: AN UNPRECEDENTED CHALLENGE, at x, 3, 46 (2002) (exh.
65).
77
Andrew Jack, Former Soviet Union Warned on Corruption, FIN. TIMES, July 10, 2001 (exh. 66).
78
OECD, White Paper on Corporate Governance in Russia 103-104 (2002), available at www.oecd.org (exh.
67). I participated in the process leading to this White Paper and have confidence in its conclusions.
79
Stilpon Nestor, Corporate Reform in Russia and the Former Soviet Union: The First Ten Years (working
paper 2002), available at www.oecd.org (exh. 68). I know Mr. Nestor personally, worked with him on several
corporate governance reform projects, and have confidence that he would not lightly write such strong words. See.
e.g., Gainan Avilov, Bernard Black, Dominique Carreau, Oksana Kozyr, Stilpon Nestor & Sarah Reynolds, General
Principles of Company Law for Transition Economies, 24 JOURNAL OF CORP. LAW 190-293 (1999), English version
at http://ssrn.com/abstract=126539; Russian version at http://ssrn.com/abstract=127208.
80
United States Department of State, Bureau of European and Eurasian Affairs, Background Note: Russia
(May 2003), at www.state.gov/r/pa/ei/bgn/3183.htm (exh. 69). See also UNITED STATES DEPARTMENT OF STATE,
COUNTRY REPORTS ON HUMAN RIGHTS PRACTICES - 2002 (Russia) (Mar. 31, 2003), at
www.state.gov/g/drl/rls/hrrpt/2002/18388.htm (the judiciary continued to lack resources, suffered from
corruption, and remained subject to influence from other branches of the Government, and judges were
inadequately protected by the Government from threats by organized criminal defendants) (exh. 70).
81
Speech by Ambassador Vershbow at New Economic School, Moscow (May 22, 2003) (exh. 71).
29
67. In a strongly worded 2009 report, the Parliamentary Assembly of the Council of
Europe reported, with specific examples, multiple instances in which Russian judges who
resisted instructions from superiors or government officials on how to rule (a practice known as
telephone justice) were sanctioned and sometimes removed or forced to retire. 82 The Council
report discusses a hostile takeover case involving TogliattiAzot (known as ToAZ), in which a
Kremlin official, Valeri Boyev, threatened a Supreme Arbitrazh Court judge, Yelena Valyavina,
with nonrenewal if she didnt rule as instructed. For me, the only surprise is that Judge
Valyavina was willing to name Mr. Boyev. A second Arbitrazh court judge in Samara oblast
was dismissed after ruling for ToAZ.83
68. When sources like this speak so bluntly, one can be confident that there is a sound
basis for their statements. Indeed, in Films By Jove, a federal court found significant the
willingness of the State Department to state publicly such conclusions [about Russian judicial
corruption].84
69. Quotes and stories like those above can be replicated, essentially without limit.
The sources I cite provide many more examples, as does my prior expert report in the federal
action by Norex against many of the defendants in this action.85
D. Actions Against Lawyers and Journalists
82
Council of Europe, Parliamentary Assembly, Committee on Legal Affairs and Human Rights, Allegations of
Politically-Motivated Abuses of the Criminal Justice System in Council of Europe Member States (adopted by the
Committee on June 23, 2009), available at http://assembly.coe.int/Documents/WorkingDocs/doc09/edoc11993.pdf,
at 4 (exh. 72). The report focuses on criminal justice, but also discusses pressure on judges in takeover cases. I also
have no reason to think pressure is less in civil than in criminal cases. The term telephone justice refers to the
common practice, in the Soviet Union, of judges taking instructions from Communist Party officials on how to
decide politically sensitive cases.
83
The story is reported in Natalya Krainova, Judge Tells of Kremlin Threat, Moscow Times (May 14, 2008)
(exh. 73). On dismissal of the regional judge, see Council of Europe Report (2008), supra note 52, at 26.
84
Films by Jove, 250 F. Supp. 2d 156, 207 (E.D.N.Y. 2005).
85
Expert Declaration of Prof. Bernard Black, Norex Petroleum Ltd v. Access Indus., Inc., No. 02 Civ. 1499
(S.D.N.Y.) (exh. 74).
30
70. Lawyers who oppose oligarchs also face risks. Their offices often get raided, as
with BPs lawyers in its 2008 battle with TNK over control of TNK-BP. Some are disbarred or
threatened with criminal prosecution. Some flee, as did Canadian lawyer Robert Amsterdam,
who had been part of Khodorkovskis defense team.86 Some are arrested. Some are killed. In
one well-known case, U.S. investor William Browder had his visa revoked (likely because he
asked too many questions as a minority director), and faced a coordinated attack on his Russian
investment fund, Hermitage Capital.87 Several of his lawyers fled the country. One who didnt,
Sergei Magnitsky, was arrested, held for over a year without charges, and died in jail at age 37
after being denied medical treatment.88 Journalists who report on the oligarchs and corruption
are often threatened, beaten, or killed as well.89 Those who were killed include Paul Klebnikov,
a reporter for Forbes who had written about the oligarchs, including a book on Boris
Berezovsky.90
E. Raiders Advisors and Bribe Lists
71. A particularly wonderful (or awful) source is a candid interview with Alexander
Volkov, President of a Russian firm that assisted in hostile takeovers. Mr. Volkov proudly lists
Alfa Group as among his clients. He explains:
86
On Amsterdam and disbarment and other actions against Khodorkovskis Russian counsel, see Fred Weir,
Lawyers Who Defended Jailed Russian Oil Tycoon Feeling Heat from Kremlin, Canadian Press (Oct. 19, 2005)
(exh. 75); Christopher Stewart, Enemy of the State, Portfolio (Aug. 2008). (exh. 76).
87
The extraordinary Hermitage facts are summarized in a declaration by Hermitages counsel, Declaration of
Neil Micklethwaite, In re Application of Hermitage Capital Mgmt Ltd for Judicial Assistance to Conduct Discovery
for Use in a Foreign Proceeding, Civ. No. M19-116 (LTS) (S.D.N.Y.) (exh. 77). The Council of Europe Report
(2009), supra note 52, also discusses what it calls the almost unbelievable (but well documented) story of the
attack. I was an advisor to Hermitage Capital during the 1990s with regard to two of its Russian investments.
88
See Gregory White, U.S. Investors Lawyer Dies in Moscow Jail: Death of Attorney for William Browders
Heritage Capital Stokes Concerns About Reforms in Russias Judicial System, Wall St. J. (Nov. 18, 2009) (exh. 78).
89
See, e.g., Lynda Edwards, Russia Claws at the Rule of Law, ABA Journal (July 2009) (exh. 79). For
additional examples, see Black, Kraakman and Tarassova (2000), supra note 11, at 1774 n.79.
90
On Klebnikov reporting on the oligarchs and his murder, see Otto Pohl, The Assassination of a Dream, New
York Magazine (May 21, 2005) (exh. 80).
31
It is not possible to work in the bankruptcy sphere without giving bribes, that is why we use
Arbitrazh Courts, which developed a price list for the decisions regarding declaring a company
bankrupt.
Q. Please, name approximate [bribe] rates
They are different in different regions. On Kamchatka it is $10,000. In Moscow, of course
prices are much higher. . . .
Q. Who are your customers?
Actively developing [industrial groups] such as MDM, Alfa. [Last summer we] developed the
[Rospan] Nosta bankruptcy project for Alfa. . . .
Q. Who, in your opinion, [supports] the present version of the [Bankruptcy] Law
Three groups, which shared between them administrative resources: MDM, Russian Aluminum
and Alfa Group. Some of the heads of the regions, where not everything is stolen yet.91
72. Standard bribes have developed for particular actions. The chart below was
published in 2003 and cited as realistic by key Duma members in 2003 hearings on hostile
takeovers (these hearings provide a good overview of the views of Duma members on the
pervasiveness of hostile takeovers, and the central role of judicial corruption in these
takeovers):92
Department Type of Service Cost

Prosecutor close a criminal case $15-350,000
bring a criminal case to order $50,000
seize a shareholder register $20,000
Arbitrazh court Win a hopeless case $10-100,000
Seize property $5-15,000
Court levy Speed up legal process 7% of the value of the suit
State Duma A favor from a deputy $1-5,000
Government apparatus Arrange a government regulation from $100,000 to 2% of the
value in question
Ministry of Internal Affairs illegal administrative prosecution from $500
(security police) arrest with planting heroin $10,000-$30,000
forcible seizure of offices from $20,000
91
Olga Solovyanenko, Price-List for Bankruptcy, NEZAVISIMAYA GAZETA, Sept. 28, 2001 (Russian original
and translation: exh. 81).
92
MERGERS AND ACQUISITIONS (April 2003) (exh. 82), republished in How Much Does a Hostile Takeover
Cost, KOMMERSANT, May 13, 2003 (Russian original and translation: exh. 83), and Ilya Gorbunov, Suppression of
Swallowers: Deputies Intend to Take Control of Courts, FINANSOVYE IZVESTIA (Business section of Izvestia
(Moscow) (May 13, 2003) (Russian original and translation: exh. 84). The translation in text is loose, to capture
meaning rather than precise wording. This price list was mentioned with approval in the Duma Takeover Hearings
(2003) (exh. 61) at 6, 18, by Sergey Generalov, Chairman of the State Duma Committee for the Protection of
Investor Rights ([T]hese price lists are . . . close to reality, to what people, including entrepreneurs, write to us
about); and Nikolai Kovalyov, Chairman of the State Duma Committee for Combating Corruption (You have seen
the price list, it is real.).
32
Tax police arrange an audit and search from $10,000 to $50,000
73. In Moscow, I have personal knowledge of sources that advise lawyers of the
bribes expected by particular judges. If both parties have similar political stature and both pay
similar bribes, the judge will hopefully decide the case fairly.
VIII. Evidence from Multi-Country Surveys
74. The excerpts in Part VII provide a qualitative picture of the Russian judiciary. I
turn next to quantitative evidence from multi-country surveys. Russia ranks poorly on all of
these surveys. I report both the most recent available scores and those for the period relevant to
this case. These surveys reflect the likelihood of partiality in a typical dispute, and understate
that likelihood when an oligarch with TNKs track record is on one side, with a small foreign
company is on the other.
Transparency International Corruption Perceptions Index (CPI): In 2001, Russia ranked 82

out of 99 ranked countries, with a corruption rating of 2.4 (scale from 1 to 10, a lower score
indicates higher corruption). As of 2010, it had fallen to 154 of 178, with a 2.1 score.93
Transparency International Bribe Payers Index (BPI): In 2002, Russian companies ranked
last out of 21 countries in their propensity to pay bribes to government officials. In 2008 (the
most recent survey available), it again ranked last, out of 22 countries.94
International Country Risk Guide (2002) gives Russia a 1 ranking for corruption (on a 0-6
scale, low scores are worse). Of 140 surveyed countries, only Zimbabwe earned a 0; 19
countries shared Russias 1 rating.95
Global Competitiveness Report. The 2002-2003 report ranked Russia 71 out of 80 countries
for contracts and law, which includes a component on judicial independence, and 61/80 for
corruption. In the 2010-2011 report, Russia ranks 118 of 139 for institutions, which
includes components for corruption and judicial independence.96
93
The surveys are available at: http://www.transparency.org/policy research/surveys indices/cpi (the 2001 and
2010 surveys are attached as exhibits 85 and 86, respectively).
94
http://www.transparency.org/policy research/surveys indices/bpi (the 2002 and 2008 surveys are attached as
Exhibits 87 and 88).
95
PRS Group, International Country Risk Guide (updated monthly, excerpts from May 2002)
96
Recent Reports are available at www.weforum.org/reports (2002-2003 and 2010-2011 reports: exhs. 89 and
90).
33
Freedom House: In 2002, Russia ranked 5 on a 1(best) to 7 (worst) scale for political and
economic liberty, which includes components for judicial independence and general
corruption. In 2011, it ranked 5 for the civil liberties subindex, which includes judicial
independence, corruption and other rule of law questions.97
World Bank, Governance Matters: The Governance Matters series aggregates data from all
available surveys. In the most recent (2008) survey, Russia scored0.91 (on a -2.5 to +2.5
scale) for Rule of Law, including judicial independence, and -0.98 for control of corruption
in general. In 2002, its scores were 0.89 and -0.91.98
IX. Conclusion
75. There is no reasonable basis for doubting that:
TNKs controllers are among the most powerful oligarchs in Russia;

TNK is a notorious and aggressive user of administrative resources [read:
judicial and administrative corruption];
TNK is a notorious and aggressive practitioner of hostile takeovers, in which
judicial corruption is an essential element;
Corruption, as practiced by TNK, includes both bribes and threats. Bribes alone
would not have allowed TNK to defeat Sidanko in the battle over Chernogorneft
and Kondpetroleum;
TNK fabricated minutes of a Yugraneft shareholder meeting, and used these fake
minutes as cover for an armed takeover of Yugranefts offices and oil fields;
The flagrantly pro-TNK decisions in the Chernogorneft and Yugraneft takeovers
were without basis in Russian law and bear the hallmarks of corruption;
Parties with far more clout than Norex, including BP, Rosneft, and Sidanko, have
found themselves unable to get fair decisions in the Russian courts in disputes
with TNK.
76. Corruption, violence, and use of administrative resources have long been central
to the power and wealth of TNK and its principals. Blavatnik and Vekselberg were survivors of
Russias notorious aluminum wars of the 1990s (fought with gun battles for control of plants
and assassination of opponents). These battles led to consolidation of this industry under Rusal
97
The 2000 report (exh. 91) notes that [t]he judiciary is not fully independent and is subject to political
interference, corruption, inadequate funding, and a lack of qualified personnel. Data and index descriptions are
taken from various pages on the Freedom House website, at www.freedomhouse.org.
98
Daniel Kaufmann, Aart Kraay & Massimo Mastruzzi, Governance Matters VIII: Aggregate and Individual
Governance Indicators 1996-2008 (working paper 2009), at http://ssrn.com/abstract=1424591 (exh. 92).
34
Appendix A: Curriculum Vitae
CURRICULUM VITAE
Bernard S. Black
October 2011
Nicholas D. Chabraja Professor, Northwestern University:

School of Law and Kellogg School of Management, Finance Dept.
Faculty Associate, Institute for Policy Research
tel: (312) 503-2784 (law school); 847-491-5049 (Kellogg)
cell: (650) 773-0955
e-mail: bblack@northwestern.edu
Research on SSRN at http://ssrn.com/author=16042
_____________________________________________________________________________
EMPLOYMENT
2010- Northwestern University: Nicholas D. Chabraja Professor, School of
Law and Kellogg School of Management
2004-2010 University of Texas: Hayden W. Head Regents Chair for Faculty
Excellence, School of Law, Professor of Finance, McCombs School of
Business, and Director, Center for Law, Business, and Economics
1998-2004: Stanford Law School: Professor of Law (George E. Osborne Professor
2003-2004)
1988-1998: Columbia Law School: Professor of Law (Assoc. Prof. 1988-1991)
1994-1995: Senior Policy Advisor (resident in Moscow, Russia), Harvard Institute
for International Development, Russia Legal Reform Project
1987-1988: Counsel to Commissioner Joseph A. Grundfest, Securities and
Exchange Commission
1983-1987: Private practice with Skadden, Arps, Slate, Meagher & Flom, New
York, specializing in mergers and acquisitions, securities law, and
corporate law
1982-1983: Law clerk to Judge Patricia M. Wald, U.S. Court of Appeals, District of
Columbia Circuit
PRINCIPAL COURSES
Corporations
Corporate Finance
Corporate Acquisitions
Health Law
Law and Economics
1
PROFESSIONAL BOOKS
Bernard Black, David Hyman, Charles Silver, Kathryn Zeiler & William Sage, To Sue is
Human: A Profile of Medical Malpractice Litigation (Yale Univ. Press, forthcoming 2012)
, , , , ,
- K, , ,
:
( , 2010, 332 .) (http://ssrn.com/abstract=1528182)101
Bernard Black, Reinier Kraakman & Anna Tarassova, A Guide to the Russian Law on Joint
Stock Companies (Kluwer Law International 1998, 1088 pp.)102
Ronald Gilson & Bernard Black, The Law and Finance of Corporate Acquisitions (Foundation
Press, 2d ed. 1995, 1603 pp.), and 2003-2004 supplement (460 pp.) (3d ed in preparation with
Jeffrey Gordon and Charles Whitehead)
Negotiating and Drafting the Acquisition Agreement (ALI-ABA Transactional Skills Series
1998, 303 pp.)
Ronald Gilson & Bernard Black, (Some of) the Essentials of Finance and Investment
(Foundation Press 1993; 252 pp.)
PROFESSIONAL ARTICLES AND CIRCULATING WORKING PAPERS

2011 Bernard Black & Woochan Kim, The Effect of Board Structure on Firm Value: A Multiple
Identification Strategy Approach Using Korean Data xx Journal of Financial Economics yyy-
zzz (forthcoming 2011) (nearly final version at http://ssrn.com/abstract=968287)103
Bernard Black, Antonio Gledson de Carvalho and Erica Christina Rocha Gorga, What Matters
and for Which Firms for Corporate Governance in Emerging Markets?: Evidence from Brazil
(and Other BRIK Countries) xx Journal of Corporate Finance xxx-yyy (forthcoming 2011)
(http://ssrn.com/abstract=1832404)
Bernard Black, David Hyman and Charles Silver, Settlement at Policy Limits and Insurer Duty to
Settle: Evidence From Texas, 8 Journal of Empirical Legal Studies 48-84 (2011)
John Armour, Brian Cheffins & Bernard Black, Delawares Balancing Act, xx Indiana Law
Review yyy-zzz (forthcoming 2011) (http://ssrn.com/abstract=1677400)
Vladimir Atanasov, Bernard Black & Conrad Ciccotello, Law and Tunneling, 37 Journal of
Corporation Law xxx-yyy (forthcoming 2011) (http://ssrn/com/abstract=1444414)
101
Bernard Black (main author), with Anastasiya Farukshina, Brian Cheffins, Martin Gelter, Hwa-Jin Kim,
Richard Nolan, Matthias Siems and Linia Prava law firm (co-authors), Legal Regulation of the Liability of
Members of Management Organs: An Analysis of International Practice) (Alpina Publishers 2010, 332 pp.) (in
Russian).
102
Russian version published as
( (Labirint Press) 1999, 720 pp.) (Russian version at http://ssrn.com/abstract=246670).
103
Received Pacific Basic Finance Journal Award as best paper presented at the Asia Finance Association 2007
annual meeting.
2
Vladimir Atanasov, Bernard Black & Conrad Ciccotello, Self-Dealing by Corporate Insiders:
Legal Constraints and Loopholes, in Brett McDonnell and Claire Hill, eds., Research Handbook
on the Economics of Corporate Law (forthcoming 2011) (http://ssrn/com/abstract=1714591)
Bernard Black, Brian Cheffins & Michael Klausner, Shareholder Suits and Outside Director
Liability: The Case of Korea, 10 Journal of Korean Law 325-362 (2011)
(http://ssrn.com/abstract=628223)104
David A. Hyman, Charles Silver & Bernard Black, Does Tort Reform Affect Physician Supply?
Evidence from Texas (working paper 2011), at http://ssrn.com/abstract=1xxxxxx
, .
: ,
( 2011), . 16-22 (http://ssrn.com/abstract=1870206)105
Public Reporting of HAI Rates: What We (Mostly Dont) Know, Clinical Governance
(forthcoming 2011)
Bernard Black & Simon Gervais, Incentives in the Market for Mortgage-Backed Securities
(working paper July 2011) (http://ssrn.com/abstract=1xxxxxx)
Myungho Paik, Bernard Black, David A. Hyman, and Charles Silver, Will Tort Reform Bend the
Health Care Cost Curve: Evidence from Texas (working paper May 2011b)
Myungho Paik, Bernard Black, David A. Hyman, William Sage, and Charles Silver, How Do the
Elderly Fare in Medical Malpractice Litigation, Before and After Tort Reform?: Evidence from
Texas, 1988-2007 (working paper May 2011) (http://ssrn.com/abstract=1605331)
Hyun Kim and Bernard Black, Does Hospital Infection Reporting Affect Actual Infection Rates,
Reported Rates, or Both? A Case Study of Pennsylvania (working paper June 2011)
Bernard Black, Woochan Kim, Hasung Jang & Kyung-Suh Park, How Corporate Governance
Affects Firm Value: Evidence on Channels from Korea (working paper June 2011)
Zenon Zabinski and Bernard Black, The Association Between Medical Malpractice Risk and
Healthcare Quality: Evidence from Texas (working paper July 2011), at
http://ssrn.com/abstract=xxxxxxx.
Kowsar Yousefi and Bernard Black, Settlement Bargaining With an Insurer Duty to Settle,
Theory and Evidence from Texas Medical Malpractice Claims (working paper July 2011), at
http://ssrn.com/abstract=xxxxxxx.
104
Shorter version published as Shareholder Suits Against Outside Directors of Korean Companies, in Hwa-Jin
Kim, ed., Korean Business Law xxx-yyy (forthcoming 2012). Prepublication draft reprinted in 3 ICFAI (Institute
of Chartered Financial Analysts of India) Journal of Corporate and Securities Law 66-89 (May 2006). Originally
prepared for Young-Jae Lim, ed., Corporate Governance and the Capital Market in Korea (planned book, not
published).
105
Bernard Black & Anastasiya Farukshina, Stock Options as Incentives for Company Executives: An Overview
of International Experience, Joint Stock Companies and Notaries (July 2011) (in Russian). A loose English
translation is available at http://ssrn.com/abstract=1874144.
3
Vladimir Atanasov, Bernard Black and Inessa Love, Causal Inference Strategies in Corporate
Finance and Corporate Governance Research (working paper May 2011)
Vladimir Atanasov, Bernard Black, and Conrad Ciccotello, A Causal Inference Critique of
Market-Based Measures of Damages for Securities Fraud (working paper April 2011)
2010 Vladimir Atanasov, Bernard Black, Conrad Ciccotello & Stanley Gyoshev, How Does Law Affect
Finance? An Examination of Equity Tunneling in Bulgaria, 96 Journal of Financial Economics
155-173 (2010) (nearly final version at http://ssrn.com/abstract=902766)
Bernard Black, David Hyman and Charles Silver, OConnell Early Settlement Offers: Toward
Realistic Numbers and Two-Sided Offers, 7 Journal of Empirical Legal Studies 379-401 (2010)
Bernard Black, Antonio Gledson de Carvalho and Erica Christina Rocha Gorga, Corporate
Governance in Brazil, 11 Emerging Markets Review 21-38 (2010) (nearly final version at
http://ssrn.com/abstract=1152454)
N. Balasubramanian, Bernard Black & Vikramaditya Khanna, The Relation Between Firm-Level
Corporate Governance and Market Value: A Study of India, 11 Emerging Markets Review
319-340 (2010) (nearly final version at http://ssrn.com/abstract=1586460)
,
, ,
: ( 2010)
Myungho Paik, David A. Hyman, Bernard Black & Charles Silver, How Low Can You Go:
Nursing Home Litigation in Texas and Tort Reform (working paper 2010)
(http://ssrn.com/abstract=1xxxxxx)
Due Diligence Failures (Pomerantz lecture at Brooklyn Law School, March 2009), Brooklyn
Law Review (forthcoming) (http://ssrn.com/abstract=1xxxxxx)
John Armour, Brian Cheffins & Bernard Black, Is Delaware Losing Its Cases? (working paper
Feb. 2010) (http://ssrn.com/abstract=1578404)
2009 Bernard Black, David Hyman and Charles Silver, The Effects of Early Offers on Settlement:
Evidence From Texas Medical Malpractice Cases, 6 Journal of Empirical Legal Studies 723-
767 (2009) (http://ssrn.com/abstract=1112135)
David Hyman, Bernard Black, Charles Silver & William Sage, Estimating the Effect of Damage
Caps in Medical Malpractice Cases: Evidence from Texas, 1 Journal of Legal Analysis 355-
Bernard Black, Antonio Gledson de Carvalho and Erica Christina Rocha Gorga, The Corporate
Governance of Privately Controlled Brazilian Firms, 7 Revista Brasileira de Finanas 385-428
(2009) (http://ssrn.com/abstract=1003059) (more detailed version of Corporate Governance in
Brazil, for Brazilian audience)107
106
Bernard Black & Anastasiya Farukshina, D&O Insurance, Indemnification, and Advancement of Legal
Expenses, Joint Stock Companies: Issues of Corporate Governance (June 2010) (in Russian).
107
Portuguese version, A Governana Corporativa das Empresas Brasileiras com Controle Privado Nacional,
4
John Armour, Bernard Black, Brian Cheffins and Richard Nolan, Private Enforcement of
Corporate Law: A Comparative Empirical Analysis of the UK and the US, 6 Journal of
Empirical Legal Studies 687-722 (2009) (http://ssrn.com/abstract=1105355)
,
,
: (, 2009)
, e

, :
( 2009) (http://ssrn.com/abstract=1527872)109
,
,
: ( 1, ; 2, 2009)
,
: , ,
( 2009) (http://ssrn.com/abstract=1359829)111
David Hyman, Bernard Black & Charles Silver, Waiting for the Big One: The Economics of
Plaintiff-Side Personal Injury Practice (working paper August 2009)
Vladimir Atanasov, Bernard Black, Conrad S. Ciccotello & Matthew Sass, Incorporating
Tunneling Risk into Equity Valuation: An Application to the Oil and Gas Industry (working
paper 2009) (http://ssrn.com/abstract=1443463)
Vladimir Atanasov, Bernard Black & Conrad Ciccotello, Unbundling and Measuring Tunneling
(working paper December 2008) (http://ssrn/com/abstract=1030529)
N. Balasubramanian, Bernard Black & Vikramaditya Khanna, Firm-Level Corporate Governance
in India (working paper, January 2009) (http://ssrn.com/abstract=992529)
available at http://ssrn.com/abstract=1528183.
108
Bernard Black & Anastasiya Farukshina, Practical Experience of Other Countries in Imposing Liability on
Members of the Board of Directors for Breach of Fiduciary Duty under Company Law, Joint Stock Companies:
Issues of Corporate Governance (December 2009) (in Russian).
109
. (Bernard Black & Anastasiya Farukshina, Liability of Directors for Actions with Regard to Subsidiary and
Dependent Companies, Joint Stock Companies: Issues of Corporate Governance (Sept. 2009) (in Russian).
110
Bernard Black & Anastasiya Farukshina, The Concepts of Reasonableness and Good Faith in Russian
Legislation and International Practice, Joint Stock Companies: Issues of Corporate Governance (part 1, April;
part 2, May 2009) (in Russian).
111
Bernard Black & Anastasiya Farukshina, The Measure of Damages for Corporate Directors: International
Experience, Journal Corporate Disputes (March 2009) (in Russian). Revised version published as
: ,
: , ( 2010) (The Measure of
Damages for Corporate Directors: International Experience, Joint Stock Companies: Issues of Corporate
Governance (March 2010) (in Russian).
5
2008 Charles Silver, Kathryn Zeiler, Bernard Black, David Hyman & William Sage, Malpractice
Payouts and Malpractice Insurance: Evidence from Texas Closed Claims, 1990-2003, 33 The
Geneva Papers on Risk and Insurance: Issues and Practice 177-192 (2008)
(http://ssrn.com/abstract=983199) (short version of PhysiciansInsurance Limits and Malpractice
Payouts)
Henry T.C. Hu & Bernard Black, Equity and Debt Decoupling and Empty Voting II: Importance
and Extensions, 156 University of Pennsylvania Law Review 625-739 (2008)
Henry T.C. Hu & Bernard Black, Equity, Debt, and Hybrid Decoupling: Governance and
Systemic Risk Implications 14 European Financial Management 663-709 (2008) (nearly final
version at http://ssrn.com/abstract=1084075)113
Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Mathias Siems &
Linia Prava, Legal Liability of Directors and Company Officials Part 2: Court Procedures,
Indemnification and Insurance, and Administrative and Criminal Liability (Report to the Russian
Securities Agency), 2008 Columbia Business Law Review 1-171
Bernard Black, David Hyman, Charles Silver & William Sage, Defense Costs and Insurer
Reserves in Medical Malpractice and Other Personal Injury Cases: Evidence from Texas, 1988-
2004, 10 American Law and Economics Review 185-245 (2008)
Charles Silver, David Hyman and Bernard Black, The Impact of the 2003 Texas Medical
Malpractice Damages Cap on Physician Supply and Insurer Payouts: Separating Facts From
Rhetoric, Texas Advocate 25-34 (Fall 2008) (http://ssrn.com/abstract=1139190)115
Equity Decoupling and Schedule 13D (working paper June 2008), at
2007 Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Mathias Siems &
Linia Prava, Legal Liability of Directors and Company Officials Part 1: Substantive Grounds for
Liability (Report to the Russian Securities Agency), 2007 Columbia Business Law Review 614-
799 (http://ssrn.com/abstract=1010306)116
112
Chosen as one of top ten corporate and securities law articles for 2008 (survey conducted by Robert
Thompson, at http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx). Summary
published as Hedge Funds, Decoupling and Regulation, in Administrative and Regulatory Law News (Amer.
Bar Assn, Section of Admin. Law and Practice), Winter 2008, at 4-5.
113
Practitioner-oriented version published as Debt and Hybrid Decoupling: An Overview, M&A Lawyer,
April 2008, at 1, 4-9 (http://ssrn.com/abstract=960512).
114
The full Report, Comparative Analysis on Legal Regulation of the Liability of Members of the Board of
Directors and Executive Organs of Companies (2006), is available at http://ssrn.com/abstract=1001990 (English
version) and http://ssrn.com/abstract=1001991 (Russian version).
115
Reprinted in P.L. Jayanthi Reddy ed., Medical Malpractice Liability: Emerging Issues 130-152 (2009).
116
The full Report, Comparative Analysis on Legal Regulation of the Liability of Members of the Board of
Directors and Executive Organs of Companies (2006), is available at http://ssrn.com/abstract=1001990 (English
version) and http://ssrn.com/abstract=1001991 (Russian version).
6
Bernard Black, Brian Cheffins, Martin Gelter, Hwa-Jin Kim, Richard Nolan, Matthias Siems and
Linia Prava law firm, Report to Russian Center for Capital Market Development: Comparative
Analysis on Legal Regulation of the Liability of Members of the Executive Organs of Companies
(2007) (http://ssrn.com/abstract=1001990) (English version) (Russian version,

. at http://ssrn.com/abstract=1001991)117
Bernard Black and Vikramaditya Khanna, Can Corporate Governance Reforms Increase Firms
Market Values? Event Study Evidence from India, 4 Journal of Empirical Legal Studies 749-
796 (2007) (http://ssrn.com/abstract=914440)118
David Hyman, Bernard Black, Kathryn Zeiler, Charles Silver & William Sage, Do Defendants
Pay What Juries Award?: Post-Verdict Haircuts in Texas Medical Malpractice Cases, 1988-
2003, 4 Journal of Empirical Legal Studies 3-68 (2007) (http://ssrn.com/abstract=914415)
Kathryn Zeiler, Charles Silver, Bernard Black, David Hyman & William Sage, Physicians
Insurance Limits and Malpractice Payments: Evidence from Texas Closed Claims, 1990-2003, 36
Journal of Legal Studies s9-s45 (2007) (nearly final version at
http://ssrn.com/abstract=981192)119
Henry Hu & Bernard Black, Hedge Funds, Insiders, and the Decoupling of Economic and Voting
Ownership: Empty Voting and Hidden (Morphable) Ownership, 13 Journal of Corporate
Finance 343-367 (2007) (finance-oriented version of The New Vote Buying) (nearly final version
at http://ssrn.com/abstract=874098)120
2006 Bernard Black, Hasung Jang & Woochan Kim, Does Corporate Governance Affect Firms
Market Values? Evidence from Korea, 22 Journal of Law, Economics and Organization 366-
413 (2006) (nearly final version at http://ssrn.com/abstract=311275)121
Bernard Black, Hasung Jang & Woochan Kim, Predicting FirmsCorporate Governance
Choices: Evidence from Korea, 12 Journal of Corporate Finance 660-691 (2006) (nearly final
version at http://ssrn.com/abstract=428662)
Henry Hu & Bernard Black, The New Vote Buying: Empty Voting and Hidden Ownership, 79
Southern California Law Review 811-908 (2006) (http://ssrn.com/abstract=904004)
Henry Hu & Bernard Black, Empty Voting and Hidden Ownership: Taxonomy, Implications, and
Reforms, 61 Business Lawyer 1011-1070 (2006) (http://ssrn.com/abstract=887183) 122
117
A gently updated version of this Report was published in book form in 2010. See above.
118
Reprinted in Robert Cooter & Francesco Parisi, eds., Legal Institutions and Economic Development 145-
192 (2010).
119
Reprinted in Daniel Schwarcz, ed., The Law and Economics of Insurance xxx-yyy (forthcoming 2011).
120
Reprinted in Joseph McCahery & [to come], [title and details of Hedge Funds book to come].
121
Received Maekyung Economist Award (2007) from Maeil Business News as best article in economics and
business for 2006 written by Korean authors. Summarized in Korean in Bank of Korea, Economic and Monetary
Policy (forthcoming 2007).
122
Thompson, at http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx). For a
7
Bernard Black, Brian Cheffins & Michael Klausner, Outside Director Liability, 58 Stanford Law
Review 1055-1159 (2006) (http://ssrn.com/abstract=894921)123
Brian Cheffins & Bernard Black, Outside Director Liability Across Countries, 84 Texas Law
Review 1385-1480 (2006) (http://ssrn.com/abstract=438321)
Bernard Black, Brian Cheffins & Michael Klausner, Outside Director Liability: A Policy
Analysis, 162 Journal of Institutional and Theoretical Economics 5-31 (2006)
Bernard Black, Brian Cheffins & Michael Klausner, Nicht-geschftsfhrende Direktoren,
Haftungsrisiko und Corporate Governance: Eine rechtsvergleichende Analyse (Outside
Directors, Liability Risk and Corporate Governance: A Comparative Analysis), in Stefan
Grundmann, Hans-Peter Schwintowski, Reinhard Singer & Martin Weber, eds., Anleger- und
Funktionsschutz durch Kapitalmarktrecht (Investor and Market Protection through
Capital Market Laws) 121-145 (2006) (English version at (http://ssrn.com/abstract=800584)
(German version at http://ssrn.com/abstract=800604)
Bernard Black, Inessa Love & Andrei Rachinsky, Corporate Governance Indices and Firms
Market Values: Time-Series Evidence from Russia, 7 Emerging Markets Review 361-379
(2006) (nearly final version at http://ssrn.com/abstract=866988) (Russian version at
http://ssrn.com/abstract=1435838)125
Bernard Black & Paul Caron, Ranking Law Schools: Using SSRN to Measure Scholarly
Performances, in Symposium, The Next Generation of Law School Rankings, 81 Indiana Law
Journal 83-139 (2006) (http://ssrn.com/abstract=784764)
2005 Bernard Black, Charles Silver, David Hyman & William Sage, Stability, Not Crisis: Medical
Malpractice Claim Outcomes In Texas, 1988-2002, 2 Journal of Empirical Legal Studies 207-
Bernard Black, Brian Cheffins & Michael Klausner, Liability Risk for Outside Directors: A
Cross-Border Analysis 11 European Financial Management 153-171 (2005)
(http://ssrn.com/abstract=682507) (summary, finance-oriented version of Outside Director
Liability After WorldCom and Enron and Outside Director Liability Across Countries)126
practitioner-oriented version, see Henry Hu & Bernard Black, Empty Voting and Hidden (Morphable) Ownership,
M&A Lawyer, March 2007, at 9-12.
123
Thompson, at http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx).
124
Reprinted in xx ICFAI (Institute of Chartered Financial Analysts of India) Journal of Corporate and
Securities Law yy-zz (2007).
125
Translated into Russian and reprinted in 2007 Russian Yearbook of Commercial Law 459-489
(. . , . , . , :
, ()
) (. . )).
126
Revised version published in John Armour & Joseph McCahery eds., After Enron: Improving Corporate
Law and Modernising Securities Regulation in Europe and the US 343-366 (2006).
8
Bernard Black, Brian Cheffins & Michael Klausner, Outside Director Liability Risk: Much Did
WorldCom and Enron Change the Rules?, Bloomberg Law Reports: Corporate Governance
1, 8-11 (July 2005)127
2004 Sanjai Bhagat, Bernard Black & Margaret Blair, Relational Investing and Firm Performance, 27
Journal of Financial Research 1-30 (2004) (http://ssrn.com/abstract=391262)
Bernard Black, Brian Cheffins & Michael Klausner, Outside Directors and Lawsuits: What are
the Real Risks?, McKinsey Quarterly 70-78 (2004, No. 4) (http://ssrn.com/abstract=590913)
(condensed version of Liability Risk for Outside Directors: A Cross-Border Analysis)128
Bernard Black, Brian Cheffins & Michael Klausner, Outside Director Liability (Before Enron
and WorldCom), (working paper 2004) ((http://ssrn.com/abstract=382422) (early version of
Outside Director Liability, not separately published)
2003 Bernard Black & Anna Tarassova, Institutional Reform in Transition: A Case Study of Russia, in
10 Supreme Court Economic Review 211-278 (2003) (conference issue)
The Role of Self-Regulation in Supporting Koreas Securities Markets , 2(3) Journal of Korean
Law 17-38 (2003) (http://ssrn.com/abstract=293565)130
2002 Bernard Black & Reinier Kraakman, Delawares Takeover Law: The Uncertain Search for
Hidden Value, 96 Northwestern University Law Review 521-566 (2002)
Sanjai Bhagat & Bernard Black, The Non-Correlation Between Board Independence and Long-
Term Firm Performance, 27 Journal of Corporation Law 231-274 (2002)
2001 The Legal and Institutional Preconditions for Strong Securities Markets, 48 UCLA Law Review
781-855 (2001) (http://ssrn.com/abstract=182169)132
127
Earlier version published as Outside Directors Liability: Have WorldCom and Enron Changed the Rules?,
Stanford Lawyer 36-39 (Winter 2005).
128
A Europe-UK-centered version of this article was published as Non-Executive Directors? How Worried
Should They Be?, European Lawyer, 2004/Jan. 2005, at 30-31 (with Simon Whitney).
129
Also published in Todd Zywicki ed., The Rule of Law, Freedom, and Prosperity xxx-yyy (200x))
130
Translated into Korean and reprinted in Korean in 4 Korean Journal of Securities Law xxx-yyy (2003)
and in Chinese in Journal of Comparative Studies (2003). A conference version was published in Hwa-Jin Kim
ed., Self-Regulation in the Korean Securities Market 17-30 (2003).
131
Reprinted in 44 Corporate Practice Commentator 519-566 (2002). Chosen as one of top ten corporate
and securities law articles for 2002 (survey conducted by Robert Thompson, at
http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx).
132
Conference version published in OECD, Corporate Governance in Asia: A Comparative Perspective
55-84 (2001). Reprinted in 2002-2003 Corporate Practice Commentator xxx-yyy and in 2002 Securities Law
Review. Chosen as one of top ten corporate and securities law articles for 2001 (survey conducted by Robert
Thompson, at http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx). Published in
9
Bernard Black, Barry Metzger, Timothy OBrien & Young Moo Shin, Corporate Governance in
Korea at the Millennium: Enhancing International Competitiveness (Report to the Korean
Ministry of Justice, May 2000), 26 Journal of Corporation Law 537-609 (2001)
The Corporate Governance Behavior and Market Value of Russian Firms, 2 Emerging Markets
Review 89-108 (2001) (nearly final version at (http://ssrn.com/abstract=263014)133
Does Corporate Governance Matter?: A Crude Test Using Russian Data, 149 University of
Pennsylvania Law Review 2131-2150 (2001) (http://ssrn.com/abstract=252706) (conference
version of The Corporate Governance Behavior and Market Value of Russian Firms)
The Core Fiduciary Duties of Outside Directors, Asia Business Law Review 3-16 (July 2001)
2000 Bernard Black, Reinier Kraakman & Anna Tarassova, Russian Privatization and Corporate
Governance: What Went Wrong?, 52 Stanford Law Review 1731-1808 (2000)
The Core Institutions that Support Strong Securities Markets, 55 Business Lawyer 1565-1607
(2000) (shorter version of The Legal and Institutional Preconditions for Strong Securities
Markets) (http://ssrn.com/abstract=231120)
The First International Merger Wave (and the Fifth and Last U.S. Wave), 54 University of
Miami Law Review 799-818 (2000) (http://ssrn.com/abstract=231101)
Is This the First International Merger Wave?, M&A Lawyer, July/Aug. 2000, at 20-26 (shorter
version of The First International Merger Wave (and the Fifth U.S. Wave)
Strengthening Brazils Securities Markets, 120 Revista de Direito Mercantil, Economico e
Financiero [Journal of Commercial, Economic and Financial Law] 41-55 (2000)
1999 Gainan Avilov, Bernard Black, Dominique Carreau, Oksana Kozyr, Stilpon Nestor & Sarah
Reynolds, General Principles of Company Law for Transition Economies, 24 Journal of
Chinese in Corporate Governance Theory, Criteria and Practice xxx-yyy (2010) and in Spanish in xx Analysis
Securities Market Journal (published by the Colombia Securities commission) xxx-yyy (forthcoming 2011).
133
Reprinted in Stephen LH Phua ed., Singapore Conference on International Business Law: Current
Developments in Financial Regulation and Capital Markets 249-275 (2002), summarized in Torrey Clark,
Russias Corporate Values, 90 Foreign Policy 90-91 (Nov./Dec. 2001), Russian version at
(http://ssrn.com/abstract=367141).
134
Shorter version published in Directors and Boards (2001) [need issue and page number]. Published in
Chinese in 11 Commercial Law Review 215-244 (2006) (Hui Huang, translator) (http://ssrn.com/abstract-xxxxxx).
135
Reprinted in Michael A. Heller & Merritt Fox, eds, Corporate Governance Lessons from Transition
Economy Reforms 113-193 (Princeton Univ. Press 2006); Gerrit de Geest & Roger Van den Bergh eds.,
Comparative Law and Economics vol. x, pp. ___-___ (2003); 2001-2002 Corporate Practice Commentator 215-
294, Ekonomski Anali [Economic Annals], no. 147-48 29-105 (Dec. 2000-March 2001) (Belgrade University).
Excerpted in 10 Transition (World Bank Dec. 1999), summarized in Economic Intuition 8-9 (Summer 2001).
Published in Chinese, Tsinghua Law Journal (forthcoming 2003).
10
Corporation Law 190-293 (1999) (in English and Russian) (http://ssrn.com/abstract=126539);
Russian version at (http://ssrn.com/abstract=127208)136
Bernard Black & Ronald Gilson, Does Venture Capital Require an Active Stock Market?,
Journal of Applied Corporate Finance 36-48 (Winter 1999) (shorter version of Venture Capital
and the Structure of Capital Markets: Banks Versus Stock Markets)
Sanjai Bhagat & Bernard Black, Is There a Relationship Between Board Composition and Firm
Performance?, 54 Business Lawyer 921-963 (1999) (http://ssrn.com/abstract=11417)138
1998 Bernard Black & Ronald Gilson, Venture Capital and the Structure of Capital Markets: Banks
Versus Stock Markets, 47 Journal of Financial Economics 243-277 (1998)
Information Asymmetry, the Internet, and Securities Offerings, in 2 Journal of Small and
Emerging Business Law 91-99 (1998), and Journal of Applied Corporate Finance xxx-yyy
(2000) (http://ssrn.com/abstract=84489)
The Uncertain Relationship Between Board Composition and Firm Performance (conference
version of The Non-Correlation Between Board Composition and Long-Term Firm
Performance?), in Klaus Hopt, Hideki Kanda, Mark Roe, Eddy Wymeersch & Stefan Prigge,
eds., Comparative Corporate Governance: The State of the Art and Emerging Research
281-306 (1998)140
Shareholder Activism and Corporate Governance in the United States, in Peter Newman, ed., 3
The New Palgrave Dictionary of Economics and the Law 459-465 (1998)
Sanjai Bhagat & Bernard Black, Independent Directors, in Peter Newman, ed., 2 The New
Palgrave Dictionary of Economics and the Law 283-287 (1998)
136
Also translated into Serbian (no citation available) and Persian (Mashaallah Niasari, .translator), Persian
Academic Law Review (forthcoming 2008). Contact mashaallah.niasari@gmail.com.
137
Published in Korean in 2 Korean Journal of Securities Law 349-379 (2001).
138
Published in French as Indpendance du conseil et performance corporative, 1(1) Gouvernance 68-95
(2000). Chosen as one of top ten corporate and securities law articles for 1999 (survey conducted by Robert
139
Reprinted in Corporate Governance Today: The Sloan Project on Corporate Governance at Columbia
Law School 1-36 (1999); Lowell Busenitz, Harry Sapienza & Mike Wright eds., Venture Capital ___-___ (2002);
Joseph McCahery & Luc Renneboog eds., Venture Capital Contracting and the Valuation of High Technology
Firms 29-59 (2003), Robert Watson ed., Governance and Ownership 68-102 (2005).; and Philip Auerswald and
Ant Bozkaya, Financing Entrepreneurship xxx-yyy (2008),
140
Also published in Roy Smith, ed., The Power and Influence of Pension and Mutual Funds ___-___
(1998) and in Corporate Governance Today: The Sloan Project on Corporate Governance at Columbia Law
School 291-316 (1999).
141
Also published in Corporate Governance Advisor, Jan./Feb. 1999, at 14-22. Shorter version published as
Does Shareholder Activism Improve Corporate Performance?, The Corporate Board 1-6 (Mar./Apr. 1998).
11
1997 The Board Game, Chief Executive 82-83 (Oct. 1997)
1996 Bernard Black & Reinier Kraakman, A Self-Enforcing Model of Corporate Law, 109 Harvard
Law Review 1911-1981 (1996) (http://ssrn.com/abstract=10037)142
Bernard Black, Reinier Kraakman & Jonathan Hay, Corporate Law from Scratch, in Roman
Frydman, Cheryl W. Gray & Andrzej Rapaczynski eds., Corporate Governance in Central
Europe and Russia, vol. 2: Insiders and the State 245-302 (1996) (conference version of A
Self-Enforcing Model of Corporate Law)
1995 The Russian Civil Code: A Straightjacket for Joint Stock Companies, International
Practitioners Notebook 33-36 (August 1995)
1994 A Proposal for Implementing Retail Competition in the Electricity Industry, Electricity Journal
58-72 (Oct. 1994)
Bernard Black & John Coffee, Hail Britannia?: Institutional Investor Behavior under Limited
Regulation, 92 Michigan Law Review 1997-2087 (1994) (http://ssrn.com/abstract=276991)143
1993 Bernard Black & Richard Pierce, The Choice Between Markets and Central Planning in
Regulating the U.S. Electricity Industry, 93 Columbia Law Review 1339-1441 (1993), reprinted
in 18 Public Utilities Law Anthology (1994)
Next Steps in Corporate Governance Reform: 13(d) Rules and Control Person Liability, in
Kenneth Lehn & Robert Kamphuis eds., Modernizing U.S. Securities Regulation: Economic
and Legal Perspectives 225-238 (1993)144
1992 Next Steps in Proxy Reform, 18 Journal of Corporation Law 1-55 (1992), reprinted in 26
Securities Law Review 397-451 (1994)
Institutional Investors and Corporate Governance: The Case for Institutional Voice, 5 Journal
of Applied Corporate Finance 19-32 (Fall 1992)145
Agents Watching Agents: The Promise of Institutional Investor Voice, 39 UCLA Law Review
142
Published in Spanish in __ Revista Argentina de Teoria Juridica ___-___ (2003). Chosen as one of top
ten corporate and securities law articles for 1996 (survey conducted by Robert Thompson, at
http://law.vanderbilt.edu/faculty/faculty-personal-sites/robert-thompson/index.aspx).
143
Reprinted in 37 Corporate Practice Commentator 245-337 (1995) and in Kevin Keasey ed., Corporate
Governance xxx-yyy (1998); conference version published in John Coffee, Ronald Gilson & Louis Lowenstein
eds., Meaningful Relationships: Institutional Investors, Relational Investing, and the Future of Corporate
Governance ___-___ (1998). Chosen as one of best securities law articles for 1994 (survey conducted by Robert
144
Also published in Journal of Applied Corporate Finance 49-55 (Winter 1993); and 9 Bank & Corporate
Governance Law Reporter 751-757 (1992).
145
Reprinted in Studies in International Corporate Finance and Governance Systems 160-173 (Donald
Chew ed. 1997).
12
811-893 (1992) (http://ssrn.com/abstract=1132062)146
The Value of Institutional Investor Monitoring: The Empirical Evidence, 39 UCLA Law Review
895-939 (1992) (http://ssrn.com/abstract=1132063)
1991 Disclosure, Not Censorship: The Case for Proxy Reform, 17 Journal of Corporation Law 49-
86 (1991)
1990 Shareholder Passivity Reexamined, 89 Michigan Law Review 520-608 (1990)

Is Corporate Law Trivial?: A Political and Economic Analysis, 84 Northwestern University
Law Review 542-597 (1990) (http://ssrn.com/abstract=329240)
1989 Bidder Overpayment in Takeovers, 41 Stanford Law Review 597-660 (1989); reprinted in 22
Securities Law Review 381-444 (1990)
1988 Bernard Black & Joseph Grundfest, Shareholder Gains from Takeovers and Restructurings
Between 1981 and 1986, 1 Journal of Applied Corporate Finance 5-15 (Spring 1988)
1982 Project, Law Firms and Lawyers with Children: An Empirical Analysis of Family/Work Conflict,
34 Stanford Law Review 1263-1308 (1982)
1981 Note, A Model Plain Language Law, 33 Stanford Law Review 255-300 (1981)
1979 Robert Westervelt, James Culbertson & Bernard Black, Discovery of the Immobility of Electron-
Hole Drops in Germanium at Low Excitation, 42 Physical Review Letters 267-272 (1979)
WORK IN PROGRESS
Zenon Zabinski and Bernard Black, The Effect of Tort Reform on Health Care Quality: Evidence
from Texas (working paper 2011), at http://ssrn.com/abstract=xxxxxxx.
Healthcare Associated Infections and Infection Process Control Reporting
David Hyman, Bernard Black, and Charles Silver, The Effects of Pretrial Process Reform:
Evidence from Texas Medical Malpractice Cases (working paper July 2008)
(http://ssrn.com/abstract=1xxxxxx)
Myungho Paik, Bernard Black, David Hyman, and Charles Silver, Who Pays Punitive Damages
(working paper 2009)
Bernard Black, Hwa-Jin Kim & Woochan Kim, Korean Corporate Governance: Progress
Report and Reform Recommendations (working paper May 2005)
(http://ssrn.com/abstract=xxxxxx)
N. Balasubramanian, Bernard Black, Dhammika Dharmapala & Vikramaditya Khanna, Does
146
Excerpted in Thomas Joo, ed., Corporate Governance: Law, Theory, and Policy 282-294 (2004).
13
Corporate Governance Predict FirmsMarket Values: Evidence from India (working paper
forthcoming 2008) (http://ssrn.com/abstract=xxxxxx)
& ,
: , (forthcoming 2009)
(Bernard Black & Anastasiya Farukshina, The Measure of Damages for Corporate Directors:
International Experience)
Vladimir Atanasov, Bernard Black & Conrad Ciccotello, Option Megagrants (working paper
forthcoming 2008) (http://ssrn.com/abstract=xxxxxx)
The Elements of Corporate Governance Risk: Evidence from Russian Firms (with Inessa Love
and Andrei Rachinski)
Outside Director Liability: Market and Regulatory Equilibrium (with Brian Cheffins and
Michael Klausner) (plus book project including this and our two prior papers on outside director
liability)
Corporate Law and Residual Claimants (working paper May 2001) (partial draft at
http://ssrn.com/abstract=1528437) (plus book project including the next two papers)
Employees as Residual Claimants: What Control Rights Should They Have?
Path-Dependent Competition for Corporate Charters: Manager Choice, Shareholder Veto (with
Reinier Kraakman)
An Information Asymmetry Analysis of Lock-Up Options
LANGUAGES
Native English
Good reading and conversational fluency in Russian
LEGISLATIVE AND REGULATORY TESTIMONY AND ADVICE

Non-U.S. Advice
Policy advisor to the Russian Federal Service on the Capital Market on (i) a draft law on
insider trading and market manipulation, and (ii) amendments to the Civil Code, Law on
Joint Stock Companies, and Law on Limited Liability Companies with respect to
fiduciary duties of directors, managers, and controlling shareholders, 2006
Policy advisor to the Ministry of Justice of Indonesia on company law reform, 2000
Policy advisor to the Ministry of Justice of South Korea on corporate governance, 1999-
2000
Policy advisor to the Government of Mongolia 1996-2001 on company law and securities
law; principal drafter for Law on Companies (1999)
Policy advisor (1997-1999) to the Government of Vietnam for Law on Enterprises (1999)
Policy advisor for draft Armenian law on joint stock companies, 1999
14
Policy advisor (1998-2000) on company law and mutual fund law to the Ukrainian
Securities Commission
Policy advisor (1993-1997) on company law, securities law, investment fund law, and
privatization of state-owned enterprises to the Russian Privatization Ministry
() and the Russian Federal Securities Commission (
); advisor on Law of the Russian Federation on Limited
Liability Societies (1998); advisor and co-drafter for Law of the Russian Federation on
Joint Stock Companies (1996); advisor and co-drafter of Decree of the President of the
Russian Federation on Unit Investment Funds (issued 1995), portions incorporated into
Law of the Russian Federation on Investment Funds (2002)
U.S. and State Advice
Testimony before Texas State Senate, State Affairs Committee, on medical
malpractice reform (2008)
Written testimony to the Securities and Exchange Commission on proposed
amendments to the proxy rules (1997)
Oral and written testimony on Electricity Markets - 2005, before the New York
Public Service Commission (1995)
Oral and written testimony on Whats at Stake in Retail Wheeling, before the
California Public Utilities Commission (1994)
Written testimony on Proxy Reform to Securities and Exchange Commission (1991-
1992)
Participant, Securities and Exchange Commission Roundtable on Corporate
Governance and American Economic Competitiveness (1992)
Written testimony on Unbundled Stock Units to Securities and Exchange Commission
(1989)
OTHER PROFESSIONAL ACTIVITIES

Managing director (1998- ), Social Science Research Network and its Legal
Scholarship Network (family of electronic journals that publish abstracts of working
papers in different areas of law, and related online database)
Editor (1995- ), Corporate and Takeover Law Abstracts, Corporate Governance
Law Abstracts, Law and Finance Abstracts, and Securities Law Abstracts (electronic
journals of abstracts published by Legal Scholarship Network)
Research Fellow, European Corporate Governance Institute (2005- )
Founding Board Member and Senior Research Associate, Global Corporate
Governance Academic Network (2004- )
Member, Board of Directors of Kookmin Bank (largest Korean commercial bank),
and its Risk Management and Management Strategy Committees (2003-2005)
15
Co-director, Directors Consortium (director training program run by Stanford Law
School and Chicago and Wharton Business Schools) (2002-2004)
Editorial board member: M&A Lawyer; Corporate Ownership and Control.
Advisory board member: Journal of Korean Law; University of Bologna Center for Law
and Economics; Fischer Center for Corporate Governance and Capital Markets
Regulation at Tel Aviv University
Member, Board of Directors of the American Law and Economics Association (2012-
2015).
Member: Society of Healthcare Epidemiologists of America (2011- )
Member: Quality and Value Interest Group of AcademyHealth (2011- )
Member (1995-1998) of the Committee on the Independent States of the Former Soviet
Union of the Association of the Bar of the City of New York
Member, Board of Directors (1989-1996) and Chair of the Audit Committee of
Homeland Holding Corporation and its principal subsidiary, Homeland Stores (midsized
publicly traded corporation)
Chair (1994-1995) and chair-elect (1993-1994) of the Business Associations section of
the Association of American Law Schools
Member (1989-1992) of the Corporation Law Committee of the Association of the Bar of
the City of New York
Bar memberships: New York; Washington, D.C;. U.S. Supreme Court
Professional associations (not listed above): American Finance Association; American
Law & Economics Association; American Bar Association; American Society of Law,
Medicine & Ethics; New York State and District of Columbia Bars
Served as referee for: Economic Inquiry; Financial Management, International Review
of Law & Economics; Journal of Banking and Finance, Journal of Corporate Finance,
Journal of Finance, Journal of Financial Economics; Journal of Law, Economics &
Organization; Journal of Legal Studies; Journal of Risk and Insurance, Research in Law
& Economics; National Science Foundation; Sloan Foundation.
CONFERENCES ORGANIZED
Founding chairman, Society for Empirical Legal Studies (2006-2011)
Organizer or co-organizer:
Workshop on Research Design for Causal Inference (Northwestern Law School
2010- ) and Research Design for Causal Inference: Bayesian Methods
(Northwestern Law School (2011- )
Conference on Empirical Legal Studies
First annual conference: Univ. of Texas Law School, 2006
16
Sixth annual conference: Northwestern Law School, 2011
Stanford Law School, Conference on Cross-Listing of Emerging Market
Companies on Foreign Exchanges (2002)
Columbia Law School, Conference on Alternative Perspectives on Corporate
Governance (1998)
EDUCATION
Stanford Law School -- J.D. 1982: Senior projects editor, Stanford Law Review;
Sontheimer 3d-Year Honor (2d-highest 3-year GPA); Second-Year Honor
(highest 2-year GPA); Johnson & Swanson Law Review Award
University of California at Berkeley: M.A. (A.B.D. in physics) 1977
Princeton University: A.B. 1975 magna cum laude in physics
17
PRESENTATIONS AT WORKSHOPS AND SEMINARS
(no of times or recent dates shown)
American Bar Association Annual Meeting Nanyang Business School, Singapore

American Bar Foundation (2010) National Bureau of Economic Research (2)
American Law & Econ Assn (13) (thru 2011) New Economic School, Moscow, Russia (2)
ALEA (by coauthor) (7) (thru 2011) New York Stock Exchange
Amer. Soc. Law, Med. & Ethics, Annual Health New York Univ., Stern School of Business (2)
Law Professors Conf (3, 2010, 2011) Northeastern Univ., Gorbachev Foundation
Asian Institute of Corporate Governance (2) Northwestern Law School 4 (thru 2011)
Association of American Law Schools (5, 2011) Northwestern Univ Inst. Policy Research (2011)
Assn for Comparative Economic Studies Princeton Univ., Wilson School of Public Affairs
Atlanta Finance Forum Sao Paolo Stock Exchange, Brazil
Austin Bar Association Seoul Natl Univ, Korea, School of Business
Australian National University Singapore Conference on Intl Business Law
BSI Gamma Foundation Society of Healthcare Epidemiologists of America
Brazil Securities Commission (CVM) (2011)
Canadian Law & Econ Association (7, 2011) Stanford Business School
CLEA (by coauthor) (5) (thru 2011) Stanford Center Russian & East European Studies
Chicago-Kent Law School Stanford Law School (8)
Columbia Business School Texas A&M College of Business
Columbia Law School (3) UCLA/USC Corporate Gov Roundtable (3)
Columbia Univ. Department of Economics U.S. Department of Justice, Antitrust Division
Conf. on Empirical Legal Studies (1) (2010) U.S. Securities & Exchange Commission
CELS by coauthor) (8) (thru 2010) Univ. of Cal.-Berkeley, Boalt Hall of Law (2)
Cornell Law School Univ. of Cal.-Berkeley, Haas School of Bus. (2)
Dartmouth Univ., Tuck School of Business Univ. of Chicago Law School
Duke Law School (2009) Univ. of Colorado - Boulder, College of Business
European Finance Association (2) Univ of Georgia, Terry College of Business (2010)
EFA (by coauthor) (1) Univ of Illinois Law School (2010)
Euro. Fin. Mgmt Assn Annual Meeting (2) Univ. of Melbourne Law School, Australia
Fin. Mgmt Assn Annual Meeting Univ. of Miami Law School
Fried, Frank, Harris, Shriver & Jacobsen Univ. of Michigan Law School
George Mason Law School (2) Univ. of Michigan, Ross School of Business
Georgetown Law Center (2) Univ. of Missouri - Columbia Law School
George Washington Law School Univ. of Pennsylvania Law School
Georgia State Law School Univ. of Rochester, Simon School of Business
Griffith University Law School, Australia Univ. of Sao Paolo, Brazil, Law Faculty
Harvard Business School Univ. of Southern California Law Center (2)
Harvard Law School (3) Univ. of Southern Calif., Marshall School of Bus.
Hong Kong Baptist Univ (2009) Univ. of Texas, McCombs School of Business (4)
Hong Kong Inst. Chartered Pub. Accts (2009) Univ. of Texas Law School (6)
Hong Kong Securities & Futures Commn (2009) Vanderbilt Law School
Institutional Investor Forum Woo Yun Kang Jeong & Han
International Monetary Fund (2) World Bank (4)
Intl Society for New Institutional Economics
Kellogg School of Management (2009)
Kookmin Bank, Korea
Korea Corporate Governance Service
Korean Securities Law Institute
Korean Stock Exchange
Law and Society Association
Malaysian Securities Commission (2)
Michigan Law School
Moodys
18
CONFERENCES, SPEECHES, OP-EDs and COMMENTS
2011 Presentation of Does Hospital Infection Reporting Affect Actual Infection Rates, Reported Rates, or Both?,
Univ. of British Columbia Symposium on Mandatory Reporting of Healthcare Associated Infections: Can
U.S. Experience Inform Canadian Policy (May 2011); Quality Interest Group meeting at 2011 Academy
Health Annual Conference (June 2011)
Presentation of Causal Inference Strategies in Corporate Governance Research, Keynote speaker, Third
International Conference on Corporate Governance in Emerging Markets (Seoul, Korea, 2011); Keynote
Public Lecture, Canadian Law and Economics Association 2008 Annual Meeting (Toronto, Canada, Sept.
2008); Keynote presentation, 7th Brazil Finance Society Annual Meeting (Sao Paolo, Brazil, July 2007)
Presentation on Due Diligence: Failures and Remedies, Symposium on Corporate Governance and Ethics
in a Post-Crisis World (Notre Dame Law School April 2011); Osler Hoskins lecture at Queens University
Faculty of Law (March 2010); Western Ontario Faculty of Law (Nov. 2010); Abraham Pomerantz Lecture
(Brooklyn Law School, March, 2009); keynote speech at European Financial Management Conference on
Corporate Governance and Control (Judge Business School, Cambridge Univ., April 2009)
2010 Discussant for Martijn Cremers and Allen Ferrell, Thirty Years of Shareholder Rights and Firm Valuation,
Yale-ECGI-Oxford Conference on Corporate Governance and Performance: Causation? (Nov. 2010)
Presentation of Is Delaware Losing Cases, Vanderbilt Law School Conference on Corporate Law (Oct.
2010)
Lecture on Bloopers: How (Mostly) Smart People Get Causal Inference Wrong, Workshop on Research
Design for Causal Inference (Aug. 2010) (http://ssrn.com/abstract=1663404)
Presentation of The Value of Board Independence in an Emerging Market: A Multiple Identification
Strategies Approach Using Korean Data, 2010 University of Albert Frontiers in Finance Conference; 19th
Annual Conference on Financial Economics and Accounting (Nov. 2008).
2009 Lecture on Interpreting DiD and IV Estimates: ATE, LATE, ATET, and all That, Conference on Empirical
Legal Studies (Nov. 2009) (http://ssrn.com/abstract=1528462)
Organizer of Focus Session on What Do We Really Know About How Corporate Governance Affects Firm
Performance, and Presentation of Incentives Not to Know in the Market for Mortgage-Backed Securities,
The Effect of Board Structure on Firm Value: A Multiple Identification Strategy Approach Using Korean
Data, and How Corporate Governance Affects Firm Value: Evidence on Channels from Korea, Centre for
Economic Policy Research, European Summer Symposium in Financial Markets (Gersenzee, Switzerland,
July 2009)
Presentation of Corporate Governance in Brazil; comment on Qing Yang, Yuning Xue, and Besim
Yurtoglu, Does the Strategic Role and the Control Role of the Board of Directors Exist in Chinese Listed
Companies, Second International Research Conference on Corporate Governance in Emerging Markets
(Sao Paulo, Brazil, July 2009).
Presentation of How Corporate Governance Affects Firm Value: Evidence on Channels from Korea, 8th
Darden-World Bank International Finance Conference (Darden School of Business, Univ. of Virginia,
March 2009)
2008 Keynote speaker, Brazilian Corporate Governance Institute, 9th Annual Conference: Ownership In
Evolution: New Forms of Corporate Control (Sao Paolo, Brazil, Dec. 2008)
Commentator on Cecile Carpentier, Douglas Cumming and Jean-Marc Suret, The Value of Capital Market
Regulation and Certification: IPOs versus Reverse Mergers, Conference on Empirical Legal Studies
(Cornell Law School, 2008)
Presentation on The (Possible) Link Between Health Care Information and Quality Innovation, Kaufman
Foundation Summer Legal Institute (San Diego, July 2008)
Presentation on Debt Decoupling, INSOL conference (Chicago, July 2008)
19
Presentation of Private Enforcement of Corporate Law: A Comparative Empirical Analysis of the UK and
the US, ECGI Corporate Governance Conference (Oxford, June 2008)
Presentation of Debt, Equity and Hybrid Decoupling, Conference on Credit Risk Analysis, Mitigation and
Transference (Chicago, Feb. 2008)
2007 Presentation of Unbundling and Measuring Tunneling, Columbia Law School Conference on Berle-Means
Revisited (Dec. 2007)
Presentation of How Does Law Affect Finance?; comment on Vidhi Chhaochharia & Luc Laeven,
Corporate Governance Norms and Practices, International Research Conference on Corporate Governance
in Emerging Markets (Istanbul Turkey, Nov. 2007).
Keynote speaker on Optimal Board Structure, Amsterdam Center for Corporate Finance (Amsterdam, Nov.
2007)
Lecture on Instrumental Variables: A Simpleminded Introduction, Conference on Empirical Legal Studies
(Nov. 2007) (http://ssrn.com/abstract=1528459)
Presentation of Private Enforcement of Corporate and Securities Law: A Comparative Empirical Analysis
of the UK and the US, Yale School of Management and Oxford Business School Conference on
Shareholders and Corporate Governance (Oxford, Oct. 2007)
Presentation of Empty Voting and Other Decoupling Strategies II, 6th European Company Law and
Corporate Governance Conference: Challenges for the Control of Corporate Europe (Lisbon, Spain, Oct.
2007)
Organizer and presenter (Empty Voting and Other Decoupling Strategies), special session on Shareholder
Activism and Corporate Governance, European Financial Management Association 2007 Annual Meeting
(Vienna, Austria, June 2007)
Participant, Millstein Center
for Corporate Governance and Performance at Yale School of
Management and Aspen Institute Business and Society Program Roundtable on
Corporate Governance: Creating Value for the Long-Term (New Haven, May 2007)
Comment on Tom Chang and Antoinette Schoar, The Effect of Judicial Bias in Chapter 11 Reorganizations
(Conference on Financial Contracting: Theory and Evidence, Mannheim, Germany, April 2007)
Keynote speaker on Empty Voting, European Corporate Governance Institute 2007 Annual Meeting (Apr.
2007) (Frankfurt, Germany)
Presentation of Can Corporate Governance Reforms Increase Firms Market Values? Event Study
Evidence from India, Univ. of Virginia Law School Conference on Law and Finance (Mar. 2007)
Webcast on Empty Voting - How Borrowed Shares Can Swing Votes, National Investor Relations Institute
(Mar. 2007)
Comment on Helen Bowers and William Latham, Information Asymmetry, Litigation Risk, Uncertainty and
the Demand for Fairness Opinions: Evidence from U.S. Mergers and Acquisitions, 1980-2002 (Frontiers of
Finance conference, Curacao, Jan. 2007)
2006: Presentation of The Value of Board Independence in an Emerging Market: A Multiple Identification
Strategies Approach Using Korean Data, Conference on Mel Eisenbergs The Structure of the Corporation:
Thirty Years Later (Columbia Law School, Nov. 2006)
Presentation of An Overview of Indian Corporate Governance Practices, International Corporate
Governance Forum-Asian Centre for Corporate Governance International Conference on Corporate
Governance: Role of Corporate Governance in Improving Indias Investment Climate (Mumbai, India,
Nov. 2006)
Presentation of Hedge Funds, Insiders, and Empty Voting: Decoupling of Economic and Voting Ownership
in Public Companies, Boundaries of SEC Regulation Conference at Financial Economics Institute,
20
Claremont-McKenna College (Feb. 2006); Weil, Gotshal & Manges Roundtable at Yale Law School (Apr.
2006)
2005: Invited panelist on The Future of Corporate Governance Research, Financial Management Association
annual meeting (Oct. 2005)
Lecture on Takeover defenses: US/UK Experience and Implications for Korea, Korea Corporate
Governance Service conference on The Market for Corporate Control and Corporate Governance (Sept.
2005)
Presentation on Executive Compensation: How to Stop the Pay Spiral, IC2 Institute Conference in 21st
Century Governance for Early Stage Companies (Austin, TX, June 2005)
Presentation of Korean Corporate Governance: A 2005 Progress Report, Korea University conference on
Korea Toward the Next Hundred Years: Reality and Vision (Seoul, Korea, May 24, 2005)
Presentation of Does Corporate Governance Predict Firms Market Values: Time-Series Evidence from
Korea, 4th Asian Corporate Governance Conference (Seoul, Korea, May 19, 2005)
Presentation of Ranking Law Schools: Using SSRN to Measure Scholarly Performances, in Symposium,
The Next Generation of Law School Rankings (Apr. 15, 2005)
Commentator on John Coffee, Gatekeepers: The Role (and Reform) of the Professions in Corporate
Governance, Columbia Law School, First Annual Deals Roundtable: Gatekeepers and Corporate
Governance (Apr. 1, 2005)
Presentation of Stability, Not Crisis: Medical Malpractice Claim Outcomes In Texas, 1988-2002, AEI
Health Policy Forum, Is There a Crisis in Medical Malpractice? New Evidence from Texas (March 31,
2005)
Bernard Black, Charles Silver, David Hyman & William Sage, False Diagnosis, The New York Times,
March 10, 2005 (editorial based on Stability, Not Crisis: Medical Malpractice Claim Outcomes In Texas,
1988-2002) (http://ssrn.com/abstract=xxxxxx), expanded version published as Hunting Down the Facts on
Medical Malpractice, Austin American-Statesman, March 14, 2005
Bernard Black, Brian Cheffins & Michael Klausner, Why Directors Damages May Harm Investors,
Financial Times, Jan. 20, 2005, at 19, and Financial Post (Canada), Jan. 21, 2005, at xx
(http://ssrn.com/abstract=xxxxxx) (editorial based on our work on outside director liability)
Commentator on Eric Talley & Gudrun Johnsen, Corporate Governance, Executive Compensation, and
Securities Litigation, First Annual NYU/Penn Conference on Law and Finance (Feb. 2005)
Interview, Corporate Governance Ups Co Value, Economic Times (business section of India Times), Jan.
27, 2005, at (http://economictimes.indiatimes.com/articleshow/1001951.cms)
Presentation of Does Corporate Governance Affect Firms Market Values? Evidence from Korea,
Roundtable on Financing of Early Stage ad Emerging Growth Companies, Foreign Investment Capital and
the Indian Venture Capital Markets (Bangalore, India, Jan. 2005)
Presentation of Predicting Firms Corporate Governance Choices: Evidence from Korea, Seminar on
Venture Capital and Corporate Governance - India and the USA (Hyderabad, India, Jan. 2005)
2004: Commentator on Jerry Davis and E. Han Kim, Would Mutual Funds Bite the Hand that Feeds Them?
Business Ties and Proxy Voting, Journal of Financial Economics and Federal Reserve Bank of New York
conference on Agency Problems and Conflicts of Interest in Financial Intermediaries (Dec. 2004)
Interview about Outside Director Liability, published as Worried About Shareholder Suits?
Fuhgedaboudit!, Corporate Board Member, March/April 2004, at 20-25
Panelist, Columbia Law School Interdisciplinary Workshop on Law, Finance, and Political Economy (April
2004)
Presentation of Liability Risk for Outside Directors: A Cross-Border Analysis, Across the Board: An
21
Interdisciplinary Conference on Corporate Governance, Univ. of Texas, McCombs School of Business
(April 2004)
Comment on Marcus Cole, The Preference for Preferences, Willamette Law School Conference on
Venture Capital After the Bust (March 2004)
2003: Presentation of Predicting Firms Corporate Governance Choices: Evidence from Korea, KDI Conference
on Corporate Governance and Capital Market in Korea (Dec. 2003); comments on Sung Wook Joh &
Kayoun Yi, Does Market React to Public Disclosure on Related Party Transactions in Korea, and Choong-
Kee Lee, The Directors Duties Regarding Compliance and Governance and the Operation of the
Corporate Personality in the Context of a Financial Group. Comments published in Young-Jae Lim ed.,
Corporate Governance and Capital Market in Korea (forthcoming 2005)
Commentator on Lawrence Hamermesh, Premiums in Stock-for-Stock Mergers, University of Pennsylvania
Law School, Symposium on Control Transactions (Feb. 2003)
Presentation of Institutional Reform in Transition, Asian Development Bank Institute, 4th Asian Policy
Forum on Corporate Governance in China (Oct. 2002); Stanford Institute for International Studies
Conference on Corruption: its Consequences and Cures (Jan 2003)
2002: Commentator on Darius Miller, ADRs, Analysts, and Accuracy, Stanford Law School, Conference on
Cross-Listing of Emerging Market Companies on Foreign Exchanges (Nov. 2002)
Presentation of Outside Director Liability, Columbia Law School Conference on Global Markets, Domestic
Institutions: Corporate Law and Governance in a New Era of Cross-Border Deals (Oct. 2001; Apr. 2002)
Participant, National Bureau of Economic Research Conference on Corporate Alliances, Cambridge MA
(Nov. 2001) & Islamorada FL (Mar. 2002)
2001: Keynote speaker on The Role of Self-Regulation in Supporting Koreas Securities Markets, Korea Stock
Exchange International Conference on Self-Regulatory Institutions in the Korean Securities Markets (Dec.
2001)
Commentator, Stanford/Yale Junior Faculty Forum (June 2001)
Presentation on The Core Fiduciary Duties of Directors, Third Asian Roundtable on Corporate Governance
(OECD & World Bank, Singapore, April 2001)
Presentations of The Corporate Governance Behavior and Market Value of Russian Firms, OECD
Roundtable on Russian Corporate Governance, the Responsibility of Boards, and the Role of Stakeholders
in Corporate Governance (June 2001); Conference on The Reform of Economic Law in East Asia, Stanford
Law School (Mar. 2001)
Participant, Dykstra Corporate Governance Symposium, Univ. of California Davis Law School (Feb. 2001)
2000: Presentation of Does Corporate Governance Matter? A Crude Test Using Russian Data, University of
Pennsylvania Law School, Symposium on Norms and Corporate Law (Dec. 2000)
Participant, University of Pennsylvania Law School Roundtable on Corporate Law (May 2000)
1999: Presentation of Russian Privatization and Corporate Governance: What Went Wrong?, OECD Conference
on Corporate Governance in Russia (Moscow, Russia, May 1999); Davidson Institute at Univ. of Michigan
Conference on Corporate Governance Lessons from Transition Economy Reforms (Sept. 1999)
Participant, Conference on The Anatomy of Corporate Law: A Comparative and Functional Approach
(Paris, France, July 1999)
Workshop leader, International Monetary Fund Workshop on Comparative Corporate Governance in
Developing and Transition Economies (June 1999)
Presentation of The Legal and Institutional Prerequisites for Strong Securities Markets, OECD Conference
on Corporate Governance in Asia: A Comparative Perspective (Seoul Korea, Mar. 1999)
Participant, Workshop on Innovation in Business Law Education, American Bar Association Section of
22
Business Law annual meeting (Apr. 1999)
Presentation of The Non-Correlation Between Board Independence and Long-Term Firm Performance,
Directors College, Stanford Law School (Mar. 1999); Federalist Society Conference on Corporate
Governance (NY, Sept. 1998) (remarks published in Bank and Corporate Governance Reporter (1999))
Participant, Conference on Armenian Company Law, Washington DC (Jan. 1999) (conference with drafters
of the Armenian company law to discuss concepts of company law)
1998: Shareholder Robbery, Russian Style, in Institutional Shareholder Services, ISSue Alert, Oct. 1998, at 3, 14
(editorial in newsletter for institutional investors) (http://ssrn.com/abstract=510123)
A Test Case for Shareholder Rights, Moscow Times, Jan. 30, 1998 (editorial)
Participant, Conference on Ukrainian Company Law, Kiev, Ukraine, (Oct. 1998) (seminar for legislators
and government officials on draft company law)
Participant, Corporate Law Bridge Group conference (June 1998)
Presentation of Path-Dependent Competition for Corporate Charters: Manager Choice, Shareholder Veto,
Comparative Law Workshop on the Regulatory State and Corporate Governance, Goethe Universitat,
Frankfurt, Germany, (May 1998)
Speaker on comparative and international aspects of corporate law scholarship, Association of American
Law Schools, Workshop on Business Associations (May 1998)
Speaker, U.S. Securities and Exchange Commission, International Institute for Securities Market
Development (Apr. 1998)
Presented paper, Russian Firms: Preventing Manager/Investor Disputes from Arising, Conference on The
Changing Landscape of Investment in Russia, Moscow, Russia, (Apr. 1998)
Invited speaker, Seminar on the Draft Company Law, Hanoi, Vietnam (Mar. 1998) (week-long seminar for
legislators and government officials on the draft company law, for which I was an advisor)
Presentation of The Building Blocks of Corporate Governance, Columbia Law School Conference on
Alternative Perspectives on Corporate Governance (Jan. 1998)
Speaker, Seminar on the Law on Joint Stock Companies, Ulaanbaatar, Mongolia (Jan. 1998 (seminar for
legislators and government officials on the Law on Joint Stock Companies, for which I was the principal
drafter)
1997: The Struggle for Control of Russias Securities Markets, Moscow Times, July 9, 1997 (editorial)
Participant in Symposium, Check-the-Box and Beyond: The Future of Limited Liability Entities (Larry
Ribstein & Mark Sargent eds.), 52 Business Lawyer 605-652 (1997)
Presentations of Board Composition and Firm Performance: The Uneasy Case for Majority Independent
Boards, Max-Planck Institute Conference on Comparative Corporate Governance (Hamburg, Germany,
May 15-17, 1997); NYU Salomon Center Conference on The Power and Influence of Pension and Mutual
Funds (Feb. 21, 1997)
Lecturer, Open Society Institute workshop for Russian law teachers, on the Russian Law on Joint Stock
Companies (Moscow, Russia, Nov. 11-15, 1997)
Presentation of Information Asymmetry, the Internet, and Securities Offerings, Lewis & Clark Law Forum,
Financing Innovation: The Future of Capital Formation for Small and Emerging Businesses (Sept. 26,
1997)
Address on The Struggle for Control of Russias Securities Markets, Harriman Institute Conference on
Russian Securities on the American and Russian Capital Markets (New York, June 10, 1997)
Speaker for Plenary Session on Stranded Costs, National Conference of State Legislatures Conference, The
Electric Industry in the Balance (New York, May 29-30, 1997)
23
Participant, USAID-sponsored conference with Vietnamese officials on draft Law of Vietnam on
Partnerships and Companies (New York, Aug. 26-30, 1997)
Lecturer, World Bank/Central European University workshop on Corporate Governance in Eastern Europe
and Russia (Budapest, Hungary, May 12-16, 1997)
Speaker, World Bank Conference on Legal Reform and Economic Development (Apr. 14, 1997)
1996: Corporate Law for Emerging Markets: The Case of Russia, in American Society of International Law,
Proceedings of 90th Annual Meeting: Are International Institutions Doing Their Job? 226-231
(1996)
Presentation of Corporate Law and Residual Claimants, Columbia Law School Conference on Employees
and Corporate Governance (Nov. 22 & May 15, 1996)
Address on The Path-Dependent Evolution of Corporate Law, George Mason Law School Conference on
Strong Managers, Weak Owners (May 4, 1996)
1995: Bernard Black, Legal Reform in Russia, Columbia Law School Report 68 (Fall 1995) (short article for
alumni magazine)
Presentations of Corporate Law from Scratch, World Bank Conference on Corporate Governance in
Central Europe and Russia (Apr. 22, 1994; Sept 30, 1994; Dec. 16, 1994)
Address on Investment Fund Law for Emerging Economies, OECD Conference on Investment Funds in
Ukraine (Paris, France, June 1-2, 1995)
1994: Comment: The Industrial Organization of Market-Making, on Peter Reiss & Ingrid Werner, Transacting
Costs in Multiple Dealer Markets: Evidence from the London Stock Exchange, in Andrew Lo, ed., The
Industrial Organization and Regulation of the Securities Industry 171-174 (1995)
Address on The Essentials of Corporate Governance in Privatizing Economies, World Bank Conference on
Creating Capital Markets in Central and Eastern Europe (Prague, Czech Republic, Nov. 17, 1994)
1993: Presentations of Hail Britannia?: Institutional Investor Behavior Under Limited Regulation: Whittemore
Conference on The International Capital Acquisition Process (May 21, 1993); Columbia Law School
Conference on Relational Investing (May 6, 1993)
1992: Beyond Proxy Reform, Insights: Corporate & Securities Law Advisor 2 (March 1993) (editorial)
Participant, Roundtable on Management Incentive Compensation and Shareholder Value, Continental
Bank Journal of Applied Corporate Finance 110-130 (Summer 1992)
Comment, Event Studies in a World with Signaling and Partial Anticipation, on Kleidon & Scott, The
Replacement of Corporate Chief Executive Officers and the Performance of the Board, American Law &
Economics Association (May 16, 1992)
1991: Contributor to Catch 22: The Retired CEO as Company Director (Institutional Shareholder Services
Special Report, July 15, 1991
Contributor to Roundtable discussion on Institutional Investors and Corporate Governance, published in
Directors and Boards 9 (Spring 1991)
Presentation of Agents Watching Agents: Columbia Law School Conference on The Future of Corporate
Governance (May 11, 1991)
Address on Environmental Sanctions: When Does Deterrence Become Overkill?; Columbia Journal of
Environmental Law Symposium on Crimes Against the Environment (Mar. 8, 1991)
Address on Taking Long-Term Investing Seriously; Institutional Shareholder Services Conference for the
Proxy Professional (Feb. 22, 1991)
1990: Conference presentation on Hazardous Waste Cleanup Incentives in Corporate Acquisitions; Columbia
Business Law Review Symposium on Environmental Concerns in Business Transactions (Feb. 9, 1990)
24
1989: Address on The Long Term Profitability of Leveraged Buyouts; Lowe Institute Conference on the
Leveraging of Corporate America, Los Angeles (Apr. 11, 1989)
1988: Presentation of Is Corporate Law Trivial?, Columbia Law School Conference on Contractual Freedom and
Corporate Law (Dec. 9, 1988)
Address on Shareholder Gains from Takeovers, Rutgers Conference on Corporate Takeovers,
Restructuring, and the Market for Corporate Control (May 24, 1988)
Address on Regulatory Reform after the Market Crash: The Case for Flow Restrictors; USC-UCLA
Conference on The Crash: Causes and Cures? (Feb. 13, 1988)
PERSONAL DATA
Born 1953 in Brooklyn, New York
Wife: Katherine Litvak
Children: David (1979) Benjamin (1980) Samuel (1985)
Sarah (1990) Rebekah (1994) Daniel (2005)
Jacob (2008)
25
Appendix B: Documents Reviewed
In preparing this Affidavit, I reviewed the following documents and other information, in
addition to the sources cited in this Affidavit.
The Complaint and Motions to Dismiss in this case.

Various books, surveys, academic articles, speeches, and news stories relating to:
o Russian corruption in general, corruption of the Russian judiciary, and Russian
hostile takeovers.
o The specific conduct of TNK and its principals
Selected discovery documents (from BP) provided to me by plaintiffs counsel
My own prior writing on Russia, included in my CV, and sources cited therein
I was also aware, from my work in the earlier federal case, Norex Petroleum Limited v. Access
Industries (S.D.N.Y.), of the following documents, and re-reviewed them to the extent relevant
to my current opinions:
Complaint and Motion to Dismiss. I assume the facts alleged in this Complaint to be true.
Expert Declarations in the federal case, including declarations by Judge Sergey Pashin, Judge
Sergey Zaitsev, and Ms. Marina Telyukina on behalf of Plaintiff.
Declaration of Ethan Burger on behalf of plaintiffs in Base Metal Trading v. Russian
Aluminum, 2003 WL 1618088 (S.D.N.Y.), and exhibits to this declaration.
1
The Billionaire' s Playlist - The New Yorker http://www.newyorker.com/magazine/2014/01/20/the-billionaires-pla...
Blavatnik, at !fty-six years old, has a high forehead, full cheeks,

wide-set gray eyes, and an owlish expression that moves easily from
warmth to suspicion. His fortune has been estimated at nearly
eighteen billion dollars. He owns a mansion on Kensington Palace
Gardens, which he bought, in 2004, for forty-one million pounds.
Since renovated, it has thirteen bedrooms, a cinema, an indoor-
outdoor swimming pool, and armored-glass windowsa display of
grandeur that makes the nearby Russian Embassy look like a humble
dacha. The British publisher Lord George Weidenfeld, a close
friend, told me that Blavatnik has been systematically collecting very
good art recentlycontemporary art, and also a Modigliani, one of
the best Ive seen. Not long ago, Blavatnik showed a guest one of his
acquisitions, an Enigma encryption device that the British captured
from a German submarine in 1941. As the guest admired the
machine, Blavatnik warned, Dont touch it! It cost a lot of money!
Another friend described one of Blavatniks lavish parties: Rupert
Murdoch was going out as I came in. There were Argentinean tango
dancers, and great music performers, and young, scantily clad
Russian girls playing tennis. The friend told Blavatnik, This is
nineteen-twenties Gatsby! Later, the friend recalls saying, Len,
you really should save some money. And he said, But I have so
much! He thinks he is living modestly.
Blavatniks most audacious acquisition is a company: Warner Music,

which he bought, in 2011, for $3.3 billion. Associates say he liked
the idea of owning a !rm that was both quintessentially American
and known worldwide. One of them told me, Len doesnt love
musiche loves what it can do for him socially. When Blavatnik
took over Warner Music, executives suggested that he visit the
companys oces around the world, to reassure employees that he
would be a good owner. But the employees were dismayed by
Blavatniks taste in music, which runs to Leonard Cohen and
Theodore Bikel, who portrayed Tevye in Fiddler on the Roof.
2 of 33 12/14/16, 10:23 AM
They also were disturbed by his life style. After Blavatnik took a trip
to Asia, one employee said, It was more like a rock group touring
than an executive trip. People were saying, Who is this guy that
owns our company? Is it just going to be his toy?
Warner throws substantially more parties than it did before Blavatnik

took over, and a social concierge has been hired. According to
former employees, Blavatnik has said that he wants lots of beautiful
women at his events, and not too many men; he is often
photographed, in one of his signature cream-colored suits, with his
arm around the likes of the model Naomi Campbell or the Warner
singer Joss Stone. But the music industry is worth roughly half what
it was a decade ago, and it is moving uncertainly toward a digital
future. At an early party, Blavatnik met Roger Ames, who in the
nineteen-eighties and nineties ran London Records as it entered its
coke-laced, orgiastic heyday (portrayed in John Nivens novel Kill
Your Friends, which Blavatnik apparently considered !nancing as a
movie project). I bought a record company at the wrong time,
Blavatnik told Ames. You guys had all the fun!
Blavatnik enjoys acclaim for his philanthropy, and an increasingly

high social pro!le. Last April, he had dinner with Bill and Hillary
Clinton at a Lincoln Center gala honoring Barbra Streisand. But he
remains deeply private, wary of the press and sensitive to any inquiry
about his past; he declined to comment for this article, even to
con!rm basic facts. (Blavatniks spokesman said that his silence
should not be construed or interpreted as acknowledgment of the
accuracy of any or all of what was provided. It is quite to the
contrary.) Some associates are afraid to speak with reporters. Even
longtime friends say that they arent sure exactly what he did in the
nineties, or how he got the money to make his early investments in
Russia, which became the foundation for his fortune. One
acquaintance referred to an expression that is popular among Russian
3 of 33 12/14/16, 10:23 AM
businessmen: Never ask about the !rst million.
eonid Valentinovich Blavatnik was born in 1957 in Odessaa

L place that Isaac Babel described, sentimentally, as the most
charming city of the Russian Empire and, less sentimentally, as a
horrible town. (After Blavatnik got rich, he bought a hundred-
and-sixty-four-foot yacht and named it Odessa.) His parents were
academics, and when he was young they moved to Yaroslavl, a
mid-sized city three hours from Moscow. Blavatnik talked about
what it was like to be this little Jewish kid, walking around with a
violin case in this provincial Russian citywhich I gather wasnt a
completely pleasant experience, Blair Ruble, a former director of the
Kennan Institute, in Washington, D.C., recalled. Jews were generally
kept out of the best schools; when Blavatnik reached college age, he
studied at the Moscow Institute of Transport Engineers, in the
Department of Automation and Computer Engineering.
In the late nineteen-seventies, the Soviet Union began allowing Jews

to emigrate, and many of them came to the United States. In 1978,
when Blavatnik was twenty-one, he and his family arrived in
Brooklyn, and he began trying to make money, in the ways that were
appealing to a smart immigrant at that time. He became a citizen,
earned a masters degree in computer science from Columbia, got a
job in the I.T. department of Macys, moved to Arthur Andersen. In
1986, he formed an investment company, Access Industries, and
three years later he graduated from Harvard Business School.
Quick, Lassie, go get I.T.! Blavatnik wanted to distance

himself from Russia, but there
were irresistible opportunities there, as it began to move its assets
including its vast natural resourcesfrom state control to private
ownership. After Blavatnik !nished business school, an old classmate
from the Moscow Institute, Viktor Vekselberg, got in touch, and
4 of 33 12/14/16, 10:23 AM
proposed that they work together. Blavatnik began raising money

perhaps from Russian Jews in Brooklyn, one associate says.
According to his friends estimates, he returned to Russia with
between !fty thousand and half a million dollars. He was persistent;
he stood outside the Vladimir Tractor Works, buying stock vouchers
that had been distributed to employees, and eventually got control of
the company. The billionaire entrepreneur Sam Zell recalled meeting
him around that time, and described him as a young, very smart,
well-connected Slav businessman, trying to do deals. Zell found the
climate extraordinarily di"cult. We were making small investments,
doing a lot of di$erent things to see if we could function there, Zell
said of his company. We concluded we could not. The reason?
Start with the Foreign Corrupt Practices Act and go from there.
The %aws of the privatization process are well known. Even Pyotr
Aven, the !rst Minister for Foreign Economic Relations during
Boris Yeltsins Presidency, described aspects of the program as pure
stealing of Russian property. In a country where business laws were
embryonic, the problems were unlike those Blavatnik had
encountered at Harvard. You were not just worrying about things
like cash %ow, Kakha Bendukidze, a Georgian oligarch who
acquired industrial companies in the early nineties, said. It was also:
Can I invest and not be killed? But the country produced enticingly
huge quantities of aluminumfor the military, among other
clientsand, with the Soviet machine defunct, the resource was
underexploited. Youd buy it in the local market and sell it as export,
with a very big pro!t, Bendukidze recalled. It attracted the Mob.
The resulting contestin which organized-crime groups fought with
investors from Russia and abroadwas so unrestrained that it
became known as the aluminum wars.
Blavatnik and Vekselberg were not intimidated. The two began

accumulating a stake in the Irkutsk Aluminum Plant, with a strict
5 of 33 12/14/16, 10:23 AM
division of labor. According to Forbes Russia, Blavatnik told his

partners there, I dont know how aluminum is being made, but I
know how money is being made. Therefore it will be your task to
make aluminum and mine to multiply money. In the next decade,
Blavatnik and Vekselberg exerted political in%uence, defeated rivals,
and amassed enough smelters and plants that their company, Sual,
became the second-biggest aluminum !rm in Russia; in 2007, it was
merged into U.C. Rusal, the worlds largest. Unlike other aluminum
magnates, who got unwanted attention in the press, in court, and
from law enforcement, Blavatnik and Vekselberg attracted scant
noticein part, associates said, because they targeted second-tier
companies, and thus avoided more violent battles. I remember once
saying to Len, How unscathed you are by the aluminum wars! one
friend told me. Len smiled and said, Yes.
lavatnik was not as brash or as ruthless as the other combatants,

B but he had an invaluable asset: American citizenship. migrs
oered a mantle of legitimacy, along with Western capital and
connections. Blavatnik had a Harvard degree, an oce on lower
Fifth Avenue, and an American wife. It could not have been lost on
his Russian associates that his investment !rm was named Access.
In the early nineties, one of Blavatniks former business-school

professors introduced him to Andrei Shleifer, a Harvard economist.
Shleifer, along with a lawyer named Jonathan Hay, helped lead a
Harvard program, funded by the U.S. Agency for International
Development, that was working to create the rudiments of a
capitalist economy in Russia. The two men had some history in
commonShleifer, too, had emigrated from Russia to the U.S. in
the seventiesand Blavatnik began to tell him about his investments
in Russia. According to Harvards agreement with U.S.A.I.D.,
Shleifer should not have invested in markets he was helping to build,
but he nonetheless gave Blavatniks company two hundred thousand
6 of 33 12/14/16, 10:23 AM
dollars. At the investments peak, according to Accesss chief !nancial

ocer, Steven Chernys, it was worth three times what Shleifer had
put in.
In 1997, the Wall Street Journal ran a story detailing allegations that
Shleifer and Hay had abused the trust of the United States
government by using personal relationships...for private gain. Not
long afterward, Shleifer and Hay were removed from their positions,
and U.S.A.I.D. cancelled the project. Three years later, the U.S.
Department of Justice !led civil charges, including fraud, breach of
contract, and making false claims to the federal government.
In a deposition, Blavatnik testi!ed that, after reading the Journal

story, he called Shleifers wife, Nancy Zimmerman, who ran a hedge
fund called Farallon Fixed Income Associates. She was upset, he
said. She thought there was some sort of witch hunt, maybe related
to politics in Russia. The government was interested in two letters
from Blavatniks !les, which suggested that he may have revised
history in order to protect Shleifer. Both were dated July 13, 1994;
both acknowledged the receipt of two hundred thousand dollars and
laid out a fee agreement. One was addressed to Shleifer, and the
other to Zimmerman.
Blavatnik testi!ed that he had taken the original letter and changed
Shleifers name to Zimmermans. Asked why, he said, In our
dealings, it was always Nancy, really, handling this investment, and
Andrei was always explicit that she is the one dealing with this. So I
thought that, going forward, we should probably prepare
documentation re%ecting that. Asked why he didnt change the date,
he said, It wasnt something important. I put it away to review it
later and never got to it. Under further questioning, though,
Blavatnik acknowledged that the original documents had been
addressed to Shleifer alone. Indeed, Chernys, the chief !nancial
7 of 33 12/14/16, 10:23 AM
o"cer, told a grand jury that he had once asked Zimmerman where
to send a draft of the fee letter: I believe all she said was Andreis
dealing with this. Heres his phone number at the o"ce.
The defendantsHarvard, Shleifer, Hay, and Zimmermans hedge

fund admitted no liability, but they eventually agreed to pay more
than thirty million dollars to settle the case. Blavatnik came out
untarnished; though he was an unresponsive and forgetful witness, he
was only a bit player in the governments case. Equally important, he
had turned his access to Americans into funding for his Russian
ventures. In 1997 and 1998, Zimmermans fund had made bridge
loans that helped Blavatnik and his partners invest in Russian
companies. According to Chernyss testimony, those loans amounted
to at least forty-three million dollars.
n 1996, Blavatnik made his !rst major acquisition on his own.

I The company he shared with Viktor Vekselberg, Sual, needed a
reliable and cheap source of fuel, and one of the worlds largest coal
mines was being privatized in Kazakhstan, across the border. At the
time, the Kazakh government, afraid that Russia would encroach on
its territory, was eager for American investment as a bulwark, so
Blavatnik and Vekselberg decided that the bid should come from
Access Industries. Len paid twenty-!ve million for something that
was eventually probably valued at about seven hundred million, Dale
Perry, the regional director of a competitor called AES, said.
Blavatnik was a mysterious buyer. Every time I met with people at
the U.S. Embassy in Kazakhstan, they would ask what I knew about
Len, because they couldnt understand where the money came from,
Perry added.
The next year, Blavatnik aligned himself with a much better-known

investor. Along with Vekselberg, he formed a partnership with an
oligarch named Mikhail Fridman, the head of Alfa Group, one of
8 of 33 12/14/16, 10:23 AM
Russias largest investment consortiums. The three men created

AARnamed for Alfa, Access, and Vekselbergs !rm Renovaand
set out to pursue Tyumen Oil, one of the last oil companies still
owned by the state. Fridman has said that he teamed up with
Blavatnik and Vekselberg because he needed capital. Sergei Guriev,
the noted Russian economist, said he believed that there was more to
it: Among the other oligarchs, there were not many rich and
trustworthy people. But the Blavatnik-Vekselberg partnership was
pretty much a relationship of equalsrare in Russia. I think that
convinced Fridman that these guys would not do things behind his
back.
Fridman is a self-assured, voluble

man, who got his start running a window-washing business. He has
a perfectly round face and belly, like a childs drawing of a snowman,
and a ready charm o$set by an instinct for combat. In a 2010 lecture
called How I Became an Oligarch, he explained, Of all the types
of human activity, entrepreneurship is in some sense closest to war.
A judge in New York later cited Fridmans company for an extensive
and brazen history of collusive and vexatious litigation . . . used to
avoid compliance with their legal obligations. Anders Aslund, a
Russia analyst who knows Fridman, said, Misha has the reputation
that he loves suing companies. For him, its a pleasure, not a cost.
(Fridmans spokesman denied this, saying, Of course he does not
seek or enjoy litigation.)
Blavatnik was not obviously compatible with such a %amboyant

!gureto say nothing of Fridmans partner German Khan. Before
starting a trading company with Fridman, Khan sold T-shirts and
jeans at a market in Moscow. He is now hugely rich. In a U.S.
Embassy communication released by WikiLeaks, a foreign executive
recalled a trip to Khans hunting lodge, which he described as like a
Four Seasons hotel in the middle of nowhere. Khan showed up in
9 of 33 12/14/16, 10:23 AM
the company of his girlfriend and half a dozen prostitutes (he is

married), and referred to The Godfather as a manual for life.
(Khan, who did not respond to requests for comment, has said that
the remark was in jest.) A Western executive who dealt with AAR
for years said, Khan couldnt care less what your wifes name was. He
couldnt care less that it was your birthday. He walked in with his !sts
up and started swinging from minute one, and he got stu$ done.
Blavatnik functioned as the Western partner, the one who could

assess how something might appear in London or New York. When
Len smiles to the Western audience, someone whos never dealt with
Russia says, If thats the face of Russian business, sign me up! the
Western executive added. Blavatnik also had helpful friends in
Russia. One of them was Alfred Kokh, a government functionary
responsible for running the auction for Tyumen Oil, which was
known as TNK. During the privatization process, the state issued
precise eligibility requirements, and when the TNK auction was
held, in July, 1997, those requirements matched AARs quali!cations
exactly. (Kokh, who joined the board of TNK, was investigated for
his role in the auction, but no charges were brought.) In the auction
process, AAR far outbid its competitors, reportedly o$ering $1.08
billion. But much of that was in the form of deferred payments, and,
like many buyers of Russian companies at the time, AAR may have
ultimately paid far less than it o$ered. According to the Russian
newspaper Novaya Gazeta, it gave the Russian state barely a quarter
of the agreed sum.
Like the aluminum companies that Blavatnik had bought, TNK was
a second-tier prospect: a !xer-upper whose oil !elds were
waterlogged. Next door, though, a company called Chernogorneft
had richly productive !elds. According to a suit later !led in New
York by one of the companys partners, AAR began an extended raid,
bene!tting from a new law that made it easy for small creditors to
10 of 33 12/14/16, 10:23 AM
force debtors into bankruptcy. In 1998, a creditor sued

Chernogorneft over an unpaid bill of !fty thousand dollars, and tried
to force it into bankruptcy. Chernogorneft promptly o$ered to pay,
but a judge in West Siberiaappointed by the regional governor,
who happened to be the chairman of TNKdeclared the company
bankrupt, and TNK bought up its debt and began to gain control.
Not long afterward, Chernogorneft started to prepare itself for a
bankruptcy auction. (The lawsuit was dismissed by a New York State
court on statute-of-limitation grounds, and is currently on appeal.)
In pursuing Chernogorneft, Blavatnik and his partners made a

formidable enemy: the oil company BP, which had invested heavily
in Chernogornefts parent company. John BrowneBPs chairman
and C.E.O., who was known as a resourceful !ghterdecided to
seek revenge. At the time, TNK was asking the Export-Import Bank
of the United States, a federal agency, for !ve hundred million
dollars in loan guarantees, mostly to buy equipment from
Halliburton to rehabilitate its !elds. Browne launched a lobbying
campaign to block the loans, arguing that the banks money would be
sanctioning corruption. According to a TNK o"cial, BP
characterized the companys principals as crooks and thugs. A
C.I.A. document noted that TNKs president had admitted to
bribery.
It was Blavatniks chance to prove his value to his partners. Along

with his American business associates and family members, he made
many thousands of dollars in political contributions, courted
congressmen, and lobbied the Export-Import Bank. But, even when
it was his job to talk to the press, he doled out his words
parsimoniously. Describing his role to the Washington Post, he said,
The American connection is of crucial importance. A former BP
executive commented, Len was never that assertive, never that
e$ective in the political realm. Hes a businessman, and he was
11 of 33 12/14/16, 10:23 AM
uncomfortable doing that kind of stu$.
James Harmon, then the chairman of the Export-Import Bank, went

to Russia several times to meet with the AAR partners, and
conducted an investigation to satisfy himself that they were not
crooks and thugs. Fridman is said to have argued that he and his
partners had not violated Russian lawand that they were being
attacked because they were Jewish entrepreneurs, trying to take on
the high-Wasp British establishment. Harmon found the young
renegades creditworthy, and decided to !ght for the loans. The AAR
partners praised his courage, and the Russian media speculated that
his family came from Russia. (It did not.)
In November, 1999, the auction for Chernogorneft went forward, as

armed guards prevented the delivery of a court order to delay it.
TNK paid less than a hundred and eighty million dollars for a
company that only a year before had produced 1.2 billion dollars
worth of oil. It seemed unreal, John Browne wrote in a 2010
memoir. We were a nave foreign investor caught out by a rigged
legal system.
To many Clinton Administration o"cials, the a$air exhibited

%agrant contempt for the rule of law. In December, Secretary of
State Madeleine Albright forced the bank to suspend the loan
guarantees. Eventually, the Russians and BP negotiated a settlement,
and the bank agreed to the loans. Blavatnik expressed gratitude to its
board of directors for a vote of con!dence in the highly professional
and West-oriented management team at TNK.
The truce didnt last. A year later, TNK moved in on a company

called Yugraneft, owned in part by Chernogorneft. According to the
suit !led in New York, TNK used a Russian court to gain majority
12 of 33 12/14/16, 10:23 AM
control over the company, then forged minutes of a shareholder

meeting to elect a TNK ocial as general director. Two days later,
according to the lawsuit, the new director, accompanied by sixteen
TNK militia members dressed in fatigues and carrying AK-47
machine guns, forcibly entered Yugranefts corporate oces. Soon
after, they visited the companys !eld oce, causing Yugranefts
foreign employees to %ee the country. (A spokesman for Access has
called the allegations preposterous and untrue.)
Fridman may have been unfazed by litigation, but Blavatnik was not.
He hated the notoriety that came with suits !led in U.S. courts; he
has said that if he had to be sued he preferred to be sued in Russia.
Do you play drums? he !ght over Chernogorneft

T ended up costing BP a
write-down of two hundred million dollars. But Browne was
desperate for Russias oil, and was convinced that he could
outmaneuver his young adversaries next time. So, in June, 2003, in
London, he and Fridman signed an agreement to create a joint
venture, called TNK-BP. It was the largest deal in Russian corporate
history, and was celebrated with suitable pomp: the signing took
place at Lancaster House, a nineteenth-century mansion near St.
Jamess Palace, with President Vladimir Putin and Prime Minister
Tony Blair standing by. As the partnership took shape, Browne called
his erstwhile enemies remarkable. A BP executive said, I think he
looked at them as barbarians whom BP would teach to walk and talk,
as in My Fair Lady. As he said, Were going to show them the
norms of operating in the world. The executive laughed. They
actually showed us.
The new company was designed as a !fty-!fty proposition, and the

Brits paid the AAR partners almost seven billion dollars in exchange
for half of their holdings. Putin warned that in Russian business
13 of 33 12/14/16, 10:23 AM
there must always be a boss, and at TNK-BP German Khan quickly

asserted dominance. Stories spread among BP executives that he
brought a gun to meetings, even though, as one said, German didnt
need to do thathe had other people with guns, and he had his
personality. Blavatnik seemed content to let his partners take the
lead. Len was another oligarch, but he wasI think the word we
used was house-trained, the Western executive said. He came to
meetings, he was involved, but he was not one of the primary actors.
Blavatnik may have been discom!ted by his partners behavior, the
executive said, but you dont make billions of dollars in Russia from
standing on the corner and handing out lollipops.
Not long after Putin became President, in 2000, he met with a group
of oligarchs and reportedly gave them an ultimatum: they could
retain their assets if they stayed out of politics and were generally
compliant. Fridman maintained good relations with the Kremlin; the
AAR partners, according to a friend of theirs, persuaded Putin that
they would obey. (Fridman denies attending such a meeting.) At the
same time, TNK-BP provided some defense. They needed krysha,
the executive said, of the AAR partners. It means roof, and all
Russians know the word. What it means is: Whos going to protect
you from the storm? If you brought in a big Western partner, it was
going to be really rough for the Russian state to mess around with
you.
For the oligarchs, the best illustration of their risk was the case of
Mikhail Khodorkovsky, the chairman of Yukos Oil, Russias biggest
oil company, who had challenged Putin in politics and in business.
On the morning of October 25, 2003, word came that masked
law-enforcement ocers had taken Khodorkovsky at gunpoint when
his private jet stopped for fuel in the Siberian city of Novosibirsk. He
was on his way to a Rand Corporation forum in Moscow, where a
crowd of Russian and American businessmen were waiting for him
14 of 33 12/14/16, 10:23 AM
to lead the days !rst session, Relations Between the Business lite
and the Political lite. When they learned of his arrest, a number of
oligarchs huddled in a separate room to write a letter to Putin. The
letter was politically correct, saying things like This will harm
Russian business. It was quite soft, Bendukidze said. Putin later
replied, Stop your hysterics. Khodorkovsky was convicted of fraud
and tax evasion, and sent to prison in Siberia. He was released last
December.
ven though Blavatnik had the protection of American

E citizenship, he was shaken by what happened to Khodorkovsky,
according to a friend of his, who noted that Blavatnik began an
extraordinary series of real-estate purchases around that time. In
2004, he bought his London mansion, reportedly outbidding his
fellow-oligarch Roman Abramovich. He bought the Grand-Htel
du Cap-Ferrat, in the South of France. In New York, he bought the
New York Academy of Sciences mansion, on East Sixty-third Street,
and then a sprawling apartment on Fifth Avenue. Soon afterward, he
bought a !fty-million-dollar town house on East Sixty-fourth Street,
previously owned by Edgar Bronfman, Jr., the C.E.O. of Warner
Music. In perhaps the only break in a string of successful
acquisitions, he was turned down by a co-op board in Manhattan; he
told a friend that his mistake was going to the interview
accompanied by armed bodyguards.
But Washington during the Bush Administration was less welcoming

to Russian oligarchs than it had been. Think tanks were still
receptive, though, and Blavatnik, Fridman, and Vekselberg donated
generously. In 2000, Blavatniks Access Industries gave twenty-!ve
thousand dollars to the Kennan Institute, and the next year he was
appointed vice-chairman of the Kennan Council, a fund-raising
adjunct. He seemed shy in polished social settings, Ruble, the
institutes director at the time, said; when he attended the annual
15 of 33 12/14/16, 10:23 AM
dinner, we literally would write his remarks, and he would read

them in a very ponderous way. It was painful to watch. But he had to
speakhe was the vice-chairman.
As the three partners tried to establish themselves in Washington,

BP did what it could to thwart their eorts. The former BP executive
said, We tried to bring pressure on Len from the U.S. government.
For a time, I think we made Washington seem like an unfriendly
place. In 2006, BP learned that Vekselberg was slated to receive the
Woodrow Wilson Award for Corporate Citizenship at the Kennan
Institutes annual fund-raising dinner, and the company intensi!ed
its campaign. Joe Dresen, a program associate at the institute,
recalled, We received word that there might be some very negative
news coming out about Vekselberg. Nothing scandalous emerged,
but the award was rescinded, the former BP executive said, because
of pressure from a number of places, including directly from a senior
U.S. government ocial.
When the institute told Vekselbergs sta, Dresen said, they were
not pleased. We decided that we would give the award the next year,
and not for corporate citizenship but for public service. As evidence
of good works, Dresen pointed out that Vekselberg had bought nine
Faberg eggs from the Forbes family (for a hundred million dollars)
and repatriated them to Russia. Many in Russia viewed Vekselbergs
action as a transparent attempt to please Putin. A joke went around
Moscow, playing on the Russian usage of eggs to refer to testicles,
that Vekselberg was showing o his eggs to the public. In 2007,
Vekselberg got the award, and Access gave !fty thousand dollars to
the Kennan Institute. But the award seemed to bring little prestige.
A lot of people thought Vekselberg was not an honorable person,
Ruble said. Afterward, a selection process was set up to vet
nominees, so it wasnt just left up to the development oce.
16 of 33 12/14/16, 10:23 AM
Eventually, Blavatnik informed the Kennan Council that he was

resigning; he was going to spend more time in England, and conduct
his philanthropy there. In London, Blavatnik quietly made friends
who could explain the mores of local society. He took Weidenfeld to
lunch, telling him that he was really not an oligarch but an
American naturalized emigrant, and asked what he should do to
establish a cultural legacy. When Weidenfeld advised him to create
the school at Oxford, Blavatnik said, Fine, and Weidenfeld began
matchmaking. Blavatnik made major contributions to the Royal
Academy, the Tate Modern, and the National Gallery. He also hired
Sir Michael Pakenham, a noted British diplomat, to advise him on
English manners, morals, life, and business.
I want to make my mark on the worldand Weidenfeld said, I dont know his
have it disappear in ten seconds.
Russian history in detail, and Im
not concerned with it. He is a
co-chairman of the international advisory board of the Blavatnik
School of Government, and Blavatnik has contributed to a
foundation that Weidenfeld runs. On Blavatniks !ftieth birthday,
Weidenfeld attended a huge party at the Grand-Htel du
Cap-Ferrat, where Blavatniks wife, Emily, surprised him by dancing
with a troupe of professionals in a Ballets Russes adaptation. More
recently, Weidenfeld said, he went to a costume party in Berlin,
where Blavatnik arrived in a tailor-made Stalin uniform. Still, people
who know Blavatnik describe him as less ostentatious than other
oligarchs. Ive known many a tycoon in my life, Weidenfeld said.
Hes one of the few who are unspoiled. For a person of that wealth
and sudden phoenix-like rise, hes got very good taste.
or all Blavatniks social success, his working life was considerably

F more dicult. In 2005, he bought the Dutch-based chemicals
producer Basell Polyole!ns, for !ve billion dollars. Two years later,
Basell acquired another chemicals company, Lyondell, in a nineteen-
17 of 33 12/14/16, 10:23 AM
billion-dollar deal, !nanced by enormous debt. When the !nancial

crisis swept in, the merged LyondellBasell struggled, and in January,
2009, it !led for bankruptcy. As the !ling was being prepared, several
investors began a three-day !ght for in%uence. A person involved in
the deal said, Len played his cards close, strong, and smart. In those
seventy-two hours, I thought we had to be good if we were going to
win, because this guy was not going to make a mistake. In the end,
though, Blavatnik lost the !ght, as well as his initial investment,
reportedly worth more than a billion dollars. Creditors sued him for
fraud; Blavatnik denied it, and the litigation is still ongoing. A friend
said that the public bankruptcy wounded Lenhe felt some degree
of humiliation.
Blavatnik was also suering other losses. He had invested a billion

dollars with JP Morgan Chase, and when the !nancial crisis hit he
lost a hundred million, by his reckoning. In 2009, not long after the
LyondellBasell bankruptcy, Blavatnik sued JP Morgan Chase,
alleging that the bank had negligently put his money into risky
mortgage-backed securities, which he had not authorized it to do.
He wanted the money back. At the time, JP Morgan seemed
impregnable. It had emerged from the !nancial crisis as the strongest
bank in the country, and its chairman, James Dimon, was hailed as a
model banker.
In London, the !ght with BP continued to intrude on Blavatniks

life. In 2007, BP had begun secret negotiations with Gazprom, the
state-owned Russian oil-and-gas giant, to buy AARs share of the
joint company, forcing out the oligarchs. This breached the
agreement that Browne and Fridman had negotiated, but Browne
had been forced to resign from BP; hed been caught perjuring
himself in an eort to keep a British tabloid from writing about a
homosexual relationship hed had.
18 of 33 12/14/16, 10:23 AM
Around this time, TNK-BP faced a series of harassments, of a kind

known in Russia as administrative action. Russian police raided
TNK-BPs o"ces in Moscow; an employee was arrested and accused
of espionage. More than a hundred others had their visa status
threatened, and BP pulled them out of the country. According to a
U.S. Embassy cable released by WikiLeaks, TNK-BPs C.E.O.,
Robert Dudley, sometimes came home at night and found papers on
his kitchen table: legal summonses compelling him to appear at
hearings far from Moscow, with only a few hours notice. Fearing
that his o"ce was bugged, Dudley passed notes with his colleagues
to avoid being overheard. He began feeling ill. On a trip out of
Russia, according to three people close to BP, he had his blood
tested, and poison was found in his bloodstream. He stopped eating
food provided by the company and began to feel better. Finally, one
day in July, Dudley learned that the police were coming for him the
next morning. He went out the back door of his apartment to a
waiting car and left the country.
Not long afterward, the Mail on Sunday reported that BP was

considering sequestering the Russians assetsincluding Blavatniks
palatial house in Londonin retribution. (BP denies such a plan.)
Blavatnik was sensitive to the negative press; he was striving for
legitimacy in England and attempting to establish the Blavatnik
School of Government. It hit him more than the other partners, an
acquaintance said. BPs executives believed that Blavatnik, badly
overleveraged, was vulnerable, and was trying to persuade his
partners to buy out his interests.
Whatever pressure Blavatnik felt had little e$ect; BP soon conceded

the struggle, and gave AAR greater authority over TNK-BP. Even
the LyondellBasell deal gradually turned in Blavatniks favor. As the
company emerged from bankruptcy, he invested $1.8 billion more in
it. By last year, according to Forbes, that investment was worth about
19 of 33 12/14/16, 10:23 AM
$6.2 billion. Len didnt even lose when he lost, the investment
banker Ken Moelis said. When you have that much leverage, and
that much money in the bank, even if it doesnt work you often get a
second bite at the apple.
For several years, the AAR partners and BP engaged in intermittent

battlessometimes !ghting with their bare hands, Putin saidbut
BP never gained the advantage. Finally, it was Putin who decided the
contest. Last March, the state-owned Rosneft bought out TNK-BP
for !fty-!ve billion dollars, creating the worlds largest publicly
traded oil company. The AAR partners walked away with a reported
twenty-eight billion dollars.
n paper, at least, Blavatnik was about seven billion dollars

O richer, and, for the !rst time in more than a decade, he was
free of his overweening partners. In 2010, he told the Financial
Times that he was planning to build a media platform for the 21st
century. He bought the U.K. operation of Mel Gibsons Icon Group,
and eventually shifted its focus from !lm distribution to production.
The company is now collaborating with Martin Scorsese on the !lm
Silence and working on an Ian McKellen !lm called A Slight
Trick of the Mind. Blavatnik has acquired signi!cant stakes in
Amedia, a Russian TV producer, and Perform, a U.K.-based digital
sports-rights !rm. As a businessman, he has always been most
comfortable in commodities: aluminum, oil, coal, petrochemicals.
Those are in his soul, a friend said. But he likes the pro!le of a
media investor. He appears to enjoy his new celebrityat least in
controlled settings, such as his Warner Music parties, or a private
celebration he recently held for a Hollywood costume exhibition
(which the pop singer Boy George described on Twitter as a lovely
party hosted by the charming Len Blavatnik!).
Hollywood oers extraordinary opportunities to a newcomer with
20 of 33 12/14/16, 10:23 AM
billions of dollars, and Blavatnik was able to be selective. In the

mid-two-thousands, Ari Emanuel, the founder of the Endeavor
talent agency, was looking for !nancing for an expansionperhaps
seventy-!ve million dollars. Blavatnik was interested in the agency
business but decided that he didnt want to make such a small
investment. He began putting money into !lms with Harvey
Weinsteins company. According to a friend, the investment fared
poorly enough that Blavatnik withdrew his support, but he said, I
dont hold it against Harvey. I !nd him entertaining. For several
years, he and Weinstein have co-hosted the Cannes Film Festivals
annual Business of Film Lunch on Blavatniks yacht. In 2011, Mick
Jagger and some friends arrived by boat, but the yacht was full, and
they were turned awaya seigneurial act that only increased
Blavatniks standing. That August, Blavatnik attended a fund-raiser
for President Obama at Weinsteins town house in Greenwich
Village, and, according to the Times, oered Obama advice on how
to double U.S. oil production. (He was one of the wealthiest donors
to the Obama campaign, and also contributed to Mitt Romneys.)
Last year, the hedge-fund owner Daniel Loeb began pressing Sony
to sell o pieces of itself. Blavatnik considered such an investment,
his friend said, but decided against it: Len doesnt want to invest in
Sony. He wants to own it.
Why are we here? f Blavatniks plan for Warner

I Music is successful, the
company will become the foundation of a media empire. In 2003, he
joined a consortium, organized by the Seagrams heir Edgar
Bronfman, Jr., to buy Warner Music from Time Warner. The group
succeeded, with a bid of $2.6 billion. According to Fortunes Fool,
Fred Goodmans 2010 book about Bronfman and the music industry,
Blavatnik contributed only about twenty-!ve million dollars, but he
was given a seat on the board.
21 of 33 12/14/16, 10:23 AM
Bronfman, as chairman and C.E.O., hired Lyor Cohen, who led Def
Jam Records in its early years, to run the companys recorded music
in the U.S. Cohen is notorious for his willingness to operate outside
customary boundaries. Not long before Bronfman hired him, he and
Def Jam were found liable in a high-pro!le fraud case, in which the
judge, noting the numerous inconsistencies in his testimony, said that
the jury could reasonably conclude that he was morally
reprehensible. (The decision was reversed on appeal, for lack of
evidence.) As Blavatnik got involved in Warner, Cohen attended to
him. The two went sailing together on Blavatniks yacht. A
photograph taken at a Grammy after-party shows them casually
embracing; Cohen, with his distinctive gray crewcut and light eyes,
towers over Blavatnik.
In late 2010, Bronfman and the other investors in Warner decided to

sell the company. Bronfman saw Blavatnik as an appealing buyer
likely to pay generously, and to cause little disruption. Cohen courted
him, and several colleagues credited Cohen for having worked Len
hard on the value of the business. Warners business model,
disclosed in the due-diligence process, was strikingly optimistic.
Many analysts believed that, after a withering decade in the industry,
digital revenue would !nally oset the decline in physical sales. On
May 6, 2011, Blavatnik agreed to buy the company, for $3.3 billion.
His oer was much higher than his closest competitors, according to
someone familiar with the process, and some industry reporters said
that he had overpaid. Still, Blavatnik viewed it as a gateway
investmenta way to get involved with digital media of all kinds. A
lot of people viewed the music business as roadkill on the
information superhighway at the early part of the century, an
associate said. Now everyones disrupted. And music has really kind
of de!ned digital entertainment. So, if digital is a guiding framework
for you, it might make sense to start with music.
22 of 33 12/14/16, 10:23 AM
At a town-hall event for Warner Music employees in London in

2011, Blavatnik greeted the audience by paraphrasing a comment
often attributed to Winston Churchill: Like a womans dress, my
speech should be long enough to be respectable but short enough to
be intriguing. According to employees, he said that he had just been
to Japan and China. The artists there are so excited to be part of
Warner. The farther away you are from L.A., New York, and
London, the name Warner represents something special. But, he
went on, for consumers whats important is the artist, not the record
companya lost opportunity. A brand stands for quality, something
particular for a customersomething for which you can charge
additional money. He reminded his listeners, Even though its the
music business, its still business. We should be making money.
At the meeting, employees said, Blavatnik suggested that it was an

advantage to be an outsider: One of the themes I always hear people
talk about at Warner is: We do something better than other people in
the industry, or, This is how its done in the industry. First of all, its
an industry with three players. Secondly, its not the best-run
industry in the worldif anybody disagrees, raise your hand. I think
we should compare ourselves to the best practices outside the
industry. He pointed to Amazon, to Google, and to consumer-
facing companies, like Procter & Gamble. Its much more complex
to sell a can of chicken soup one thousand times over than to sell
really exciting artists. We should learn from them how they are able
to sell the same old stu to consumers over and overincreasing the
price all the time.
t Blavatniks !rst board meeting as owner, in July, 2011, he

A arrived with another outsider: Stephen Cooper, an expert at
restructuring companies like Enron and Krispy Kreme Doughnuts,
whom he had worked closely with during the troubled
LyondellBasell deal. In the new management structure, Cooper was
23 of 33 12/14/16, 10:23 AM
the chairman and Blavatnik the vice-chairman, with Bronfman

remaining as the C.E.O. In previous businesses, like TNK-BP,
Blavatnik was a relatively hands-o investor. At Warner, he is more
engaged in running the company, and he seems to want it to work as
his interests in oil or petrochemicals do. But the management
attitude he articulated at the Irkutsk Aluminum Plantthat it was
his workers job to make a product and his to multiply money!ts
uncomfortably in the record business, where a passion for the
product is a mark of distinction. No matter how well or how poorly
Warner did under Bronfman, he impressed his executives with his
belief in the power of music.
Those who have worked with Blavatnik at Warner are not convinced
by his analysis of the business. Ive heard him talk about the space,
and it was not an impactful, coherent, strategic overview, a former
executive said. Ive never heard the people around him talk about his
being articulate, or his power of persuasion. They do talk about his
being forceful. Employees describe Blavatnik as forbidding,
distrustful, and hot-tempered. Len has this aectDont fuck with
me, Im in control, someone who has worked for him said. Edgar
was very dierent. You didnt need to see the knifeit was enough to
know it was in the pocket. Len sticks the knife on the table.
For Blavatnik, Warner Music was another !xer-upper. As the third-

largest music company, after Universal Music Group and Sony
BMG, it was too small to compete meaningfully. But, a month and a
half after the Warner deal was announced, EMI Records, the British
label of the Beatles and Katy Perry, came on the market. It was an
opportunity to transform a second-tier company into a powerhouse.
After a cautious, by the book analysis, an associate said, Blavatniks
team authorized a bid of $1.5 billion; the conclusion was This is the
number that makes sense, and if we get outbid its stupid money
prevailing. When word came that there was a higher bid, Bronfman,
24 of 33 12/14/16, 10:23 AM
who had tried for years to combine Warner and EMI, apparently
argued strongly that Warner should compete. Another insider
maintained that the company could have made its money back in
four or !ve years: It was a no-brainer. Warner had diminished to the
point that it was not a real player in the major leagues, but with that
acquisition it would have been back in the game. This person
paused, and added, Blavatnik and Cooper do not understand the
record business. They didnt see the values.
Blavatnik was adamant. In his acquisitions of LyondellBasell and

Warner, he had been seen as overpaying, and he was stung by the
perception. He refused to increase his bid, and Universal Music won
the auction, at $1.9 billion. At the time, Blavatnik defended his
decision: I think its very important to maintain discipline and be
!nancially sound. So Universal just paid four hundred million dollars
more than we were planning to pay. More power to them.
Universal Musics chairman and C.E.O., Lucian Grainge, is a

consummate insider, a !fty-three-year-old Englishman who has been
in the business since his teens. His bid for EMI was risky; a
combined Universal-EMI would control about forty per cent of the
world market, a degree of dominance that regulators might not allow.
And Grainge agreed to pay more than eighty per cent of the price
even if regulators blocked the sale.
MARCH 1, 2010 In the U.S. and in Europe,

Warner Music lobbied
aggressively against the merger, claiming that it was anti-competitive.
Ultimately, Universal had to sell o assets in order to win approval
from the European Union. Last February, it oered up the
Parlophone group, with Pink Floyd, Radiohead, and Coldplaybut
without the hugely pro!table Beatles catalogue. It was actually an
opportunity for Universal, because they were able to pick and choose
25 of 33 12/14/16, 10:23 AM
what to include, Alice Enders, of Enders Analysis, in London, said.

People make a big deal of the catalogues containing Pink Floyd, but
thats an administrative deal, which ends in January, 2016, and Pink
Floyd could well walk away. And can you imagine Parlophone
without the Beatles?
Blavatnik, having lost the auction for EMI, wanted part of it, and he
bought Parlophone, for seven hundred and sixty-!ve million dollars.
As with Warner Music, it was substantially more than other bidders
were willing to pay, according to someone familiar with the sale.
Had Warner got the whole of EMI, they would be in a much better
position, a veteran music executive said. They got a good bit. But
theyre a minnow compared to the two whales.
ven as Blavatnik told his employees about bringing in methods

E from other industries, he talked privately with a number of
people who had in-depth knowledge of the music business. Len
certainly wants the input of industry players, a former employee
said. In some cases, he expresses a disinterest in people whove been
around a long time, but at the same time he goes after those people.
In Russia, he had got accustomed to working with big personalities,
and he sought them out in the U.S. He invested in Miami real estate
with Alan Faena, an Argentinean developer who favors white tunics
and a white panama hat, and he has become friends with Michael
Milken, the former junk-bond king, whom an acquaintance describes
as fascinated by Len. Through Milken, he met Irving Azo, the
longtime manager who has been described by Billboard as the most
powerful person in the music business.
Blavatniks !rst managerial challenge at Warner came from another

imposing personality. Lyor Cohen had recently been promoted to
oversee recorded music worldwide, and, with Blavatnik !rmly
ensconced, Cohen felt that he was, too. At an early board meeting,
26 of 33 12/14/16, 10:23 AM
Cohen argued that he should replace Bronfman as C.E.O. of the

company. Bronfman, who had hired Cohen not long after the public
embarrassment of his fraud trial, was astonished; he told an associate,
Lyor just threw me under the bus. But Blavatnik seemed
unsurprised, and later mused in private meetings about whether
Cohen should indeed become C.E.O. Cohen began skipping
Bronfmans meetings and conference calls. (Cohen denies this, and
says that he did not ask to be made C.E.O.) As the tension grew,
Bronfman wanted to leave, but Cooper and Blavatnik prevailed upon
him to stay. So, after weeks of chaos, Bronfman became the
chairman and Cooper the C.E.O.
Cohen reported to Cooper directly, and the two did not work
smoothly together. Steve is a molecular operator, one of their
colleagues recalled. Hed ask Lyor to explain something, and Lyor
would say something like Dont try to understand the mystery. Steve
would say, Are you kidding me? Employees watched as the
diminutive Cooper, teeth clenched on an unlit cigar, argued with
Cohen, a large man who sometimes conveys the impression that a
blow may be seconds away. Steve was just amused, this colleague
continued. Hes Lens kind of guydirect, cold-blooded, a lot of
machismo.
For a year, Blavatnik stood by and let them !ght. He and Cohen
were close. At the London town hall, the two men had just come
back from a business trip in Asia, and Cohen said to the crowd, One
thing Len hasnt told you: he doesnt sleep. Weve been around the
world together. Im not quite sure why this event is being held today,
since we havent slept in eight days. But it works for him, so its going
to work for me, O.K.? Finally, last September, after a yearlong
contest, Cooper told Blavatnik that Cohen had to go. Blavatnik
assented, but said that he wanted to tell Cohen himself. (Cohen says
that he resigned.)
27 of 33 12/14/16, 10:23 AM
Whatever the circumstances of Cohens departure, it saved Blavatnik

money; the year before Cohen left Warner, his total compensation
was eleven million dollars. Even in hard times, music executives
enjoy a standard of pay that baes the literal-minded reader of a
balance sheet. Bronfman paid his top executives well, believing that
they would ultimately make him more money. Blavatnik and Cooper,
by contrast, see Warner as a commodity business: you hire
contractors to make songs, and then you sell songs to the public.
Their model was diligent !nance workers, not executives who went
on long creative retreats to Ibiza. Why should the media business be
so dierent? In 2012, Coopers !rst full year as C.E.O., his total
compensation was $4.3 million, a fraction of what his subordinate
Cohen had made.
Late in 2012, Blavatnik and Cooper presented their solution to the

problem of overpaid executives: the Senior Management Free Cash
Flow Plan. It eliminated severance payments and annual bonuses. In
their place, executives would receive dividends, and would have a
stake in any increased value of the companyif they remained there
for at least seven years. In the meantime, they would be free to leave
whenever they wanted. You can argue that the music business does
not have the most rational compensation structure, and this was a
sensible move, someone familiar with the plan said. The other
obvious point is that it is very much for the bene!t of the ownership
of the company, and to the detriment of the executives. Although
there was enormous political pressure to participate in the plan, more
than half the executives to whom it was oered declined. One
employee argued that paying executives less was a false economy:
You can complain about the marketplacebut youre in the market.
You have to compete. And Warner is the smallest. So why would
anyone good come to Warner?
Blavatnik has been more publicly appreciative of his artists, dancing
28 of 33 12/14/16, 10:23 AM
in the front row at a Bruno Mars performance and hiring the British
singer Ed Sheeran to play at his daughters bat mitzvah. But he and
Cooper seem to believe that musicians are as overpaid as executives
are. Blavatnik is de!nitely cutting back on what he pays artists, an
industry veteran said. If youve got an artist that should get a big
deal, you dont even call there, because you know they wont be a
player.
At Universal, Lucian Grainge has been spending freely on artists and

creative executivesincluding the well-regarded John Janick, whom
he hired away from Warner after Cooper and Blavatnik apparently
resisted his terms for a new contract. Universals dramatic expansion
has improved its reach. Lucian is playing the market-share game,
Irving Azo saidtrying to own both the most popular current
music and the most lucrative catalogue of old songs. Hes killing it
on the new artists, Azo added. In September, Universal became
the !rst company to hold all of the top ten singles on the Billboard
Hot 100 chart.
OCTOBER 11, 2010 Despite persistent predictions that

the music business is turning the
corner, it has not yet done so; some analysts suggest that 2014 may
be the year. The business faces great challenges. The decline in
physical sales continues to exceed the growth in digital; analysts
speak ominously about the CD cli, the point at which CDs
disappear from retail. And while streaming services free oers have
been popular, relatively few people have proved willing to pay for a
subscription. In a struggling industry, Blavatniks austerity measures
may be appropriate. But they risk leading to a company populated by
artists and executives who could not get a more lucrative contract
elsewhere. One friend suggests that Blavatniks strategy rests less on
new music, and the expensive, speculative business of trying to
develop artists, than on Warners gigantic catalogue of recordings and
29 of 33 12/14/16, 10:23 AM
publishing, from the early sixties to the present. For several years,
Blavatnik has been putting money into digital streaming services.
Hes saying, This catalogue is going to be worth a lot, and Im
investing in things that will help the catalogue be worth even more,
the friend says. I believe he thinks of it as more of a real-estate play
than a media-and-entertainment play. The catalogue is like a
building that throws o cash. Instead of renting space, youre renting
music.
After two and a half years, Cooper, who had been considered an
interim C.E.O., seems increasingly comfortable in the job. At the
start, he made no secret of his lack of interest in the artistic process.
At the London town hall, he remarked, Im certainly not a music
expert. I got stuck in the Beach Boys. Lately, though, he has been
asking employees to play him records. Some people at Warner
speculate that Blavatniks teen-age son, who likes music, will one day
run the company. Blavatnik insists hes investing for the long term. I
hope to die owning this company, he has said, but not soon.
ast August, Blavatnik !nally got a decision in his suit against JP

L Morgan Chase. He had sued to get his money back, but, as the
banks troubles began to emerge, the lawsuit also oered an
opportunity to underscore his role as public benefactor. In the
Financial Times, he castigated JP Morgan for its arrogance. He told
Joe Nocera, of the Times, that he hoped his action would help the
less fortunate to pursue redress from big banks. The small guy cant
get anywhere with suits like this. I am a wealthy man. I will spend
whatever it takes. Noceras column was titled A Billionaire Army of
One vs. a Bank. Blavatnik loved it.
The New York state courts decision was mixed. The judge found JP
Morgan guilty of breach of contract but not of negligence (the bank
made an error of judgment, that is all, he wrote), and ordered it to
30 of 33 12/14/16, 10:23 AM
pay sixty-three million dollars, which included interest. Blavatnik

treated it as an unmitigated victory. In a public statement, he wrote,
I hope that this decision sends a clear message to JP Morgan that
they have to honor their obligations to their clients. There are a lot of
people out there who, I understand, feel they have been wronged by
JP Morgan but cannot aord to take on a huge bank. They shouldnt
have to. He concluded, JP Morgan should do the right thing
because it is the right thing to do.
As Blavatniks fortune grows, he seems increasingly concerned with

doing the right thing, or at least appearing to. Last year, his family
foundation gave !fty million dollars to Harvard, to support
biomedical research and student entrepreneurship, and ten million
dollars to Yale, for immunobiology research. It expanded the
Blavatnik Awards for Young Scientists, which Blavatnik has likened
to an early-career Nobel Prize. But the gift to Oxford, to endow the
school of government, remains by far the largest.
A few alumni criticized Oxford for taking the money. Ilya Zaslavsky,
who worked for TNK-BP, exhorted senior administrators to look
more closely at Blavatniks business activities in Russia. Stuart
Leasor, an Oxford alumnus who advised BP in its 2008 battle with
AAR, told me, Having the Blavatnik School of Government sounds
rather like having a henhouse sponsored by a fox. Mainly, though,
the announcement of the school was met by loud approval. One
supporter was Blavatniks old antagonist John Browne, who is a
co-chair of the schools international advisory board. Bill Clinton and
Eric Schmidt, of Google, are also members.
At the launch ceremony, Blavatnik stood before pastel architectural

renderings of the school. (The building, a stack of glass-faced disks,
is designed by Herzog & de Meuron, the Swiss !rm that also
designed the Tate Modern.) I am asked many times, Why the
31 of 33 12/14/16, 10:23 AM
school at Oxford? Blavatnik began. And really its very simple. He

wore a red-collared black academic gown, a mauve tie showing
through. Over !fty or sixty graduates of Oxford have been Prime
Ministers, Presidents, not only in this country but around the world.
Thats an argument which really stops any further conversation,
frankly. He gave a short laugh, glancing toward the dignitaries at
the edge of the stage.
At Oxford, Blavatnik seemed far removed from the war with BP. He
was a celebrated American industrialist, engaged in what Andrew
Carnegie called the di"cult task of wise distribution. His delivery
had loosened up; he projected a measure of con!dence. What wed
like to doand I think the university and myself share this
visionis to build the school of government for the twenty-!rst
century, he said. And my hope is that He paused, venturing o$
his script for a moment. I dont know if its eight hundred years from
nowhe laughed, beaming at the thought. But, hopefully, one
hundred years from now, the Blavatnik School of Government will
be recognized as one of Oxfords most esteemed institutions, and the
university will be proud of it. !
Connie Bruck has been a staff writer at The New Yorker since
1989.
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33 of 33 12/14/16, 10:23 AM
Candor Concerns Spurred U.S. To Pull Russian Magnate's Visa - WSJ http://www.wsj.com/articles/SB117695154811875145
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit
http://www.djreprints.com.
http://www.wsj.com/articles/SB117695154811875145
POLITICS
Candor Concerns Spurred U.S. To Pull

Russian Magnate's Visa
By MARY JACOBY and GLENN R. SIMPSON
Updated April 19, 2007 12:01 a.m. ET
The State Department revoked permission for a Russian aluminum magnate to

enter the U.S. in mid-2006 after concerns were raised about the accuracy of
statements he made in a meeting with the Federal Bureau of Investigation,
according to U.S. officials and others familiar with the matter.
Billionaire Oleg Deripaska, one of Russia's most prominent industrialists and

the controlling shareholder in the world's largest aluminum maker by volume,
United Company Rusal, obtained a multiple-entry U.S. visa in 2005 after a
years-long ban on his entry because of his alleged organized-crime ties. Mr.
Deripaska paid $560,000 to former Republican Sen. Bob Dole's law firm to help
resolve the matter, The Wall Street Journal reported in a page-one article
Tuesday.
But the ban on Mr. Deripaska was

RELATED ARTICLE reinstated around the middle of last
Lobbyists Help Ex-Soviets Woo Washington year by the State Department after
04/17/2007 officials from the Justice Department
concluded that Mr. Deripaska wasn't
being candid with them about his past
1 of 3 12/15/16, 12:17 PM
business dealings, U.S. officials and others familiar with the matter said.
The visa was originally granted, in part, so that FBI organized-crime agents
could interview the metals tycoon, U.S. officials said. Mr. Deripaska has strongly
denied any involvement in organized crime. A Justice Department official
declined to confirm or deny a meeting involving Mr. Deripaska.
THE TRUMP TRANSITION
Tech Executives Talk Jobs, Regulations With Trump

President-elect Donald Trump struck a conciliatory tone
while meeting with prominent tech executives at Trump
Tower, telling the Silicon Valley leaders that his goal is
'to help you folks do well.'
CLICK TO READ STORY
For Tuesday's article in the Journal,Deripaska spokesman Simon Moyse

asserted that the Russian businessman "has a valid U.S. multiple-entry visa." U.S.
officials had given conflicting accounts of the status of the visa.
But two senior U.S. officials and others with direct knowledge of the matter now
say Mr. Moyse's assertion was misleading because the visa ban has been
reinstated -- although Mr. Deripaska still retains a copy of the visa document.
Yesterday, Mr. Moyse declined a request to repeat for the record his assertion
about the visa's validity. He declined to comment further on the issue.
2 of 3 12/15/16, 12:17 PM
The visa cancellation occurred amid rising tensions between the U.S. and Russia
over economic, crime and corruption issues, as well as concerns in Washington
about attempts by wealthy businessmen from the former Soviet Union to buy
influence in the U.S. capital through lobbyists. In interviews, some current and
former U.S. officials said they are concerned the Bush administration isn't doing
enough to counter efforts by industrialists and powerful companies to enhance
their economic and political clout in the West.
In a recent interview with the Russian business daily Vedomosti, Mr. Deripaska
said allegations of criminal activity against him made by business rivals in U.S.
and United Kingdom courts were false propaganda. Several lawsuits filed by
rivals have been thrown out or settled in recent years.
Write to Mary Jacoby at mary.jacoby@wsj.com and Glenn R. Simpson at

glenn.simpson@wsj.com
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For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.
3 of 3 12/15/16, 12:17 PM
UK banker's link to arms plot | UK news | The Guardian https://www.theguardian.com/uk/2001/dec/09/world.tonythompson
UK banker's link to arms plot

Financier is accused of collaborating with Russian mafia to supply Serb fighters
Tony Thompson, crime correspondent
Saturday 8 December 2001 19.29EST
A director at one of Britain's most prestigious banking consultancies has been named as a
key player in a Russian maa plot to smuggle thousands of missiles and millions of rounds
of ammunition during the Bosnian war.
Mark Garber is a director of the asset management company Fleming Family and Partners.
Until recently, he divided his time between the rm's oces in Russia and its headquarters
in Mayfair.
But documents prepared by Italian investigators name Moscow-born Garber as one of 10

people accused of collaborating with the Russian and Ukrainian maa, former KGB agents,
politicians and a shadowy syndicate to supply arms to Serb ghters during the Balkan
conict.
Garber is the subject of an international arrest warrant and now unable to enter the EU for
fear of being arrested and extradited to Italy. The documents list his current status as
'fugitive', although he continues to work in Fleming's Moscow oce.
The allegations relate to a massive shipment of arms including 30,000 AK47 Kalashnikov
ries, 400 guided missiles, 10,000 anti-tank missiles and 32 million rounds of ammunition
which were seized on a ship, the Jadran Express, in Venice in 1994. Others implicated in the
deal include a Russian-born British citizen, a notorious Belgian criminal and the founder of
the Ukrainian secret police. Five of those named are still at large.
Garber allegedly became involved in the early Nineties, before he joined Fleming, when he
was one of four directors of the Moscow-based Sintez oil company along with a Ukrainian,
Dimitri Streshinskji, and two other Russians, Leonid Lebedev and Alexander Zhukov.
At the beginning of 1992, Streshinskji formed a new company, Global Technologies

International Inc, which was set up to trade in arms that Ukraine had inherited from the
Soviet Army. Customers of Global Technologies were supposedly foreign governments but it
was discovered that Streshinskji had been using forged certicates to smuggle arms to
Bosnia despite a strict embargo.
Following the seizure of the arms on the Jadran Express, investigators discovered a key
payment for the weapons had been made through the accounts of two Jersey-registered
companies, Trade Concepts Ltd and Shellenford Ltd, both of which had been set up by
Sintez. The directors of these were listed as Dimitri Streshinskji and Leonid Lebedev. In
1 of 2 12/14/16, 11:30 AM
UK banker's link to arms plot | UK news | The Guardian https://www.theguardian.com/uk/2001/dec/09/world.tonythompson
1999 Streshinskji was arrested in Germany, in connection with the Jadran Express seizure
and extradited to Italy. He confessed his involvement but named Garber and Zhukov as
co-conspirators, claiming the pair had given permission for the accounts of Sintez's Jersey
companies to be used for the arms transactions. Streshinskji also claimed the weapons were
traded not for prot but in exchange for concessions allowing Sintez to operate in the
Ukraine, thus further implicating Zhukov and Garber.
Zhukov was arrested this year while travelling to Sardinia. He spent six months in an Italian
prison. Although Zhukov was released on bail last month, he is forbidden to leave Turin.
Last week he spoke exclusively to The Observer about the charges against him. 'I am
completely innocent of any involvement in this business,' Zhukov said. He insists he had
little to do with Sintez's other directors after moving to London. Despite this, he has
endured harsh treatment.
'They said I was a dangerous criminal and put me in solitary connement. It was terrible.'
Last month Italian prosecutors travelled to Jersey, where representatives of the companies
provided proof that Zhukov had no power to enable the company accounts to be used.
However, the prosecutors insist that, along with Garber and Lebedev, Zhukov was a
'business partner' in the arms smuggling.
Garber was not available for comment but a spokesperson said he denied any involvement
in arms smuggling. Fleming Family and Partners did not respond to questions. Lebedev was
not available for comment.
Topics
Organised crime
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Blavatnik Background Complete

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1.

Blavatnik is one of the worlds wealthiest men with a fortune estimated at

$19.6 billion by Forbes. He emigrated from Russia to the US as an adult. He

amassed this fortune primarily in the rigged privatizations of Russian natural

maintained deep ties to the Russian government, including Russian intelligence

officials in charge of privatization. For example, according to private investigators

at TNK] continues to take care of Vladimir Rushailo [former Russian Minister of

Kalyuzhny.A Furthermore, Blavatnik has orchestrated violence and murder in

to vastly expand his empire.

2. In addition, he has extensive ties to individuals (akin to mafia associates)

Russian judiciary in order to expand their empires.

4. Public evidence of Blavatniks extralegal use of force has been widely

company] corporate offices in June 2001, acting on the orders of Blavatnik,

5. In a lawsuit related to the above, the complaint stated: Defendants

[including Blavatnik] accomplished their illegal takeoverby sending armed

private militiamen carrying AK-47 machine guns to storm Yugranefts corporate

TNK), threateningly stated, we eliminate those who go against us.D

6. A court affidavit filed in the above situation by an expert on Russia stated,

shareholders of TNK]are among the most wealthy and powerful Russian

oligarchs. TNK is notorious for its aggressive (even by Russian standards!)

takeover tactics. It is understood to largely control the government and courts in

threats against judges or their families, if they render unsatisfactory decisions.

compliant prosecutors based on manufactured evidence.E

7. In a similar situation where Blavatnik and TNK orchestrated the bankruptcy

of a court order to delay it [the fraudulent bankruptcy]. It seemed unreal. John

Chernogorneft [BPs oil field] officesjust another day in Russia!G

8. In another chilling episode Blavatnik and his associates attempted to poison

the BP-appointed CEO of TNK, Robert Dudley, in order to intimidate him.H

9. According to The Economist, even Blavatniks fellow Russian oligarchs are

referred to The Godfather as a manual for life.J In reference to Khans habit of

dont like people who bring guns to meetingsK

Southern District of New York, he was accused of, directly or indirectly

of American Felix Lvov.L Indeed, Deripaska was deemed so dangerous that he

was denied a visa to enter the US due to ties to organized crime.M

seed capital that allowed Blavatnik to participate in the privatization of TNK in

the mid-1990s. Similar to many of Blavatniks other associates, Lebedev is a

dangerous individual. For example, he is accused in an Italian criminal court of

Jadran Express, in Venice. In this venture, Lebedev was collaborating with

money for the TNK privatization.

Norex Wins Reinstatement of

Norex Petroleum Ltd. won reinstatement of a $1 billion lawsuit accusing

judicial proceedings in Russia, he said.

Fatigue-wearing militiamen armed with AK-47 assault rifles stormed Yugranefts

The two billionaires bribed Russian ocials to influence a lawsuit in that

country that sought to reduce Norexs 60 percent stake in Yugraneft, according

BP didnt immediately respond to an e-mail seeking comment on the ruling.

Terms of Service Trademarks Privacy Policy

SUPREME COURT OF THE STATE OF NEW YORK

Plaintiff, NOREX PETROLEUM LIMITED (Norex), by and through its attorneys

Defendants Leonard Blavatnik (Blavatnik); Victor Vekselberg (Vekselberg); Simon Kukes

(BP) (collectively Defendants) alleges as follows:

NATURE OF THE CASE

worth hundreds of millions of dollars.

by corrupting Russian court proceedings and government officials in an attempt to decrease

storm Yugranefts corporate offices and oil field in June 2001.

3. As a result of Defendants actsmany of which were, upon information and

millions of dollars in dividends, and tens of millions of dollars in other misappropriated

PARTIES AND VENUE

4. Plaintiff Norex Petroleum Limited, originally named NowscoR, is a corporation

Its principal and chairman is Alex Rotzang (Rotzang), a Canadian national.

THE OLIGARCH DEFENDANTS

5. Defendant Leonard Blavatnik is a citizen of the United States and maintains a

belief, Vekselberg owns and controls, and is president of, Renova.

9. Upon information and belief, Defendants Blavatnik and Vekselberg co-founded