A Russian court yesterday rejected the Yukos oil company’s appeal to suspend government efforts to collect $3.4 billion in back taxes – a massive bill that has put Russia’s largest oil producer on the verge of ruin.

The Moscow Arbitration Court denied a petition from Yukos, Russian news agencies said. The company had asked the court to suspend bailiffs’ steps to collect the 2000 debt until appeals against the seizure of core subsidiaries have been heard.

While Yukos has paid some $750 million of its back taxes bill, the company has frequently warned that with its bank accounts frozen and a stop order in place on selling assets, bankruptcy and production cuts could be just around the corner. Authorities, meanwhile, have been investigating Yukos tax records for the following years, and observers say the total debt could grow to $10 billion.

In an interview with the Financial Times published Monday, Yukos’s chief financial officer, Bruce Misamore, warned that the company lacked the cash to pay its bills and could face bankruptcy.

“All the cash is being swept up. We can’t survive,” Mr. Misamore was quoted as saying.

In what became a pattern of good news followed by bad for Yukos recently, the Moscow Arbitration Court handed the company its first major victory August 6, ruling that bailiffs had acted illegally by seizing a key Yukos subsidiary, Yuganskneftegaz. However, the bailiffs imposed a fresh seizure the same day, using different arguments.

Yuganskneftegaz, which produces some 60% of the company’s oil, is being evaluated for possible sale by the investment bank Dresdner Kleinwort Wasserstein. The appointment of a major Western bank calmed fears that the unit would be sold at a fire-sale price to Kremlin-friendly hands, but appeared to show that bailiffs were intent on pushing ahead with the sale.

A freeze on Tomskneft, which produces the oil Yukos exports to China, was upheld a week ago in a decision that Yukos is also protesting. A hearing on the seizure of another subsidiary, Samaraneftegaz, will be heard September 2.

The arbitration court handed Yukos a second defeat later yesterday, rejecting its appeal of a decision by bailiffs not to use the company’s 30% stake in the Sibneft oil company as collateral for the tax bill. Yukos acquired the stake as part of a failed merger last year.

The complex web of legal cases against Yukos and its jailed founder, Mikhail Khodorkovsky, are seen by observers as an attempt to quash Mr. Khodorkovsky’s political clout. The Kremlin has cast the affair as a crackdown on shady tax schemes and corruption. Yukos denies those allegations.

Mr. Khodorkovsky, arrested in October, is on trial along with business partner Platon Lebedev on charges including fraud and tax evasion. The prosecution has nearly finished presenting the evidence contained in the voluminous case files, and Russian news agencies said the court will begin hearing prosecution witnesses tomorrow.