 |
|
Solutia Prepares to Emerge From Bankruptcy Solutia Inc. in St. Louis announced yesterday that it has secured the support of all of the major constituents in its Chapter 11 cases for a consensual plan of reorganization. The company originally filed its plan of reorganization and disclosure statement in early 2006. The reorganization was undertaken to provide the company with relief from the legacy liabilities it was required to assume when it spun off from Pharmacia (formerly known as Monsanto) in 1997. These legacy liabilities include retiree medical, life insurance and disability benefits for individuals who retired or became disabled prior to the Solutia spinoff. Also included are environmental remediation costs related to activities of the chemicals business of Pharmacia that occurred prior to the spinoff and toxic tort litigation costs relating to chemical exposure associated with the activities of Pharmacia that occurred prior to the spinoff. "I am extremely pleased to announce today that we have reached a comprehensive settlement with all of the major constituents in our bankruptcy case that will form the basis for a revised consensual plan of reorganization that will be filed within the next few days," says Jeffry N. Quinn, chairperson, president and chief executive officer of Solutia. "The revised plan will position Solutia to emerge from bankruptcy by the end of this year as a financially healthy organization well-positioned to create significant value for its stakeholders." According to information from the company, the revised plan will provide for $250 million of new investment in the reorganized business through a backstopped rights offering to certain creditors, as well as a reallocation of the legacy liabilities that Solutia assumed when it was spun off. It also will provide for a resolution of all the litigation between the settling parties. Under the revised plan, the reorganized company's board of directors will be comprised of nine members, including: Quinn; J. Patrick Mulcahy, a current director of Solutia; one director designated by each of Monsanto, the general unsecured creditors and the noteholders; and four directors designated by a five-person search committee consisting of Quinn, two representatives from the noteholders and one representative each from the general unsecured creditors and the ad hoc trade creditors. Solutia has engaged the services of Spencer Stuart, a global search firm, to begin the process of helping identify and recommend highly qualified board candidates. Solutia will update its disclosure statement and plan of reorganization to reflect the terms of the settlement, and will soon file these documents with the U.S. Bankruptcy Court for the Southern District of New York. An October 10, 2007, court date has been set seeking approval of the disclosure statement. Once approved, the disclosure statement will be sent to Solutia's creditors and equity interest holders for voting purposes. Following the voting process, the court will hold a hearing to approve or "confirm" the plan. CLICK HERE to read the full announcement from Solutia. CLICK HERE to read Solutia's proposal to emerge from bankruptcy.
Need more info and analysis about the issues? |
|
|
