Solutia, banks reach settlement, report says
Bankrupt chemical maker Solutia Inc. has settled its lawsuit against major investment banks that had pulled out of a critical financing deal, Bloomberg News reported today.
However, the Bloomberg report had no details of the settlement. Citing court records, the report said the deal was reached last night.
Town and Country-based Solutia was seeking $2 billion in financing, or else $2.25 billion in damages, from Citigroup Global Markets Inc., Goldman Sachs Credit Partners LP, Deutsche Bank Securities Inc. and its affiliate, Deutsche Bank Trust Company Americas. It filed the lawsuit in U.S. Bankruptcy Court in New York, which hear the case late last week.
The banks in October promised to provide Solutia, but later backed out last month. They cited a clause that allow them to do so if adverse changes occurred in the credit market.
Solutia, which is relying on the financing to complete its hard-won plan of reorganization, argued that the market turmoil began last summer, well before the banks agreed to the deal.
