Lyondell creditors object to prolonged exclusivity extension request

By Caroline Salls

Pittsburgh, Dec. 8 - Lyondell Chemical Co.'s official committee of unsecured creditors objected to the company's proposed exclusivity extension, arguing that the requested extension is too long, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said Lyondell has requested an extension to the furthest date allowable by law.

"Granting the debtors a monopoly over the right to prosecute a plan would be tantamount to granting the [committee lawsuit] financing party defendants a monopoly over the plan process, given the level of control the financing party defendants have exerted over reorganization options to date," the committee said in the objection.

If an exclusivity extension is granted, the committee said it should be granted the right to file an alternative plan if a proposed settlement of the committee's claims against Lyondell's lenders is not approved.

The committee said the company's proposed settlement "is both procedurally inaccurate, and, on a substantive basis, woefully inadequate."

The committee said the company's plan, which is expected to be revised soon, will lack an appropriate litigation reserve, with "the litigation reserve concept having been jettisoned, as the committee had long predicted, in favor of a forced, undervalued settlement."

A hearing is scheduled for Dec. 15.

Lyondell is a U.S. subsidiary of LyondellBasell Industries AF SCA, a Netherlands-based polymer, petrochemicals and fuels company. LyondellBasell's U.S. operations and one of its European holding companies filed for bankruptcy on Jan. 6, 2009. The Chapter 11 case number is 09-10023.

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