LyondellBasell unit gets demand letters from shareholder affiliates

By Caroline Salls

Pittsburgh, Jan. 19 - LyondellBasell Industries NV has asked affiliates of shareholder Access Industries to withdraw demand letters it sent in December to its LyondellBasell Industries Holdings subsidiary, but the Access affiliates refused to withdraw the demands, according to an 8-K filed with the Securities and Exchange Commission.

Specifically, Access affiliates Nell Ltd. and BI Sarl have demanded that LyondellBasell Industries Holdings indemnify them and their shareholders, members, affiliates, officers, directors, employees and other related parties for all losses, including attorney's fees and expenses, arising out of a pending lawsuit.

In the lawsuit, the plaintiffs are looking to recover damages from numerous parties, including Nell, Access and its affiliates.

The damages sought from Nell, Access and its affiliates include the return of all amounts earned by them in connection with their acquisition of shares of Lyondell Chemical Co. before its acquisition by Basell AF SCA in December 2007, distributions by Basell AF to its shareholders before it acquired Lyondell Chemical, as well as management and transaction fees and expenses.

According to the 8-K, Nell and BI have also demanded that LyondellBasell Industries Holdings pay $50 million in management fees for 2009 and 2010 and that it pay unspecified amounts related to advice given in connection with financing and other strategic transactions.

Nell and BI claim that LyondellBasell Industries' responsibility for indemnity and the demand fees and expenses arise out of a December 2007 management agreement between Nell and Basell AF.

Nell and BI claim that LyondellBasell Industries, as a former Basell AF subsidiary, is jointly liable for Basell AF's obligations under the agreement, even though LyondellBasell Industries was not a party to the agreement and Basell AF's debt was discharged in the LyondellBasell bankruptcy proceedings.

The company said it does not believe that the management agreement is in effect or that any LyondellBasell affiliated entity owes anything under the management agreement.

LyondellBasell is a Netherlands-based plastics, chemical and refining company.

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