Solutia retirees object to exclusivity termination requests

By Caroline Salls

Pittsburgh, April 27 - Solutia, Inc.'s official retirees committee objected to noteholders' and equityholders' motions to terminate the company's exclusivity to file and solicit votes on a plan of reorganization, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

In response to the official committee of equity holders' exclusivity termination motion, the retirees said an affidavit provided in support of the motion "stops short of providing any expert certainty" that Solutia would generate more value from a plan that included an asset sale.

The retirees said the equity holders did not identify anyone interested in buying any Solutia assets at any price, but argued instead that the equity committee should be allowed to explore the marketing of Solutia's assets.

"In other words, the equity committee's proposal to file a plan that would pay 100% of all claims is premised on three unlikely assumptions," the retiree committee said in the objection.

"The equity committee's motion comprises a speculative double-or-nothing gamble to put equity holders in the money by putting retirees and other holders of unsecured claims at unacceptable risk."

The retirees said the noteholders' termination motion implies that Solutia is making progress toward a revised plan, but not quickly enough for the noteholders.

The retirees committee said it has seen nothing to indicate any unwarranted delays by the company in proposing and seeking consensus on plan terms, or a lack of good faith by any party in the case.

"The noteholders' motion itself belies the equity committee's contentions that Solutia has engaged in only cosmetic plan negotiations and is not acting in good faith," the objection said.

Solutia, a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

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