Solutia equity committee fights to retain official status

By Jeff Pines

Washington, April 21 - Solutia Inc.'s official equity committee entered the fray to retain its official status. It filed a motion with the bankruptcy court Tuesday opposing the creditors' committee's effort to lift the equity committee's official status.

Unlike the creditors who believe the St. Louis-based chemical company is hopelessly insolvent, the equity holders and the U.S. trustee believe Solutia does have value.

Bankruptcy law requires the company to have some value to merit the appointment of an official equity holders' committee.

The U.S. trustee filed an objection to the creditors' committee's move on April 15.

An ad hoc committee of equity holders petitioned the trustee to form an official committee. The ad hoc committee was composed of Smith Management LLC, Couchman Partners, LLC and RCG Corpathia Master Fund, Ltd.

The members of the official committee are: Jonathan Couchman of Couchman Partners, LP; Gregory Shrock of Mellon HBV Alternative Strategies LLC; Jeffrey Watkins of Prescott Group Capital Management LLC; Elizabeth Pierce of Smith Management LLC; and Richard Kuersteiner of Franklin Advisors, Inc.

An April 23 hearing is scheduled.

Solutia filed for Chapter 11 on Dec. 17, 2003. Its Chapter 11 case number is 03-17948.

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