Solutia equity holders ask court to order company to produce documents

By Jeff Pines

Washington, July 27 - Solutia Inc.'s committee of equity holders wants the U.S. Bankruptcy Court for the Southern District of New York to order the St. Louis-based chemical company to turn over documents related to the company's legacy liabilities.

Monsanto, Solutia's former parent, spun off the company in 1997, but made it assume healthcare, life and disability insurance and pension costs, environmental remediation and compliance, asbestos and general liability claims as well as litigation related to sites allegedly contaminated by Monsanto. Solutia was forced to indemnify Monsanto against any liability. It also saddled Solutia with $1.02 billion of Monsanto debt, the committee said.

The legacy liabilities cost Solutia about $100 million each year. About $60 million of this is in pension costs to about 20,000 retirees who worked for Monsanto and not Solutia.

The committee wants information about the issues and the circumstances involved in the spin-off. It said it needs the information to help determine the company's value and its future operations.

In addition, the committee believes Solutia "may have significant claims" against Monsanto, now Pharmacia Corp.

Some information is publicly available, but that has raised more questions. For example, Monsanto said it wanted to get out of the chemicals business, but "took control of chemical assets that were vital to Solutia's success."

The committee filed its request Monday and said it is asking the court because the company rebuffed several requests for the documents.

An Aug. 19 hearing is scheduled.

Solutia filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

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