JPMorgan Chase asks court for authority to investigate Solutia advisors

By Jeff Pines

Washington, July 28 - JP Morgan Chase Bank, concerned that Solutia Inc. may have stripped bondholders' liens, asked the U.S. Bankruptcy Court for the Southern District of New York, for the authority to investigate Solutia's lawyers and advisors.

JP Morgan is the indenture trustee for $150 million in 6.72% notes due Oct. 15, 2037 and $300 million of 7.375% notes due Oct. 15, 2027.

Specifically, JP Morgan wants to look at the records of Rothschild Inc., Winston & Strawn, Kroll Zolfo Cooper and Debevoise & Plimpton, Rothschild's counsel, according to a Tuesday court filing.

JP Morgan obtained a court order on March 5 to investigate Solutia's record, but it described the St. Louis-based chemical company's response as "reluctant at best." It said it is concerned that Solutia has not turned all of the documents it should have.

Solutia's counsel told the bank a number of times that some of the documents it wanted were with Rothschild, Winston & Strawn and Kroll Zolfo Cooper, which is why it asked the court to order them to turn over the documents it wants.

Unless anyone objects by Aug. 3, JP Morgan expects the judge to sign the order by Aug. 6.

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

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