Chemtura diacetyl settlement approved; insurers agree to funding

By Caroline Salls

Pittsburgh, Aug. 26 - Chemtura Corp. received court approval of a $50 million settlement with the firm representing more than 90% of diacetyl claims and reached a related settlement with its insurers, according to an 8-K filed with the Securities and Exchange Commission.

Chemtura said 373 diacetyl claims were filed in its bankruptcy case seeking contribution or indemnity.

According to the 8-K, law firm Humphrey, Farrington & McClain, PC represents 347 of the claimants alleging injury caused to exposure to diacetyl.

Under the settlement with the law firm, Chemtura will pay $50 million to resolve 15 pending lawsuits.

As previously reported, the company's insurers had denied coverage for the diacetyl claims, and Chemtura and its insurers were in litigation regarding insurance coverage for the diacetyl claims.

Under a settlement reached on Aug. 20, the insurers have agreed to fund a portion of the Humphrey Farrington McClain settlement and to provide insurance coverage for other pending and future diacetyl claims.

The insurance settlement is still subject to bankruptcy court approval.

Chemtura is a Middlebury, Conn.-based manufacturer and seller of specialty chemicals and polymer products that filed for bankruptcy on March 18, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-11233.

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