22 January 2009 01:59 [Source: ICIS news]
NEW YORK (ICIS news)--Bankruptcy is not the end of the line. Rather, a company can find itself much stronger from the changes made during the bankruptcy process, taking from the experience of ?xml:namespace>
“Chapter 11 does not have to be a zero-sum game. Value can be created during that time,” said Paul Berra, senior vice president, general counsel and chief administrative officer of Solutia, at a meeting of the American Section of Société de Chimie Industrielle in
In 2003, Solutia filed for bankruptcy due to the polychlorinated biphenyl (PCB) lawsuits left over from when the company was part of Monsanto. The company exited Chapter 11 last year, and is now valued at roughly $2.3bn (€1.8bn), said Berra.
Before bankruptcy, the company was unfocused as it dealt with the burdens of liabilities, toxic tort litigation and increasing material and energy costs, said Berra.
And initially, Solutia was slow to react after filing bankruptcy, he added.
Berra referred to bankruptcy as “an unfamiliar game in a land far away” with “constantly changing players and changing alliances”.
When Jeff Quinn was appointed president and CEO of Solutia in 2004, he established a strategy which included exiting commodity chemicals and non-core businesses, noted Berra.
Solutia shifted from a declining
Before bankruptcy, 65% of company sales were from the
Meanwhile Quinn negotiated a new concessionary bargaining agreement with the unions, while streamlining corporate leadership, said Berra.
“While in bankruptcy, we transformed the company. Restructure yourself before others do it for you,” he advised.
“Think about it before you are forced to. Be lean and adaptive; be candid in your communication; set high standards,” he added.
Even through these tough times, Solutia will continue to look at growth opportunities, whether bolt-on acquisitions or market growing deals, said the general counsel.
Overall, Berra noted that the reorganization process is vital to a strong economy.
“Rehabilitating a troubled company can make a difference in the lives of thousands of people,” he said.
($1 = €0.78)
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