04 March 2009 19:15 [Source: ICIS news]
HOUSTON (ICIS news)--US industrial gas supplier Air Products would not comment on Wednesday regarding a $27.6m (€21.8bn) court dispute with bankrupt Lyondell Chemical stemming from a previous dinitrotoluene sales case.
The dispute appears as an adversary case in Lyondell's US bankruptcy filing, which covers the ?xml:namespace>
Air Products was questioning whether LyondellBasell's solvent French subsidiary, Lyondell Chimie, was liable for a pre-bankruptcy settlement between Air Products and Lyondell Chemical. That settlement ended lawsuits that both companies filed over the dinitrotoluene sales agreement, Lyondell Chemical said.
Lyondell quit buying the dinitrotoluene after it shut down some units at a plant in
Under the 1 June 2007, settlement, Lyondell Chemical agreed to pay Air Products $49m, the company said. In addition, Lyondell would pay Air Products up to $10m/year from 2008-2011.
Lyondell applied credits to the settlement from another sales agreement between its French subsidiary, Lyondell Chimie, and Air Products. The credits were deducted from the annual payments to Air Products.
Air Products maintained that Lyondell still owes it up to $27.64m from the settlement. Air Products maintained at least some of that amount can be collected from Lyondell Chimie, as the French subsidiary was a party in the 2007 settlement.
To collect on the money due, Air Products successfully obtained a $27.6m garnishment order in
However, Lyondell Chimie and its parents have only €532,000 in bank accounts, nowhere near enough money to satisfy the garnishment order, Lyondell Chemical said. It added the order could push Lyondell Chimie and its French parents into insolvency.
Such a development could threaten Lyondell Chemical’s ability to emerge from bankruptcy, the company said.
Lyondell also maintained that its French subsidiary was not a party in the original dinitrotoluene sales lawsuit by Air Products.
Air Products cannot pursue its claims through Lyondell Chimie and instead must seek the money only from Lyondell Chemical, the company said.
In other news, the bankruptcy court approved the terms of Lyondell's $8bn bankruptcy financing package.
Such financing, known as debtor-in-possession (DIP) financing, allows bankrupt companies to fund their day-to-day operations while they reorganise.($1 = €0.79)
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