14 September 2009 19:58 [Source: ICIS news]
HOUSTON (ICIS news)--Lyondell Chemical will once again become a public company with shares traded on the New York Stock Exchange under its plan to emerge from bankruptcy protection, the company said on Monday.
The reorganisation plan calls for a public limited liability company that would be organised under the laws of the Netherlands.
The new company would then issue stock, said spokesman David Harpole.
Secured creditors would receive the shares, Harpole said.
In addition, there would be a rights offering to provide additional liquidity to the company after it emerges from bankruptcy protection, he said.
Shares would be traded on the New York Stock Exchange, he said. The company has yet to determine the number of shares issued or the stock evaluation.
For the most part, unsecured creditors would rely on any proceeds of a lawsuit that they filed against some of Lyondell's officers and lenders. In that lawsuit, the creditors alleged that key players overlooked clear warnings signs that the merger would fail.
In general, companies often rely on stock offerings and litigation to successfully emerge from bankruptcy protection and repay creditors, said Jay Westbrook, a professor of law at the University of Texas Law School.
Westbrook said that while he had not read the reorganisation plan, Lyondell's bankruptcy had been contentious, which could lead to creditors filing objections to the plan.
Lyondell has a 15 October deadline to get court approval for the plan, according to the terms of its debtor-in-possession (DIP) financing.
The plan needs to be confirmed by 15 December, although the company could receive an extension, according to the DIP terms.
LyondellBasell chief executive Jim Gallogly said he expected the company to to be ready to emerge from bankruptcy by year end.
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