10 December 2009 16:39 [Source: ICIS news]
HOUSTON (ICIS news)--Bankrupt producer LyondellBasell said on Thursday it was preparing a court response to a creditor committee's push for the right to file a competing reorganisation plan in which Lyondell would be sold for cash to Mumbai-based Reliance Industries.
“We will provide our response to the court at the hearing on Dec. 15,” said company spokesman David Harpole.The bankruptcy court is set to hold a 15 December hearing, in which Lyondell says it will ask for an extension until 6 September for the exclusive right to propose a reorganisation plan.
The creditors, however, want the right to propose a competing plan if the court does not approve Lyondell’s proposal for forcing creditors to settle their lawsuit against secured lenders.
The creditors said the proposed settlement of $300m (€204m) is “woefully inadequate”.
According to the creditors, the debtors’ revised reorganisation plan - expected soon - will lack an appropriate litigation reserve due to the forced, undervalued settlement and revert to a virtual stalemate.
“Without a litigation reserve and with the committee action still pending and with a settlement that the committee believes cannot be approved, the debtors will again be unable to confirm a plan,” the committee wrote.
The committee said Reliance’s recent showing of interest undermines any notion that the debtors are irredeemably hamstrung by the litigation reserve issue.
As such, the committee’s alternative plan would involve a transaction with a strategic investor such as Reliance, should the debtors fail to do so.
($1 = €0.68)
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