US judge to hear challenge of Lyondell settlement - report

11 December 2009 23:43  [Source: ICIS news]

HOUSTON (ICIS news)--A US Bankruptcy Court judge said he will hear arguments next year from Lyondell Chemical’s unsecured creditors regarding the validity of a proposed $300m (€204m) settlement aimed at helping the company emerge from bankruptcy, Reuters reported on Friday.

Judge Robert Gerber of the Southern District of New York US Bankruptcy Court said he would hold a hearing around February regarding whether the proposed settlement was “collusive,” according to Reuters.

LyondellBasell, Lyondell Chemical's parent company, planned to propose a $300m cash payment to partially settle a lawsuit filed by unsecured creditors, an offer that would remove significant hurdles in the company's emergence from bankruptcy protection.

The creditors earlier said the proposed settlement was “woefully inadequate” and that the debtors’ revised reorganisation plan - expected soon - would lack an appropriate litigation reserve due to the forced, undervalued settlement and revert to a virtual stalemate.

The creditors wanted the right to push for a competing reorganisation plan in which Lyondell would be sold for cash to Mumbai-based Reliance Industries.

The creditors had sued the lenders and advisors in the deal that lead to the merger of Lyondell and Basell, saying the merged company could never recover from its debt.

($1 = €0.68)

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By: Brian Ford
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