Summary of Lyondell examiner report lists no red flags

23 December 2009 00:25  [Source: ICIS news]

HOUSTON (ICIS news)--An executive summary of a report on the LyondellBasell bankruptcy listed no outstanding items but it expressed concern that one board member would be responsible for making some major decisions, according to a report released on Tuesday.

The summary was part of a report written by Jack Williams, an examiner appointed to review some aspects of the Lyondell bankruptcy.

He reviewed topics concerning LyondellBasell's choice of a group that will serve as the backstop and sponsor of an equity-rights offering. The offering will fund the company's reorganisation.

Williams also examined the decision-making process involved in extending or replacing LyondellBasell's bankruptcy financing.

Williams reviewed the decision to include a litigation reserve in Lyondell's proposed reorganisation plan.

Williams noted that board member Stephen Cooper may be solely responsible in deciding who will serve as the sponsor of the rights offering.

Cooper is an independent member of LyondellBasell's supervisory board.

A board of one can be functional and efficient, Williams said in the report. "But a board of one is not a good model of governance, particularly in a complex Chapter 11 reorgansiation."

Competing demands could be placed on Cooper as he navigates Lyondell's reorganisation, Williams said.

Otherwise, Williams found that Cooper was meaningfully informed and was acting in good faith.

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By: Al Greenwood
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