Solutia Files Complaint Against Exit Lenders

St. Louis, MO, February 6, 2008--Solutia Inc. filed a complaint in the U.S. Bankruptcy Court for the Southern District of New York against the three banks that had agreed to provide $2 billion in exit financing.

Solutia is also seeking a court order to require Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., and Deutsche Bank Securities Inc. to provide the funding.

Solutia also wants to stop the banks from invoking a clause they claim relieves them of their obligation.

Solutia charges the banks with improper conduct and misrepresentations, and says they fraudulently induced Solutia to enter into the initial engagement by promising that the financing was firmly committed.

Both sides want the matter decided by the end of February.

"This is not a 'best efforts' agreement," said Jeffry N. Quinn, chairman, president and CEO of Solutia Inc. "Solutia agreed to pay the banks an enhanced fee in exchange for their firm commitment to fund the full $2 billion exit financing facility -- regardless of the results of the syndication process. We are extremely disappointed by their refusal to meet this commitment and have no choice but to pursue all of our legal remedies."

On October 25, the banks executed a firm commitment to fund a $2 billion exit financing package for Solutia. However, in late the banks notified Solutia that they were refusing to provide the funding, citing a so-called "market MAC" provision in their commitment letter and asserting that there has been a change in the markets since entering into the commitment.

"It is a well-documented fact that the ongoing conditions in the credit markets began in the summer of 2007," said Quinn. "Well before the banks committed to Solutia's exit financing, they stated in public filings and through professional advice to Solutia that the credit markets were in disarray, and that the credit crisis would continue for months to come. Despite their concerns and negative outlook, the banks entered into a firm commitment to provide Solutia with this exit financing. The willingness of these banks to offer committed financing that was not subject to a successful syndication was a major factor in deciding to award them this business."