Solutia Gets Quick Trial but Financing in Balance

New York, NY, February 11, 2008--A federal judge will hear Solutia's complaint Feb. 21 that its bankruptcy exit lenders have committed fraud and breach of contract by refusing to follow through with their $2 billion in financing obligations.

However Judge Prudence Carter Beatty of the U.S. Bankruptcy Court in Manhattan on Friday refused Solutia's request to force Citigroup, Goldman Sachs, and Deutsche Bank, to pay immediately if Solutia wins the Feb. 21 trial.

Solutia said it needed a speedy trial to ensure it emerges from bankruptcy protection by Feb. 28, which is the expiration date of a $250 million stock-rights offering deal for Solutia's unsecured creditors and noteholders, a key part of the company's reorganization plan.

The company said delays could also damage settlements Solutia has with its former parent company, Monsanto Co., which would fund a major portion of Solutia's environmental contamination liability costs.

Solutia said the lenders deceived it into believing that provisions of the loan, known as market MAC, were merely boilerplate language. But the lenders said they were carefully negotiated terms. The provision allows lenders to back out if financial conditions deteriorate after the signing of the agreement.