Solutia Panel Seeks Mandatory Mediation
Past attempts to resolve a dispute with the bondholders were "sporadic" and not inclusive of all parties, the creditor committee said in a court filing Wednesday.
The creditor committee wants the court to order a mandatory mediation process that would allow the committee and an ad hoc trade committee to attend the mediation proceedings with Solutia, Monsanto and the bondholders.
Constructive talks have been stymied in the past, the creditor committee said, due to the bondholders' apparent unwillingness to include parties other than Monsanto in the negotiations.
At issue is a lawsuit filed by the bondholders' indenture trustee, JP Morgan Chase (JPM), over a change in the status of the bondholders' claims--worth more than $450 million--from secured to unsecured.
The lawsuit went to trial in July 2006, but the U.S. Bankruptcy Court in Manhattan hasn't ruled on the matter.
The creditor committee said that it supports the company's latest request to extend through April 30 its exclusive control over the Chapter 11 case, provided that a mandatory mediation process is ordered.
If the mediation is unsuccessful, the committee said that the court should "immediately" issue a ruling on the lawsuit.
Similarly, Monsanto and the retirees committee, in separate court filings, said that a ruling on the collateralization issue is "essential to progress" in the case, and urged the court to issue its decision. They both backed Solutia's bid to extend its exclusivity, but said that it would be more effective once the bondholder issue is resolved.
Solutia's exclusive right to file a plan without the threat of competing plans was set to expire Tuesday, but Judge Prudence Carter Beatty signed a bridge order extending the company's exclusivity until a hearing is held.
St. Louis-based Solutia filed for Chapter 11 protection on Dec. 17, 2003, listing assets of $2.85 billion and debts of $3.22 billion.