Solutia Seeks Extension to File Reorganization Pla
New York, NY, February 1, 2007--Solutia is seeking an extension through April 30 of its exclusive control over its Chapter 11 case so it can continue pursuing three potential paths to exit bankruptcy protection.
In court papers filed Monday, the company asked for an extension through April 30 of its exclusive right to file a reorganization plan and through June 29 to win creditor support for its plan.
Solutia, which hasn't decided whether it will sell its assets or exit bankruptcy as a standalone company, currently has through February 13 to file its plan.
Companies operating under Chapter 11 must submit a plan to the court outlining how creditors will be paid. Exclusive periods prevent other groups from submitting rival plans and allow a firm to keep control of its bankruptcy case.
A hearing on Solutia's request is slated for February 8 in the U.S. Bankruptcy Court in Manhattan.
Solutia said the extension will give it more time to negotiate a Chapter 11 reorganization plan. The company in November outlined the terms of its new plan, which would allow noteholders to trade their debt for a stake in the reorganized company.
Solutia, which has been in Chapter 11 protection since 2003, is also considering selling the company, and said it has contacted 18 strategic potential purchasers and received indications of interest from six of them.
According to court papers, Solutia is also considering selling certain units and using the sale proceeds to repay creditors.
"Solutia is making great progress towards a successful reorganization," the company said in court papers.
Solutia, however, said it still hasn't been able to get all of its creditor groups and former parent Monsanto to "sit down together in one place and work toward a consensual deal." The company said Monsanto and the ad hoc noteholders committee are negotiating without Solutia or any of the official committees.
The company said it believes the proposal it provided to the noteholders in November is a reasonable compromise, but said it will move forward with the sale options to allow it to exit bankruptcy without a consensus.
