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By stan_sipple

Follow up: Solutia sues lenders who backed out from financing its Chapter 11 exit plan. St Louis Business Journal.
Solutia Inc. on Wednesday sued the lead arrangers of the company's exit financing package saying the three banks have refused to fund a $2 billion bankruptcy exit financing package for Solutia they had previously committed to. Solutia filed suit in the U.S. Bankruptcy Court for the Southern District of New York against Citigroup Global Markets Inc., Goldman Sachs Credit Partners LP and Deutsche Bank Securities Inc. seeking a court order requiring the banks to meet their commitment to fund Solutia's exit from bankruptcy. In October 2007, Solutia Inc. received a fully underwritten commitment for $2 billion of exit financing, which would be used to pay certain creditors upon Solutia's emergence from Chapter 11 bankruptcy pursuant to the plan of reorganization, and for the ongoing operations of the company after emergence. The banks told Solutia on Jan. 22 that due to continuing conditions in the credit markets, they had not been able to complete the exit financing they committed to in October 2007. Solutia filed for Chapter 11 bankruptcy protection in December 2003.

Full post as published by Showmeblawgs on February 07, 2008 (boomark / email).