Chemtura to Exit Bankruptcy


Chemtura last week said it plans to file a Chapter 11 reorganization plan in mid-June, a key step in exiting bankruptcy, and has opened a technical center in Nanjing, China.

The business is working with various stakeholder committees to reach a consensual reorganization plan. Our intent is to emerge from Chapter 11 as quickly and efficiently as possible. We believe that filing a plan of reorganization with the support of all of our major constituencies is the best way to accomplish this goal, Chief Executive Officer Craig Rogerson stated May 25. Chemtura intends to file a plan of reorganization by June 17, and accordingly intends to file a motion to extend its exclusive rights to file a Chapter 11 plan, and solicit votes thereon, in order to facilitate the Chapter 11 process.

The reorganization plan would continue all its worldwide operations and subsidiaries. Middlebury, Conn.-headquartered Chemtura also expects the plan will pay creditors in cash or common stock in a reorganized, publicly traded company. The plan would also specify treatment for funded debt obligations, trade claims and litigation claims. While there can be no guarantee regarding the value or type of recovery available to any class of creditors or interest holders under the plan, it is anticipated that creditors will be paid at or near the full value of their claims and there may well be recovery available for holders of Chemturas common stock, the firm noted, adding that it is discussing the plans specifics with its stakeholders.

For Chemtura to emerge from Chapter 11, the bankruptcy court must confirm a reorganization plan. The plan is expected to include closing conditions that will need to be satisfied before emergence, the company stated.

Chemtura and 26 of its U.S. affiliates filed for Chapter 11 bankruptcy protection in March 2009, citing significant decreases in liquidity and cash flow due to a market decline in order volumes in the preceding months because of the global economic recession. The company recorded an operating loss of $737 million for 2008s fourth quarter and $929 million for the year 2008. It posted sales of $2.5 billion in 2009.

In late 2008, the manufacturer began trimming its workforce by about 500 professional and administrative staff worldwide, or about 10 percent of its workforce. In January 2009, it outlined plans to realign two business groups, Performance Products and Engineered Products, with its petroleum additives, lubricants and greases reporting under the former.

By press time, Chemtura did not respond to Lube Reports requests for comment.

On May 24 Chemtura announced the opening of a new Application Development Center in the Nanjing Economic and Technological Development Zone. The center consists of four laboratories serving as a technical center for Chemtura businesses in the Asia-Pacific region, including its petroleum additives business.

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