ST. LOUIS (Feb. 8, 2008) — Solutia Inc. has filed a complaint against three banks that it said have failed to follow through on a commitment to pay a $2 billion Chapter 11 exit financing package for Solutia.
Solutia named Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P. and Deutsche Bank Securities Inc. in the complaint filed in the U.S. Bankruptcy Court for the Southern District of New York.
The complaint said that in October, the three named banks made a firm commitment to provide a $2 billion package to Solutia, designed to aid Solutia in exiting Chapter 11 protection. The next month, the bankruptcy court approved the package and confirmed Solutia´s reorganization plan, according to the complaint.
In January, Solutia said, the banks withdrew their funding package, citing a "market MAC" provision in their commitment letter and claiming there has been a change in the markets since entering the agreement.
Solutia said the banks "fraudulently induced Solutia to enter into the initial engagement by promising that the financing was firmly committed."
Jeffry Quinn, chairman, president and CEO of Solutia, said the firm is ready to emerge from Chapter 11 after repositioning its company and confirming a plan of reorganization.
"We now look to the banks to meet their commitment," he said.