Legal News

Huntsman Settles Mid-Trial with Credit Suisse, Deutsche Bank

By Ashby Jones

Just a quick item to get you up to speed on, LBers. A week into a Texas state court trial, Huntsman Corp. has settled its lawsuit against a pair of European banks for $1.7 billion in cash and financing. According to our friend and private-equity reporter Peter Lattman, the settlement represents a win in the chemicals maker’s fight to recover damages over the busted buyout by private-equity firm Apollo Management LP.

The settlement breaks down like this: Credit Suisse Group and Deutsche Bank will pay Huntsman $632 million in cash. The banks will also provide Huntsman with $1.1 billion in loans — no small thing at a time when loans are hard to come by.

Huntsman had sought $4.65 billion in damages, accusing the investment banks of plotting to scuttle an acquisition by Hexion Specialty Chemicals, a company owned by Apollo. The banks had said they didn’t provide financing for the deal because they didn’t think a combined Hexion-Huntsman would be solvent, a requirement under the financing commitment letter.

Apollo’s Hexion had agreed in July 2007 to buy Huntsman in a deal 100% funded by $15.4 billion of newly issued debt. It collapsed about a year later after Apollo asked a Delaware court to rescind it, also arguing that a combined company would be insolvent.

Full post as published by Law Blog - WSJ.com on June 23, 2009 (boomark / email).