Credit Suisse and Deutsche Bank do not plan to fund the proposed closing of the merger between Huntsman and Hexion Specialty Chemicals Inc., in spite of the fact that Huntsman has received written opinion from valuation firm American Appraisal that concluded the merged company would be solvent. Huntsman said that per Credit Suisse’s requirements, it will request an updated solvency opinion from American Appraisal for delivery on the closing date. Hexion was ordered by a court in Delaware to “use its reasonable best efforts” to consummate the merger, and is now in a bind of sorts, since it lacks capital needed, following the banks decision to back out.
On Oct. 23, Huntsman was awarded a temporary injunction against affiliates of Credit Suisse and Deutsche Bank filing any lawsuit “that directly or indirectly alleges that the combination of Hexion and Huntsman would be insolvent or would be in any way incapable of performing its obligations to pay off the notes.”
Huntsman President and CEO Peter R. Huntsman, said of that decision, “This is the third court to rule in Huntsman’s favor. It is time for Apollo and the banks that contracted to close on this transaction to fulfill their responsibilities.”
Huntsman’s jury trial seeking damages against the banks, Hexion owner Apollo Management L.P., and its principals, Leon Black and Joshua Harris, is set to begin Feb. 9, 2009. The company is seeking more than $3 billion.—[email protected]
