Fraud claims can proceed over Basell’s acquisition of Lyondell
A New York state bankruptcy judge will allow fraud claims to be brought against the privately held parent of L...
July 27, 2009 by Canadian Plastics
A New York state bankruptcy judge will allow fraud claims to be brought against the privately held parent of LyondellBasell, Access Industries.
The official committee of unsecured creditors will now press to recover some US$22 billion that they claim was lost as a result of the mishandling of Basell’s acquisition of Lyondell Chemical in 2007.
According to the legal action, the highly leveraged purchase put the merged company in a position in which any negative market movements would result in the firm’s inability to service its debt. LyondellBasell’s filing for Chapter 11 was therefore “entirely foreseeable and [a] direct consequence of the merger”, the creditors claim.
According to news reports, the bankruptcy judge, Robert Gerber, has stipulated that the case must be expedited swiftly so as not to interfere with LyondellBasell’s planned exit from Chapter 11 by the end of the year.