Pharmacia, Monsanto object to Solutia equity committee's request to investigate them

By Jeff Pines

Washington, Aug. 11 - Pharmacia Corp. and Monsanto Co. objected to a request from Solutia Inc.'s official equity security holders' committee for expanded power to investigate them.

The two companies filed their objection Wednesday afternoon with the U.S. Bankruptcy Court for the Southern District of New York.

The equity committee is seeking documents pertaining to Monsanto's spin-off of Solutia in 1997 under which Monsanto required the company to accept legacy liabilities for pension funds, environmental remediation costs and retiree benefits. The old Monsanto company is now Pharmacia and the new Monsanto was once the agricultural products division of the company.

Both companies objected because neither has filed a claim in this case.

The equity committee is concerned that the old Monsanto made fraudulent transfers to St. Louis-based Solutia but Pharmacia and Monsanto said the expanded powers the committee is seeking are available only to creditors and not shareholders.

Solutia and the official committee of retirees already have lawsuits going against the two companies and approving the equity committee's request could lead to another lawsuit that would duplicate those already under way, the companies said.

Another reason for denying the equity committee's request is the length of time between the spin-off and Solutia filing for Chapter 11, Pharmacia and Monsanto said. According to them, the bankruptcy code and state laws bar giving the committee the power to investigate the two companies because of the more than six years that have elapsed since the spin-off.

If the court does approve the committee's request, Pharmacia and Monsanto would have to respond to more than 150 document requests dating back to 1960, the two companies might have to produce "potentially millions of documents relating to all aspects of Pharmacia and Monsanto's $3 billion global businesses," the companies said.

Solutia filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.