Solutia granted bridge exclusivity extension to April 25 hearing date

By Caroline Salls

Pittsburgh, April 5 - Solutia Inc. obtained a bridge extension to its exclusive periods to file a plan of reorganization and solicit acceptances on the plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company's exclusive plan filing period was extended to the earlier of April 25 or the date the court makes a final ruling on the exclusivity extension. The solicitation period was extended to 60 days after the plan-filing deadline.

On March 31, the company asked the court to extend its exclusive plan filing period to Oct. 10 from April 10 and the solicitation period to Dec. 11, 2006 from June 5.

According to the motion, although the company is confident that its already-filed plan and disclosure statement will be approved, there is a risk that the exclusive periods will have expired if they are not approved, possibly as a result of the failure to resolve an adversary proceeding started on May 27, 2005 by indenture trustee JPMorgan Chase Bank, NA.

If the indenture trustee does prevail on its claims and the court concludes that the trustee has a secured claim of more than $450 million, the current plan will no longer be confirmable and the company will have to return to the bargaining table.

A hearing on the balance of the extension is scheduled for April 25.

Solutia, a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.

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