EPA objects to Solutia creditors' seeking permission to intervene

By Jeff Pines

Washington, March 1 - The Environmental Protection Agency objected to a motion by Solutia Inc.'s official committee of unsecured creditors seeking permission to intervene in Solutia's numerous court cases.

The assistant U.S. attorney representing the EPA argued in a March 1 motion that the request should be denied because Solutia is already adequately representing the committee's interests. That the company has filed a motion asking the judge to abstain shows it is adequately representing the committee members, he argued.

"Moreover, the committee's motion is simply an attempt to thwart the government's police and regulatory power directed at the prevention or amelioration of ongoing or future harm to the public health and safety," the assistant U.S. attorney said.

In a Feb. 24 filing with the U.S. Bankruptcy Court for the Southern District of New York, the creditors committee said it is concerned the litigation will eat away at the company's assets and its members' ability to recover anything.

The committee believes that the cases, including those relating to environmental remediation, should be subject to automatic delays under the bankruptcy code.

In a recent case filed in the U.S. District Court for the Northern District of Alabama, the St. Louis-based company asked the court to abstain from ruling on a motion that the bankruptcy code does not exempt Solutia from obligations to perform work required under a consent decree.

The committee said it does not want to intervene in any cases in which the unsecured creditors' interests are not at immediate and direct risk, or those that have already been stayed.

The government argued that the Solutia proceeding in northern Alabama is exempt from the automatic stay.

The company said it made the filing in December to obtain relief from its legacy liabilities, which include litigation and settlement costs, environmental remediation and Monsanto retiree healthcare obligations that Solutia was required to assume when it was spun off from the former Monsanto Co., now Pfizer's Pharmacia subsidiary.

Solutia's Chapter 11 case number is 03-17949.

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