Solutia asks court to strike equity committee status report; discovery request disputed

By Caroline Salls

Pittsburgh, March 14 - Solutia Inc. asked the U.S. Bankruptcy Court for the Southern District of New York to strike a status report filed by the company's official committee of equity security holders, calling the report "an advocacy piece that appears to be an unabashed and irresponsible attempt to mislead the court and, perhaps, other constituents in these Chapter 11 cases."

According to the motion filed Monday, the committee said the status report was intended to apprise the court of the background, substance and significant impact on these cases of the outcome of an adversary proceeding brought by the committee against Pharmacia Corp. and Monsanto Co.

Instead, Solutia said the committee improperly used the report to file a premature objection to the company's plan of reorganization and to request discovery from Pharmacia and Monsanto.

In addition, Monsanto, Pharmacia and Solutia's official committee of unsecured creditors requested a protective order halting the discovery request.

According to that motion, the discovery requests seek sweeping categories of information relating to Solutia's proposed plan of reorganization and seek information relating to the 1997 spin-off transaction under which Solutia was spun off from the original Monsanto Co., now known as Pharmacia, and the liabilities Solutia assumed as part of the spin-off.

The companies and the committee said the equity committee already has had access to informal discovery relating to the plan and the 1997 spin-off, and that they have already produced thousands of documents and given the equity committee access to environmental sites, as well as retained experts and other information.

The companies and the committee said the discovery requests are procedurally defective because there is no contested matter before the court to trigger the discovery provisions of the bankruptcy code.

In addition, the motion said there is no rational basis to allow discovery to proceed on a plan that has not yet been approved for solicitation and objected to by parties in interest.

The motion also said Solutia's estates and the non-debtor plan proponents should not be required to incur the expense of submitting to discovery now, only to have to submit to duplicative discovery several months from now after the plan is accepted and other parties file objections to the plan.

"The equity committee's insistence on discovery now represents nothing more than an effort to be disruptive of the confirmation process in the hopes of extracting value for a constituency that is out of the money," the motion said.

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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