Tronox approved for shortened exclusivity extension; court open to equity committee plan

By Alice Popovici

New York, Sept. 16 - Tronox, Inc. received authorization for an amended exclusivity extension request Wednesday morning, after the U.S. Bankruptcy Court for the Southern District of New York weighed statements from the company and the creditors committee, as well as an objection from the equity holders committee.

At the conclusion of the arguments, the court suggested that the equity holders committee file a competing plan, along with a motion to shorten exclusivity.

Tronox's exclusive plan filing period and solicitation periods will be extended a second time, to Dec. 15 from Sept. 15, and to Feb. 15, 2010 from Nov. 15, respectively. The company had originally requested a plan-filing extension to March 31, 2010 and a solicitation period extension to May 31, 2010, but agreed to shorten the request after consulting with stakeholders.

Patrick Nash, a partner with law firm Kirkland & Ellis, LLP, outlined the company's progress and activity in the last months, which has included entering into a proposed stalking horse purchase agreement with Huntsman Corp. while alternately developing plans for standalone reorganization, as well as dealing with environmental liabilities and an ongoing litigation.

Tronox remains open to "any and all value-maximizing alternatives," Nash told the court. "The only thing we're wedded to, judge, is the outcome that returns the best value."

Creditors committee attorney Brian Hermann, a partner with law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, said the company has made "substantial progress" and the creditors support the exclusivity extension as modified, but want to ensure that Tronox "will pursue with vigor" a standalone reorganization plan.

The only objection to the exclusivity extension request came from the equity holders committee, who also oppose the proposed sale of the company.

When judge Allan Gropper suggested the equity committee file its own plan, equity committee attorney David Crichlow, a partner with law firm Pillsbury Winthrop Shaw Pittman LLP, said that, with the process advancing so quickly, it has been difficult to secure a financial advisor, or secure exit financing for assets that are proposed to be sold.

If the equity committee has a plan, it should bring it to the court's attention "at any time, attached to a motion to shorten exclusivity," Gropper said. He concluded that the equity committee "can take the next three months to come up with what alternatives exist on the market."

Tronox, an Oklahoma City-based producer and marketer of titanium dioxide pigment, filed for bankruptcy on Jan. 12, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-10156.

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