BREAKING NEWS: Huntsman reaches mid-trial settlement with European bankers
CONROE, Texas Ã¯Â¿Â½ Shortly after this morning's trial recess, attorneys for the Huntsman Corp. and European bankers announced the parties had reached a settlement.
Huntsman was involved in a legal battle with Credit Suisse and Deutsche Bank after the banks backed out of a decision to finance a $6.5 billion buyout of Huntsman by Hexion Specialty Chemicals.
The case went to trial last week Montgomery County, where Huntsman has its headquarters, in the Ninth District Court of Judge Fred Edwards.
The Hexion deal with Huntsman was forged in 2007 and set to close in October 2008. But in June of last year, Credit Suisse and Deutsche Bank put a halt to the transaction, expressing doubts about Huntsman's solvency after the company hit a slump in the fourth quarter of '08.
Huntsman sued Apollo Management, Hexion's parent company, in Montgomery County, seeking more than $3 billion in damages.
Hexion sued Huntsman in Delaware to escape the agreement, claiming the company could not provide a certificate of solvency to bankers at closing.
Shortly after that, Huntsman sued Credit Suisse and Deutsche Bank in Montgomery County.
The cases were consolidated by Judge Edwards, who ruled that the banks had no right to sue Huntsman.
The banks petitioned the Ninth District in Beaumont to reverse Edwards, arguing that he should let a New York court address the issue of solvency.
Appellate justices said the solvency questioned could not be answered by the court, and found that Hexion may have been behind the lenders' decision to back out of the deal.
According to trial testimony, much of the controversy over the financial numbers was based on handshake deals and verbal assurances.
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