Monsanto/solutia retirees
At the time of the last update, Oct. ’04, the bankruptcy judge
had ruled in favor of the retirees’ motion which maintained that Solutia could
not make the medical benefit changes it proposed for 2005 without complying
with Section 1114 of the Bankruptcy Code.
The court order subsequently issued said that Solutia shall restore and
maintain the benefits as of January 1, 2004 unless and until Solutia seeks
relief per Section 1114. It did allow
Solutia to change third party administrators or providers of the benefits. As a result the retirees saw no changes in
premiums or benefits for 2005 as of the present time. However, Solutia has appealed the court order in the U.S.
District Court, Southern District of New York. Retirees could be affected if
Solutia prevails in this appeal to the extent allowed by the Pensacola
Settlement and the resulting 2002 Plan.
Lawyers for the Retirees Bankruptcy Committee have filed a
counter motion to dismiss the appeal.
At this time briefs have been filed with the District Court by both
parties but no hearing date has been set.
In addition, the Committee of Unsecured Creditors has filed to join
Solutia in its appeal. Our lawyers have
filed a motion in opposition requesting that the Creditors committee be
excluded because they failed to file their motion within the time allowed.
The motions, briefs and hearings needed to thrash this out
is going to take some time, perhaps months.
There is no way to predict the length of time or the outcome of this
appeal at this time.
One other item of note is the Status Report of the Committee
of Equity Security Holders which was filed with the Bankruptcy Court in
March. The committee performed an
extensive investigation and analysis regarding the circumstances and structure
of the 1997 Solutia spin-off. As a
result, and for the reasons stated in the report, the committee requests the
Bankruptcy Court to declare: the assumption of legacy liabilities by Solutia in
the spin-off to be void and unenforceable, that Solutia has a right of
contribution against Pharmacia and the new Monsanto relating to environmental
contamination caused by same and that Solutia is entitled to an implied
indemnity from Pharmacia and new Monsanto for any claims made relating to
legacy liabilities, including environmental contamination and lawsuits. You can read the full text of this report on
the Spencer Fane
website .
Solutia has received an extension of time from the
Bankruptcy Court for submitting its reorganization plan. The new deadline is July 11, 2005
Additional information will be provided as it becomes
available.