Attached files
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| EX-2.1 - LANXESS Solutions US Inc. | v201055_ex2-1.htm |
| EX-2.2 - LANXESS Solutions US Inc. | v201055_ex2-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): November 3, 2010
Chemtura
Corporation
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction
of
incorporation)
|
1-15339
(Commission
file number)
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52-2183153
(IRS
employer identification
number)
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||
|
1818
Market Street, Suite 3700, Philadelphia, Pennsylvania
199
Benson Road, Middlebury, Connecticut
(Address
of principal executive offices)
|
19103
06749
(Zip
Code)
|
|||
(203)
573-2000
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.03
Bankruptcy or Receivership.
As previously disclosed, on
March 18, 2009, Chemtura Corporation (“Chemtura”) and 26 of its U.S.
subsidiaries (collectively, with Chemtura, the “U.S. Debtors”) filed voluntary
petitions for reorganization, and on August 8, 2010, Chemtura Canada Co./Cie
(“Chemtura Canada,” and, collectively with the Domestic Debtors, the “Debtors”)
filed a voluntary petition for reorganization (the “Chapter 11 cases”) under
Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S.
Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”). On August 11, 2010, Chemtura Canada commenced ancillary
recognition proceedings under Part IV of the Companies’ Creditors Arrangement
Act (the “CCAA”) in the Ontario Superior Court of Justice, Ontario, Canada (the
“Canadian Court”). On August 5, 2010, the Debtors filed with the
Bankruptcy Court the solicitation version of their joint plan of reorganization
(as it may be further amended, supplemented or modified, the “Plan”) and
accompanying disclosure statement (as it may be further amended, supplemented or
modified, the “Disclosure Statement”). The Bankruptcy Court approved the
Disclosure Statement on August 5, 2010. On September 2,
2010, Chemtura filed a supplement to the Plan with the Bankruptcy Court, as
contemplated by the Plan (the “Plan Supplement”).
The Bankruptcy Court hearing to
consider confirmation of the Plan began on September 16, 2010 and concluded on
September 22, 2010. On October 21, the Bankruptcy Court entered a
bench decision approving confirmation of the Plan. On November 3, 2010 (the
“Confirmation Date”), the Bankruptcy Court entered a written order confirming
the Plan (the “Confirmation Order”). The Confirmation Order is
attached hereto as Exhibit 2.1 and incorporated herein by
reference. The Confirmation Order provides a waiver of the ordinary
stay of effectiveness under applicable bankruptcy law, such that the
Confirmation Order will become effective at 12:00 noon on Monday, November 8,
2010 unless otherwise stayed by separate court order. A request for
recognition of the Confirmation Order was filed in the Canadian Court in order
to fulfill a condition to effectiveness of the Plan so that Chemtura Canada can
emerge from its proceedings at the same time as the U.S.
Debtors. That request was granted by order entered on November 3,
2010.
The
following is a summary of the material features of the Plan, as confirmed by the
Bankruptcy Court. The following summary highlights only certain provisions of
the Plan and is not a complete description of that document. Therefore, this
summary is qualified in its entirety by reference to the Plan, attached hereto
as Exhibit 2.2 and incorporated herein by reference. Capitalized terms used
herein but not defined have the meanings assigned in the Plan.
Discharge
of Prepetition Claims
Among other things (subject to certain
limited exceptions and except as otherwise provided in the Plan or the
Confirmation Order), the Confirmation Order approving the Plan will discharge
the Debtors from any debt arising before the date the Plan goes effective (the
“Effective Date”), terminate all of the rights and interests of pre-petition
equity security holders (including the cancellation of all old common stock),
and substitute the obligations set forth in the Plan for those pre-petition
Claims and Interests.
Distributions
under the Plan
Distributions to creditors under the
Plan generally will include a combination of new common stock, cash,
reinstatement or such other treatment as agreed between the Debtors and the
applicable creditor. Distributions under the Plan to holders of Chemtura common
stock will include shares of new common stock and may include cash.
Holders of claims in the following
classes are unimpaired and will receive a 100% recovery in cash (except in
certain cases if reinstated or as may receive such other treatment as agreed
between the Debtors and the applicable creditor): Class 1 Prepetition Secured
Lender Claims; Class 2 Lien Claims; Class 3 Other Priority Claims; and Class 4c
General Unsecured Claims against Chemtura Canada.
2
With respect to holders of the
following claims, Class 5 Prepetition Unsecured Lender Claims, Class 7 2009
Notes Claims, Class 6 2016 Notes Claims, Class 8 2026 Notes Claims and Class 4a
and 4b General Unsecured Claims against Chemtura and the other Debtors
(collectively, the “Participating Creditor Classes”), a pool will be established
from which distributions will be made to Participating Creditor Classes (the
“Unsecured Distribution Pool”). The Unsecured Distribution Pool will be funded
with (a) available distributable cash following funding of a reserve to pay
certain Diacetyl Claims, certain Environmental Claims and payment to all holders
of Class 9 Allowed Unsecured Convenience Claims and (b) the new common stock,
subject to dilution for the Incentive Plans.
The Unsecured Distribution Pool will be
used to fund (a) the payments pursuant to the Plan of all Allowed Claims in the
Participating Creditor Classes and (b) a reserve created by the Debtors to hold
a contribution of cash and new common stock that would have been distributed to
the holders of all Disputed Unsecured Claims as if such Disputed Unsecured
Claims had been Allowed Claims on the Effective Date, for the benefit of holders
of subsequently Allowed Claims. Any value available in the Unsecured
Distribution Pool following the payment, in full, of all Allowed Claims and the
funding of the reserves for all such Disputed Claims will be shared among
holders of Interests in Chemtura (including the old common stock) on a pro rata
basis.
Holders of Class 10 Diacetyl Claims
will receive cash in varying amounts in full and final satisfaction of such
claims.
Holders of Class 11 Environmental
Claims will either receive cash in varying amounts in full and final
satisfaction of such claims or such claims will be reinstated.
Holders of Class 9 Unsecured
Convenience Claims will receive a 100% recovery in cash up to $50,000
each.
Exit
Financing
The Plan provides that, on the
Effective Date, Chemtura shall enter into a senior secured revolver facility up
to a principal amount of $275 million. Additionally, Chemtura will
receive from escrow the proceeds from (i) the $455 million in aggregate
principal amount of 7.875% senior notes due 2018 (the “Senior Notes”) issued on
August 27, 2010 and (ii) the $295 million in aggregate principal amount, funded
at 99% of such principal amount, of loans (the “Term Loan”) under the Senior
Secured Term Facility Credit Agreement, entered into on August 27, 2010, and
amended on September 27, 2010. The terms of the Senior Notes and Term
Loan are described in Chemtura’s Current Reports on Form 8-K filed with the
Securities and Exchange Commission (the “SEC”)on August 27 and September 30,
2010, which descriptions are incorporated herein by reference.
Treatment
of Executory Contracts
The Plan provides that all of the
Debtors’ Executory Contracts and Unexpired Leases shall be deemed rejected as of
the Effective Date, unless such Executory Contract or Unexpired Lease: (1) was
assumed or rejected previously by the Debtors; (2) previously expired or
terminated pursuant to its own terms; (3) is the subject of a motion to assume
filed on or before the Effective Date; or (4) is identified as an Executory
Contract or Unexpired Lease to be assumed pursuant to the Plan Supplement before
the Effective Date. The Plan provides that each of Chemtura Canada’s
Executory Contracts and Unexpired Leases shall be deemed assumed as of the
Effective Date.
Employment
Agreements and Equity Awards
The Plan provides that, on the
Effective Date, Chemtura will enter into new employment agreements (the “New
Employment Agreements”) with certain individuals in Chemtura’s senior
management. The form of the New Employment Agreements was included as
Exhibit K to the Plan Supplement, which was attached as Exhibit 99.1 to
Chemtura’s Current Report on Form 8-K, filed with the SEC on September 3, 2010,
which is incorporated herein by reference.
New
Incentive Compensation Plan
The Plan provides that, on the
Effective Date, a compensation program (the “New Incentive Plan”) implemented by
the new board of directors of Chemtura Corporation (the “New Board”) will become
effective, which shall include a long-term incentive plan, a stock-based
performance plan, a stock-based bonus settlement plan, and may include other
stock-based compensation consistent with the New Employment Agreements, as well
as a cash-based annual incentive plan consistent with past practice, as to which
awards are subject to the approval of the New Board. The terms of the
New Incentive Plan were included as Exhibit I to the Plan Supplement, which was
attached as Exhibit 99.1 to Chemtura’s Current Report on Form 8-K, filed with
the SEC on September 3, 2010.
3
Composition
of New Board of Directors
On the Effective Date, the New Board is
anticipated to consist of 8 directors, one of which shall be the chief executive
officer. The Debtors, the Creditors’ Committee and the Ad Hoc
Bondholders’ Committee established a board selection committee to select 8
members of the New Board in addition to the chief executive officer. The board
selection committee was advised by an independent search firm. The
New Board expects to appoint a ninth director on or before December 31,
2010. On the Effective Date, the New Board is expected to consist of
the following persons: Craig A. Rogerson, Jeffrey D. Benjamin, Timothy J.
Bernlohr, Alan S. Cooper, James W. Crownover, Jonathan F. Foster, Roger L.
Headrick and John K. Wulff.
Old
Capital Stock
As of June 30, 2010, Chemtura had
242,935,715 shares of common stock issued and outstanding. Chemtura is
authorized to issue 0.3 million shares of $0.10 par value preferred stock, none
of which are outstanding. All of the outstanding shares of Chemtura’s common
stock will be cancelled as of the Effective Date.
New
Capital Stock
As of the Effective Date, Chemtura’s
Amended and Restated Certificate of Incorporation (the “Certificate of
Incorporation”) will provide for 500,250,000 shares of capital stock, consisting
of: 500,000,000 shares of new common stock, par value $0.01 per share, of which
100,000,000 shares will be issued on or about the Effective Date; and 250,000
shares of preferred stock, par value $0.01 per share, none of which will be
issued on the Effective Date. Chemtura has reserved 11,000,000 shares
of new common stock for future issuance under the New Incentive
Plan.
Assets
and Liabilities
Information as to the assets and
liabilities of Chemtura is incorporated herein by reference to Chemtura’s
Monthly Operating Report for the period September 1, 2010 through September 30,
2010, attached as exhibit 99.1 to Chemtura’s Current Report on Form 8-K, filed
with the SEC on October 15, 2010.
Cautionary
Statements Regarding Financial and Operating Data.
Chemtura cautions investors and
potential investors not to place undue reliance upon the information contained
in the Monthly Operating Report as it was not prepared for the purpose of
providing the basis for an investment decision relating to any of the securities
of Chemtura or its subsidiaries, or any other affiliate of
Chemtura. The Monthly Operating Report was not audited or reviewed by
independent accountants, is as prescribed by applicable bankruptcy laws, and is
subject to future adjustment and reconciliation. There can be no
assurance that, from the perspective of an investor or potential investor in
Chemtura’s securities, the Monthly Operating Report is complete. The
Monthly Operating Report also contains information for periods which are shorter
or otherwise different from those required in Chemtura’s reports pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such
information might not be indicative of Chemtura’s financial condition or
operating results for the period that would be reflected in Chemtura’s financial
statements or in its reports pursuant to the Exchange Act. Results
set forth in the Monthly Operating Report should not be viewed as indicative of
future results.
4
Cautionary
Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K
contains various forward-looking statements and information that are based on
management’s belief, as well as assumptions made by and information currently
available to management. These forward-looking statements speak only as of the
date of this Current Report. Chemtura disclaims any obligation to
update these statements and cautions you not to rely unduly on
them. Forward-looking statements generally use words such as
“anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,”
“could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions and
include references to assumptions and relate to Chemtura’s future prospects,
developments and business strategies. Forward-looking statements
include, but are not limited to, statements regarding the confirmation and
implementation of the Plan, the securities to be issued pursuant to the Plan and
Chemtura’s ability to consummate, and any resulting effect of, the transactions
contemplated by the Plan. Although Chemtura believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that those expectations will prove to have been
correct. Such statements are subject to certain risks, uncertainties
and assumptions. Important factors that could cause actual results to
differ materially from the forward-looking statements in this Current Report are
set forth in other reports or documents that Chemtura files from time to time
with the Securities and Exchange Commission, including Chemtura’s Quarterly
Reports on Form 10-Q filed in 2010 and Chemtura’s most recent Annual Report on
Form 10-K and include, but are not limited to:
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·
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The
ability to satisfy the conditions for the effectiveness of the Plan
confirmed by the Bankruptcy Court (the “Effective
Date”);
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·
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The
ability to have the Bankruptcy Court approve motions required to sustain
operations during the Chapter 11 cases until the Effective
Date;
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·
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The
uncertainties of the Chapter 11 restructuring process through the
Effective Date including the potential adverse impact on our operations,
management, employees and the response of our
customers;
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·
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Our
estimates of the cost to resolve disputed proofs of claim presented in the
Chapter 11 cases;
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·
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The
ability to consummate the confirmed
Plan;
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·
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The
ability to be compliant with our debt covenants or obtain necessary
waivers and amendments;
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·
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The
ability to service our
indebtedness;
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·
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General
economic conditions;
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·
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Significant
international operations and
interests;
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·
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The
ability to obtain increases in selling prices to offset increases in raw
material and energy costs;
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·
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The
ability to retain sales volumes in the event of increasing selling
prices;
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·
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The
ability to absorb fixed cost overhead in the event of lower
volumes;
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·
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Pension
and other post-retirement benefit plan
assumptions;
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·
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The
ability to improve profitability in our Industrial Engineered Products
segment as the general economy recovers from the
recession;
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·
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The
ability to implement the El Dorado, Arkansas restructuring
program;
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·
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The
ability to obtain growth from demand for petroleum additive, lubricant and
agricultural product applications;
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·
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The
ability to restore profitability in our Chemtura AgroSolutionsTM as demand
conditions recover in the agrochemical market. Additionally,
the Chemtura AgroSolutionsTM is dependent on
disease and pest conditions, as well as local, regional, regulatory and
economic conditions;
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·
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The
ability to sell methyl bromide due to regulatory
restrictions;
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·
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Changes
in weather conditions which could adversely affect the seasonal selling
cycles in both our Consumer Performance Products and Chemtura
AgroSolutionsTM;
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·
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Changes
in the availability and/or quality of our energy and raw
materials;
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·
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The
ability to collect our outstanding
receivables;
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·
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Changes
in interest rates and foreign currency exchange
rates;
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·
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Changes
in technology, market demand and customer
requirements;
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The
enactment of more stringent U.S. and international environmental laws and
regulations;
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·
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The
ability to realize expected cost savings under our restructuring plans,
Six Sigma and Lean manufacturing
initiatives;
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·
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The
ability to recover our deferred tax
assets;
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·
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The
ability to support the goodwill and long-lived assets related to our
businesses; and
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·
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Other
risks and uncertainties detailed in Item 1A. Risk Factors in our filings
with the Securities and Exchange
Commission.
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5
Given
these risks and uncertainties, you are cautioned not to place undue reliance on
such forward-looking statements. The forward-looking statements contained in, or
incorporated by reference into, this Current Report are made only as of their
respective dates. Chemtura does not undertake and expressly disclaim any
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
law.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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Exhibit
Number
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Exhibit
Description
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2.1
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Confirmation
Order, dated November 3, 2010.
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2.2
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Joint
Chapter 11 Plan of Chemtura Corporation, et al, dated August 4, 2010, as
amended.
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6
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Chemtura Corporation
(Registrant)
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By:
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/s/ Billie S. Flaherty
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Name:
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Billie
S. Flaherty
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Title:
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SVP,
General Counsel &
Secretary
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Date:
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November
4, 2010
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Exhibit Number
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Exhibit Description
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2.1
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Confirmation
Order, dated November 3, 2010.
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2.2
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Joint
Chapter 11 Plan of Chemtura Corporation, et al, dated August 4, 2010, as
amended.
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7