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8-K - LANXESS Solutions US Inc. | v202196_8k.htm |
QUESTIONS
AND ANSWERS REGARDING CONFIRMATION AND
EFFECTIVENESS
OF JOINT PLAN OF REORGANIZATION
On
October 21, 2010, the United States Bankruptcy Court for the Southern District
of New York (the “Bankruptcy
Court”) rendered a Bench Decision on Confirmation with respect to the
Joint Chapter 11 Plan of
Chemtura Corporation, et al. [Docket No. 3497] (as amended, modified or
supplemented from time to time, the “Plan”), and on November 3,
2010, the Bankruptcy Court entered an order confirming the Plan [Docket No.
4409]. All references to the “Effective Date” in the Plan and the
Revised Disclosure Statement
for the Joint Chapter 11 Plan of Chemtura Corporation, et al., filed
August 5, 2010 [Docket No. 3503] (the “Disclosure Statement”) mean
the date that all of these conditions have been satisfied or waived and the Plan
has been substantially consummated.1 The Effective Date occurred on
November 10, 2010.
I.
|
When
will the Effective Date occur?
|
The
Effective Date occurred on November 10, 2010.
II.
|
Once
the Plan has become effective, what will I receive from the Debtors under
the Plan?
|
The
distribution that you will receive under the Plan, if any, depends on what kind
of Claim or Interest you hold and whether you hold
such Claim or Interest on the applicable distribution record date as described
in section XVIII. As
described in section VIII of the Disclosure Statement, entitled “Description of
the Joint Plan of Reorganization,” Article III of the Plan creates categories of
holders of Claims and Interests, each of which is referred to as a
“Class.” A summary of the Classes of Claims and Interests is set
forth in the Executive Summary of the Disclosure Statement.
You
should refer to the entire Disclosure Statement, the Plan, and the Plan
Supplement for a complete description of the classification and treatment of
each Class of Claims and Interests. This Supplemental Disclosure is
intended to provide updated information with respect to distributions and is not
intended to amend or supersede the Disclosure Statement or any other document
filed in the Debtors’ chapter 11 cases.
III.
|
What
is a Claim?
|
_____________________
1 Capitalized
terms used but not defined herein shall have the meaning ascribed to them in the
Plan, the Disclosure Statement and/or the Disputed Claims Reserve Order, as
defined herein. Any party may obtain a copy of the filings in these
cases free of charge from Kurtzman Carson Consultants LLC, the voting and
claims agent retained by the Debtors in the Chapter 11 Cases, by visiting the
Debtors’ restructuring website at: www.kccllc.net/chemtura.
As
defined by the Plan, “Claim” means any claim
against a Debtor or, to the extent specifically referenced in the Plan, a
Non-Debtor Affiliate, as defined in section 101(5) of the Bankruptcy
Code.
IV.
|
What
is an Interest?
|
As
defined by the Plan,
“Interest” means any share of common stock, preferred stock or other
instrument evidencing an ownership interest in any of the Debtors, whether or
not transferable, and any option, warrant or other right, contractual or
otherwise, to acquire any such interest in a Debtor that existed before the
Effective Date, any phantom stock or other similar stock unit provided pursuant
to the Debtors’ prepetition employee compensation programs and any Claim related
to the purchase of interests subject to subordination pursuant to
section 510(b) of the Bankruptcy Code; provided, however, that to the
extent an Interest is subject to the compliance with the terms of a prepetition
contract or other agreement, any recovery under the Plan on account of such
Interest shall be subject to the terms of such contract or agreement.
V.
|
If
I am entitled to a distribution on account of a Claim or Interest under
the Plan, when will I receive that
distribution?
|
Distributions
for Allowed Claims and Interests are being made on the Effective Date or as soon
as practicable thereafter, in accordance with Article XII of the Plan (and
for Claims that are not yet Allowed, section 8.5 of the Plan provides that
distributions will be made on the next quarterly distribution date after your
Claim has been Allowed). In addition, parties that hold existing common stock and/or other Interests in Chemtura
("Class 13a
Interests") on the date initial
equity distributions are made under the Plan (“Class 13a Equity Holders”) may
receive certain supplemental distributions, as described in sections XIII, XIV,
XV and XVI below.
VI.
|
If
I am entitled to a distribution under the Plan on account of an Allowed
Claim, will I receive Cash, Common Stock or both? If I will
receive both Cash and Common Stock, what percentage of my Allowed Claim
will be satisfied by each?
|
Distributions
under the Plan generally will include a combination of New Common Stock and
Cash. The following sets forth the approximate Cash and New Common
Stock allocations to be paid on account of Allowed Claims against a Debtor other
than Chemtura Canada.
Claims
|
Recovery
in New Common Stock
|
Recovery
in Cash
|
Class 1:
Prepetition
Secured Lender Claims
|
N/A
|
100%
|
Class 2:
Lien
Claims
|
N/A
|
100%
|
Class 3:
Other
Priority Claims
|
N/A
|
100%
|
Class 4a:
General
Unsecured Claims against Chemtura
|
86.0%
|
14.0%
|
Class 4b:
General
Unsecured Claims against the Subsidiary Debtors
|
86.0%
|
14.0%
|
Class 4c:
General
Unsecured Claims against Chemtura Canada
|
N/A
|
100%
|
Class 5:
Prepetition
Unsecured Lender Claims
|
86.0%
|
14.0%
|
Class 6:
2016
Notes Claims
|
86.0%
|
14.0%
|
Class 7:
2009
Notes Claims
|
86.0%
|
14.0%
|
Class 8:
2026
Notes Claims
|
86.0%
|
14.0%
|
Class 9:
Unsecured
Convenience Claims
|
N/A
|
100%
|
Class 10:
Diacetyl
Claims
|
N/A
|
100%
|
Class 11:
Environmental
Claims
|
N/A
|
100%
|
Class 12:
Intercompany
Claims
|
N/A
|
N/A
|
2
Based
upon the Plan valuation per share of the
New Common Stock of $13.45 and the above summary, except as described
in section VII below and subject to potential changes as described above, the
Debtors’ preliminary calculations show that holders of Allowed Claims in Classes
4a, 4b, 5, 6, 7 and 8 as of the Effective Date would receive 63.93 shares of New
Common Stock and $140.25 in Cash for every $1,000 of their Allowed
Claims. The aggregate Allowed Claims for Classes 5, 6, 7, and 8 upon
the Effective Date were $131,288,897, $618,596,333, $418,431,730, and
$188,362,563, respectively.
VII.
|
What
if I made a recovery preference election for Cash or New Common Stock when
I voted to accept or reject the
Plan?
|
If you
are a holder of an Allowed Prepetition Unsecured Lender Claim, an Allowed
General Unsecured Claim against a Debtor other than Chemtura Canada, or an
Allowed Notes Claim, you were eligible to elect to receive a preference for your
recovery in the form of the maximum available amount of Cash or the maximum
available amount of New Common Stock. If you timely made a recovery
preference election and are the holder of an Allowed Claim as of the Effective
Date, the Cash and New Common Stock that would have otherwise been distributed
to you under the Plan will be reallocated among all holders of Allowed Claims
who made recovery preference elections based upon those elections.2
Holders
of Allowed Claims who elected to receive the maximum available percentage
recovery as Cash will receive their distribution in the amount provided under
the Plan, and it is anticipated at this time that approximately 82.6% of the
distribution for these electing creditors will be paid in New Common Stock and
approximately 17.4% will be paid in Cash. Based upon the Plan
valuation per share of the New Common
Stock of $13.45 and the foregoing
preliminary estimates of distributions, holders of Allowed Claims who elected to
receive the maximum available percentage as Cash will receive 61.44 shares of
New Common Stock and $173.79 in Cash for every $1,000 of their Allowed
Claims.
___________________
1 Holders
of Disputed Claims were not eligible to make a recovery preference
election.
3
Holders
of Allowed Claims who elected to receive the maximum available percentage
recovery as New Common Stock will receive their distribution in the amount
provided under the Plan, and it is anticipated at this time that approximately
100% of the distribution for these electing creditors will be paid in New Common
Stock and approximately 0% will be paid in Cash. Based upon the Plan
valuation per share of the New Common
Stock of $13.45 and the foregoing preliminary estimates of
distributions, holders of Allowed Claims who elected to receive the maximum
available percentage as New Common Stock will receive 74.36 shares of New Common
Stock and $0 in Cash for every $1,000 of their Allowed Claims.
VIII.
|
How
will distributions on account of Allowed Claims as of the Effective Date
be made?
|
On the
Effective Date, the Debtors began the process of paying Allowed
Claims. Each holder of an Allowed Claim as of the Effective Date in
Classes 1, 2, 3, 4c, 9, 10 and 11 will receive a check payable in the amount of
Cash to which the claimant is entitled. Each holder of an Allowed
Claim as of the Effective Date in Classes 4a, 4b, 5, 6, 7 and 8 will receive,
in two separate
mailings, a shareholder statement indicating the number shares of New
Common Stock that have been issued to the claimant on account of the Allowed
Claim, and a check payable in the amount of Cash to which the claimant is
entitled. Holders of Allowed Claims should allow at least 21 days
from the Effective Date to receive both the New Common Stock and the
Cash. If either is not received after 21 days, please contact the
Debtors’ claims agent at (866) 967-0261.
IX.
|
I
am the holder of a Disputed Claim. If my Claim becomes an
Allowed Claim, how will I receive my
distribution?
|
All
holders of Disputed Claims (except Disputed Claims held by nine parties
specifically identified in the Order Establishing a Distribution
Reserve Amount with Respect to Disputed Claims in Connection With Confirmation
Of The Joint Plan of Reorganization, entered October 29, 2010 [Docket No.
4383] (the “Disputed Claims
Reserve Order”), will receive distributions if their claim becomes an
Allowed Claim only from an aggregate reserve of Cash and New Common Stock (the
“Non-Objecting Creditors’
Reserve”) that has been established in the total value of
$41,850,000. Shares of New Common Stock distributed to holders of
Disputed Claims that become Allowed Claims following the Effective Date shall be
deemed to have the Plan valuation per share of $13.45 regardless of the date of
distribution.
X.
|
How
will the Non-Objecting Creditors’ Reserve be
funded?
|
Pursuant
to the Plan and the Disputed Claims Reserve Order, on the Effective Date or as soon as practicable
thereafter, the Non-Objecting Creditors’ Reserve will be established in
the amount of $41,850,000 in a combination of Cash and authorized New Common
Stock consistent with the treatment set forth in the Plan for holders of Allowed
Claims. Based upon the preliminary distribution estimates set forth
above, and subject to the qualifications described herein, the Non-Objecting
Creditors’ Reserve would contain 14.0% in Cash and 86.0% in authorized New
Common Stock as of the Effective Date, or 2,675,645
shares of New Common Stock and
$5,869,620.67 in Cash.
4
The amount of the Non-Objecting Creditors' Reserve was
established based the Debtors’ internal high-end estimate of the likely
aggregate valuation of the Disputed Claims covered by the reserve plus
20% of that estimate.
XI.
|
What
other claims reserves will be
established?
|
In
addition to the Non-Objecting Creditors’ Reserve of $41,850,000, the Debtors
will also establish the Diacetyl Reserve, the Environmental Reserve, and several
individual, segregated reserves (the "Segregated Reserves" and collectively, with the Diacetyl Reserve,
the Environmental Reserve and the Non-Objecting Creditors’ Reserve, the “Claims
Reserves”). The Segregated Reserves will be established as
required by the Bankruptcy Court, in accordance with the Disputed Claims Reserve
Order, in the amounts set forth below. The Diacetyl Reserve and the
Environmental Reserve will be funded fully in Cash and the Objecting Creditors’
Reserves will include Cash and New Common Stock in the same percentages as
provided for the Non-Objecting Creditors’ Reserve, as outlined in section X
above.
Diacetyl and Environmental
Reserves
|
Amount
of Reserve
|
Diacetyl
Reserve
|
$283,7503
|
Environmental
Reserve
|
$28,614,822.894
|
Segregated
Reserves5
|
Amount
of Reserve
|
Spartech
Polycom, Inc.
|
$8,000,000
|
Pentair
Water Pool and Spa, Inc.
|
$2,000,000
|
Oildale
Energy LLC
|
$16,263,764
|
The
BKK Joint Defense Group
|
$200,000
|
Cooper
Drum Cooperating Parties Group
|
$2,000,000
|
Beacon
Heights Coalition
|
$135,515.89
|
FLABEG
Technical Glass US Corporation
|
$60,000
|
The
Dow Chemical Company
|
$975,000
|
Total
Segregated Reserves
|
$29,634,280
|
_____________________
3 By
order dated September 24, 2010, the Bankruptcy Court approved the establishment
of the Diacetyl Reserve in the aggregate amount of $6,923,975, with this amount
being further segregated into separate reserves based upon certain settlements
for which approval was pending at that time. The Bankruptcy Court
authorized the Debtors to reduce the amount of the segregated reserves to the
extent of amounts authorized to be paid in settlements approved after entry of
the Diacetyl Reserve order (and in certain other circumstances). The
amount of the Diacetyl Reserve set forth above represents the amount that will
be paid to one Diacetyl Claimant under the only settlement agreement that has
not yet been approved.
4 By
order dated October 19, 2010, the Bankruptcy Court approved the establishment of
the Environmental Reserve in the aggregate amount of $38,145,938.55, a portion
of which is held in separate segregated reserves. In addition, the
Bankruptcy Court authorized the Debtors to reduce the amount of the
Environmental Reserve by the amount of Disputed Environmental Claims that become
Allowed Environmental Claims before the Effective Date. The amount of
the Environmental Reserve has been reduced accordingly.
5 Additional
information regarding the claims underlying the Segregated Reserves can be found
in the following: Spartech Polycom Inc.’s Objection to
the Debtors Motion for an Order Establishing a Distribution Reserve Amount with
Respect to Disputed Claims in Connection with Confirmation of the Joint Chapter
11 Plan of Chemtura Corporation [Dkt. No. 3887]; Objections of Pentair Water Pool and
Spa, Inc. to Debtors’ (I) Joint Plan of Reorganization and (II) Motion Seeking
Establishment of a Disputed Claims Reserve [Dkt. No. 3941]; Objection of Unsecured Creditor
Oildale Energy to Motion for Order Establishing A Distribution Reserve Amount
with Respect to Disputed Claims [Dkt. No. 3895]; Joinder of the Beacon Heights
Coalition, the Laurel Park Coalition, and Other Environmental Claimants to the
Limited Objection of Spartech Polycom, Inc. to the Joint Chapter 11 Plan of
Chemtura Corporation, et al. [Dkt. No. 3896]; Response in Support of Motion for an
Order Establishing a Distribution Reserve Amount with Respect to Disputed Claims
in Connection with Confirmation of the Joint Chapter 11 Plan of Chemtura
Corporation, et al. [Dkt. No. 4043]; and Declaration of Billie S. Flaherty in
Support of Debtors’ Response in Support of Motion for an
Order Establishing a Distribution Reserve Amount with Respect to Disputed Claims
in Connection with Confirmation of the Joint Chapter 11 Plan of Chemtura
Corporation, et al. [Dkt. No. 4058]. In addition to the
filings listed above, other filings have been submitted in connection with the
objections to the Disputed Claims Reserve and other proceedings to allow or
disallow the disputed claims, which can be obtained by visiting the Debtors’
restructuring website at: www.kccllc.net/chemtura.
5
A hearing
before the Bankruptcy Court to estimate Oildale’s claim was held on November 10,
2010, at which hearing Oildale stipulated to reduce the Segregated Reserve with
respect to their claim to approximately $14.49 million. The Debtors
sought at the hearing to further decrease the Segregated Reserve for Oildale,
and the Bankruptcy Court has taken the matter under submission. The
Debtors have a scheduled estimation hearing before the Bankruptcy Court with
respect to the claims of Spartech Polycom, Inc. on November 30, 2010 seeking to
reduce the amount of the Segregated Reserve for such claims. Any
reduction of the Segregated Reserves will result in supplemental distributions
as described in section XII below. These two estimation hearings
cannot result in any increase in the respective Segregated
Reserves.
XII.
|
Will
additional Cash or New Common Stock ever be added to the Non-Objecting
Creditors’ Reserve?
|
The Plan
and the Disputed Claims Reserve Order provide that the Non-Objecting Creditors’
Reserve will not be increased or replenished, except to the extent that a
surplus exists in certain other reserves established as of the Effective Date,
in which case some or all of the surplus in such reserves will be transferred to
the Non-Objecting Creditors’ Reserve, as described in the following two
paragraphs.
Under
Sections 9.4 and 10.5 of the Plan, when all Diacetyl Claims and Environmental
Claims subject to the Diacetyl Reserve and the Environmental Reserve,
respectively, are resolved and either become Allowed or are disallowed by the
Bankruptcy Court, to the extent Cash remains in either the Diacetyl Reserve or
the Environmental Reserve, such Cash shall be transferred to the Non-Objecting
Creditors’ Reserve. There can be no
assurance that any such amounts will remain in the Diacetyl Reserve and/or the
Environmental Reserve and, if any such amounts remain, when such amounts will
ultimately be transferred to the Non-Objecting Creditors’
Reserve.
Pursuant
to the Disputed Claims Reserve Order, to the extent that a release of
distributable value (Cash or New Common Stock) from any of the Segregated
Reserves is authorized by a later order of the Bankruptcy Court, the released
distributable value will be treated as follows: (a) 50% of the
released distributable value from any Segregated Reserve will be transferred to
the Non-Objecting Creditor Reserve, until such time as an aggregate of $15
million (the “Additional
Reserve Amount”) has been transferred to the Non-Objecting Creditor
Reserve, and (b) the remaining 50% of released distributable value will be
distributed to Class 13a Equity Holders as soon as reasonably practicable after entry
of the applicable Bankruptcy Court order authorizing the
release. Neither the Plan nor the Disputed Claims Order specifies the
proportion of Cash and New Common Stock that may be released from the Segregated
Reserves and transferred to the Non-Objecting Creditor Reserve or to Class 13a
Equity Holders. As a result, the Bankruptcy Court will determine the
proportion of Cash and New Common Stock to be released from a Segregated Reserve
in its order authorizing such release.
6
In computing "released distributable value," shares of
New Common Stock shall be deemed to have a value per share equal to the Plan valuation of $13.45, regardless of the date of
distribution.
There can be no assurance that any such amounts will be
released from the Segregated Reserves or when any such release might
occur.
XIII.
|
Will
value be released from the Non-Objecting Creditors’ Reserve for any reason
other than to pay Allowed Claims?
|
Because
all holders of Claims in the Participating Creditor Classes (except holders of
Claims that are Disputed Claims) will have been paid in full, plus postpetition
interest as applicable under the Plan, value may be released from the
Non-Objecting Creditors’ Reserve in the form of one or more supplemental
distributions to Class 13a Equity Holders, but only if and to the extent that
such release is ordered by the Bankruptcy Court following the procedures
described below. If the Bankruptcy Court authorizes a release of
value from the Non-Objecting Creditors'
Reserve, then the amount authorized by the Bankruptcy Court (including
the proportion of Cash and New Common Stock) will be distributed from the
Non-Objecting Creditors’ Reserve as soon as practicable following entry of the
Bankruptcy Court order authorizing the release. The proportion of Cash and New Common Stock
to be released from the Non-Objecting Creditor's Reserve to Class 13a Equity
Holders will be determined by the Bankruptcy Court if it authorizes such a
release.
In computing value (if any) that is released from the
Non-Objecting Creditor's Reserve to Class 13a Equity Holders, shares
of New Common Stock shall be deemed to have a value per share equal to the
Plan valuation of $13.45, regardless of the date of
distribution.
Section
8.5(b) of the Plan provides that parties in interest may periodically request,
on notice and a hearing, that the Bankruptcy Court review the remaining amount
of the Disputed Claims Reserve, in light of the estimated aggregate value of
Disputed Claims remaining to be liquidated, to determine whether a supplemental
distribution to Class 13a Equity Holders from the Non-Objecting Creditors’
Reserve is appropriate.
Specifically,
each quarter the Debtors shall provide a confidential report (each such report,
a “Quarterly Claims
Report”) to the Creditors’ Committee and the Equity Committee regarding
the remaining Disputed Claims. The Quarterly Claims Report will
include the Debtors’ reasonable high-end estimate of the aggregate value of the
remaining Disputed Claims subject to the Non-Objecting Creditors’ Reserve,
prepared consistent with the methodology used by
the Debtors to prepare claims estimates pre-confirmation. The
Debtors will evaluate the Quarterly Claims Report and consider whether a
reduction of the Non-Objecting Creditors’ Reserve is warranted, and there shall
be a rebuttable presumption that the Disputed Claims Reserve shall be maintained
at the reasonable high-end estimate of the aggregate value of the remaining
Disputed Claims plus 20%. If the Debtors determine following review
and consultation with the Equity Committee and the Creditors Committee that a
reduction is warranted, the Debtors will file a motion, on notice and with
opportunity for a hearing, for approval by the Bankruptcy Court of a
supplemental distribution from the Non-Objecting Creditors’ Reserve to Class 13a
Equity Holders.
7
If the
Debtors elect not to file a motion for a supplemental distribution within 30
days following the date that the Quarterly Claims Report is distributed, any
other party in interest, including the Creditors’ Committee or the Equity
Committee, may file such a motion. For the avoidance of doubt, no
party may move for an increase in the Non-Objecting Creditors’ Reserve or any
other Claims Reserve.
In
addition to the above procedures, at the time when all Disputed Claims have been
resolved and all Allowed Claims have been satisfied, if excess Cash or New
Common Stock remains in any Claims Reserve, then such Cash and New Common Stock
will be distributed to Class 13a Equity Holders on a Pro Rata basis as soon as reasonably practicable after the final
resolution of the last Disputed Claim and satisfaction of the last Allowed
Claim.
There can be no assurance that any value will be
released from the Non-Objecting Creditors’ Reserve to Class 13a Equity Holders
or when any such release might occur.
XIV.
|
Will
value be released from the Segregated Reserves for any reason other than
to pay Allowed Claims?
|
As
described in section XII, to the extent that a release of distributable value
from any of the Segregated Reserves is authorized by an order of the Bankruptcy
Court, 50% of such value will be distributed to Class 13a Equity Holders as soon
as reasonably practicable after entry of the
applicable Bankruptcy Court order authorizing the
release. After the Additional Reserve Amount has been
transferred to the Non-Objecting Creditors’ Reserve, 100% of all released
distributable value from any Segregated Reserve will be distributed to Class 13a
Equity Holders as soon as reasonably practicable after entry of the applicable
Bankruptcy Court order authorizing the release.
XV.
|
If
my Disputed Claim becomes an Allowed Claim after the Effective Date, will
the claim be paid in Cash, Common Stock or both? Will I be paid
interest?
|
If a
Disputed Claim becomes an Allowed Claim after the Effective Date, the Debtors’
Disbursing Agent shall provide to the holder of such Claim the distribution (if
any) to which such holder is entitled under the Plan. No interest
will be paid on account of any such Allowed Claim for the period between the
Effective Date and the date the Claim becomes allowed, except that Claims on account
of goods and services will receive interest for the time period between the
Petition Date and the date such Claim becomes Allowed, payable at the contract
rate to the extent allowable under law, or, if no allowable contract rate is
specified, the federal judgment rate as of the Petition Date.
8
Disputed
Claims that become Allowed after the Effective Date will be satisfied in the
same proportion of Cash and New Common Stock that would have been paid if such
Claims had been Allowed as of the Effective Date, as outlined in section VI
above (and subject to the risks set forth in section VI), all to the extent
value is available in the applicable Claims Reserve for
distribution.
XVI.
|
If
I am entitled to a distribution under the Plan on account of an Interest
in Chemtura, how much value will I receive
and will I receive Cash
or New Common Stock? If I will receive both Cash and New Common
Stock, what percentage of my Allowed Claim will be satisfied by
each?
|
Class 13a
Interests in Chemtura have voted to reject the Plan and, as a result, will
receive their pro rata share of value available for distributions after all
Allowed Unsecured Claims have been paid in full in accordance with the terms of
the Plan. Specifically, recoveries for Class 13a Equity Holders are
subject to the outcome and resolution of several factors described throughout
the Disclosure Statement, including the actual amount of Allowed
Claims.
The
initial distribution available for Class 13a Equity Holders on or as soon as
practicable after the Effective Date will be in the form of New Common
Stock. The preliminary estimate of the aggregate value of the initial
distribution is $49,266,175.46 (valuing the New Common Stock at the plan
valuation per share of $13.45, which
is approximately 3.7% of the New Common Stock. The preliminary
estimate of the initial distributable value per share of existing common stock
is approximately $0.203, which equates to approximately 0.0151
shares of New Common Stock being distributed on account of every one share of existing common stock or equivalent
Interest (or, one share of New Chemtura Stock for every 66.3815 shares of
existing common stock). Whenever any payment of New Common
Stock of a fraction pursuant to the Plan would otherwise be required, the actual
distribution shall reflect a rounding of such fraction to the nearest whole
share (up or down), with half or less being rounded down.
Each of
the Class 13a Equity Holders will receive its initial distribution by mail in
the form of a shareholder statement indicating the number shares of New Common
Stock that have been issued to the Class 13a Equity Holder on account of its
Class 13a Interests. Class 13a Equity Holders should allow at least
21 days from the Effective Date to receive their New Common Stock. If
not received after 21 days, please contact the Debtors’ claims agent at (866)
967-0261.
For the
avoidance of doubt, subsequent distributions (if any) to holders of Class 13a
Interests will be made to Class 13a Equity Holders that receive initial
distributions pursuant to the Plan.
XVII.
|
Will
subsequent distributions be made to Class 13a Equity Holders after the
Effective Date? If so, how will the amount of such
distributions be determined?
|
The total
value available for Class 13a Equity Holders depends on the amount of Allowed
Claims. While some of the Claims against the Debtors will be Allowed
or agreed in a fixed amount as of the Effective Date, other Claims are Disputed
Claims for which the value is not now known and may not be known as of the
Effective Date. As described above, the Debtors have established the
Claims Reserves for such claims.
9
As
described in sections XII, XIII and XIV above, it is possible (but not
guaranteed) that subsequent distributions will be made to Class 13a Equity
Holders to the extent that a release of distributable value (Cash or New Common
Stock or
a combination thereof) from any of the Segregated Reserves or from the
Non-Objecting Creditors’ Reserve is authorized by order of the Bankruptcy
Court. There can be no assurance that any distributable value
will be released from the Segregated Reserves or the Non-Objecting Creditors’
Reserve to Class 13a Equity Holders or when any such release might
occur.
For the avoidance of doubt, only holders of Class 13a
Interests as of the Effective Date will be entitled to receive any subsequent
distributions available to Class 13a Equity Holders as described
above.
XVIII.
|
What
is the Record Date for
Distributions?
|
The
Confirmation Order provides, among other things, that the Distribution Record
Date for all classes of Claims and Interests other than holders of publicly
traded debt or equity securities will be the date the Confirmation Order was
entered by the Bankruptcy Court, which was November 3, 2010. With
respect to classes of holders of publicly traded debt, distributions pursuant to
the Plan will be made to the holder of such security on or as soon as
practicable after the Effective Date of the Plan. With respect to
Class 13a Interests, initial distributions pursuant to the Plan will be made to
the holder of such Interest on or as soon as practicable after the Effective
Date of the Plan and supplemental distributions will be made to that same holder
as described in XVII above.
As of the
date of the entry of the Confirmation Order, the various transfer registers as
maintained by the Debtors or their respective agents for each of the Classes of
Claims or Interests subject to the Distribution Record Date (but not for holders
of publicly traded debt or equity securities) shall be deemed closed, and there
shall be no further changes made to reflect any new record holders of any Claims
or Interests.
XIX.
|
Who
are the Disbursing Agents?
|
The
Confirmation Order provides that, notwithstanding anything to the contrary
contained in the Plan or the Plan Supplement, each of the Indenture Trustees
will serve as Disbursing Agent to facilitate distributions to its respective
Class of Notes Claims and Chemtura will serve as the Disbursing Agent to
facilitate all other distributions pursuant to the Plan.
XX.
|
Who
is responsible for resolving Disputed Claims subject to the Claims
Reserves?
|
The
Debtors are faced with numerous Disputed Claims that will not be Allowed as of
the Effective Date and will be subject to one of the Claims Reserves, including
claims that are unliquidated or subject to litigation. Chemtura is
responsible for reconciling and resolving the Disputed Claims and will do so in
accordance with its fiduciary duty to maximize the value of the Debtors’
estates.
10
XXI.
|
When
do the restrictions currently in place with respect to trading existing
common stock end?
|
On May 5,
2009, the Bankruptcy Court entered the Final Order Establishing
Notification and Hearing Procedures for Transfers of Certain Common Stock
[Docket No. 322] (the “NOL
Order”). The NOL Order and all restrictions contained therein
remain in effect until the Effective Date.
XXII.
|
When
will Chemtura be listed on the New York Stock
Exchange?
|
The New
Common Stock of Chemtura was listed on the New York Stock Exchange on
Thursday, November 11, 2010.
XXIII.
|
Who
should I contact if I have questions about the information provided in
this disclosure or my distribution under the
Plan?
|
If you
have questions about information in this disclosure, please contact the Debtors’
claims agent at (866) 967-0261.
XXIV.
|
Are
there any proceedings pending before the Bankruptcy Court that would delay
the Effective Date or change distributions to holders of Claims or
Interests?
|
On
November 5, 2010, creditor Pentair Water Pool and Spa Inc. (“Pentair”) filed an Emergency
Motion Seeking Injunctive Relief to Protect Rights Pending Appeal (the “Emergency Motion”) seeking to
require the Debtors to establish a new segregated reserve for certain Disputed
Claims. On November 8, 2010, following a hearing, the Bankruptcy
Court issued a decision denying the Emergency Motion. The effect of
the Bankruptcy Court’s decision is that the Claims Reserves described in Section
XI, above, will be the reserves established under the Plan. No other
proceedings are pending before the Bankruptcy Court or any other court seeking
to delay the Effective Date or otherwise challenge the Plan.
XXV.
|
Forward-Looking
Statement
|
This
document includes forward-looking statements within the meaning of Section
27(a) of the Securities Act of 1933, as amended and Section 21(e) of the
Exchange Act of 1934, as amended. These forward-looking statements
are identified by terms and phrases 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 our future prospects, developments and business
strategies.
Factors
that could cause our actual results to differ materially from those expressed or
implied in such forward-looking statements include, but are not limited
to:
·
|
Our
estimates of the cost to resolve disputed proofs of claim presented in the
Chapter 11 cases;
|
·
|
The
ability to service our
indebtedness;
|
·
|
General
economic conditions;
|
11
·
|
Significant
international operations and
interests;
|
·
|
The
ability to obtain increases in selling prices to offset increases in raw
material and energy costs;
|
·
|
The
ability to retain sales volumes in the event of increasing selling
prices;
|
·
|
The
ability to absorb fixed cost overhead in the event of lower
volumes;
|
·
|
Pension
and other post-retirement benefit plan
assumptions;
|
·
|
The
ability to improve profitability in our Industrial Engineered Products
segment as the general economy recovers from the
recession;
|
·
|
The
ability to implement the El Dorado, Arkansas restructuring
program;
|
·
|
The
ability to obtain growth from demand for petroleum additive, lubricant and
agricultural product applications;
|
·
|
The
ability to restore profitability levels in our Chemtura AgroSolutionsTM
segment as demand conditions recover in the agrochemical
market. Additionally, demand for the Chemtura AgroSolutionsTM
segment is dependent on disease and pest conditions, as well as local,
regional, regulatory and economic
conditions;
|
·
|
The
ability to sell methyl bromide due to regulatory
restrictions;
|
·
|
Changes
in weather conditions which could adversely affect the seasonal selling
cycles in both our Consumer Performance Products and Chemtura
AgroSolutionsTM segment;
|
·
|
Changes
in the availability and/or quality of our energy and raw
materials;
|
·
|
The
ability to collect our outstanding
receivables;
|
·
|
Changes
in interest rates and foreign currency exchange
rates;
|
·
|
Changes
in technology, market demand and customer
requirements;
|
·
|
The
enactment of more stringent U.S. and international environmental laws and
regulations;
|
·
|
The
ability to realize expected cost savings under our restructuring plans,
Six Sigma and Lean manufacturing
initiatives;
|
·
|
The
ability to recover our deferred tax
assets;
|
·
|
The
ability to support the goodwill and long-lived assets related to our
businesses; and
|
·
|
Other
risks and uncertainties detailed in Item 1A. Risk Factors in our filings
with the Securities and Exchange
Commission.
|
These
statements are based on the Debtors’ estimates and assumptions and on currently
available information. The forward-looking statements include information
concerning the Debtors’ possible or assumed future results of operations, and
the Debtors’ actual results may differ significantly from the results
discussed. Forward-looking information is intended to reflect
opinions as of the date this press release was issued. The Debtors
undertake no duty to update any forward-looking statements to conform the
statements to actual results or changes in the Debtors’ operations.
12