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  • rtfa50 rtfa50 Jun 20, 2009 10:57 AM Flag

    huntsman in german press

    The U.S. chemical company sued the German Bank and Credit Suisse for damages. This involves a total of almost 14 billion U.S. dollars. Both institutions had in 2007 from an acquisition financing was withdrawn, making the deal burst. The banks have the allegations.

    The German bank must itself against claims from the U.S. to defend. Source: ap
    NEW YORK. The Deutsche Bank and Credit Suisse face a billion-dollar compensation payment. The U.S. chemical company Huntsman has to launch the trial of the two institutions in Conroe, Texas 13.8 billion U.S. dollars as a substitute for it demanded that the banks in 2007 of a takeover have withdrawn funding. So far, only 4.6 billion U.S. dollars been spoken. Both banks confirmed that they had nothing to be ashamed of. There will be a processing time of six weeks.

    Huntsman was in 2007 by both institutions financed takeover bid of the investor, Apollo and the lower offer from a competitor ausgeschlagen. The burst transaction, when the banks retreated from funding. Huntsman argued before the jury, the banks had withdrawn because of the financial crisis in the funding costs had risen. The banks rely on an exit clause, which had grabbed, because the business of Huntsman by the recession had worsened. "We have done our job by putting such people have no money borrowed that they cannot pay back." This is a rough translation from Google.

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    • you're not kidding "it's a rough translation"!!!

    • The words, "The banks rely on an exit clause", is a concern. Was there an exit
      clause in the commitment letter?

      • 2 Replies to rtfa50
      • cashmoneybrother@rocketmail.com cashmoneybrother Jun 20, 2009 8:48 PM Flag

        There was no "market out" provision in the Commitment Letter (which is widely available, either in HUN filings or from Scribd. If you have not read, highly suggest you do. Market out provisions allow banks to withdraw funding in the event of unforeseen market disruptions, such as the one we are currently witnessing. At the height of the bubble (pick the bubble), borrowers negotiated these out of commitment letters and in order to get their grubby little hands on the transaction fees, banks willingly deleted these clauses from deals in the belief that they could simply use other means to walk away from funding commitments, as here. This case will tell them that they cannot. This is why I am so perplexed as to why the banks are even contesting this matter and risking a very basty precedent to be put on the books, albeit a TX trial level precedent.

      • part of the problem is the literal translation of the program used.

        the other part is that the banks claim they were allowed to withdraw if HUN was insolvent based on the contract requirement that HUN CFO produce a "solvency certificate" at closing.

        there was no closing, banks failed to show. so even the CFO certificate requirement holds no water. but HUN did produce solvency certificate and was not insolvent.

        so this "xclause" in the article is not a real thing.

 
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