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  • rtfa50 rtfa50 Jun 20, 2009 11:27 AM Flag

    huntsman in german press

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

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    • 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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