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Elan Corporation, plc Message Board

  • baldingcontrarian baldingcontrarian Mar 15, 2005 7:36 PM Flag

    Easily the hottest stock on the street-

    is SOLUQ...

    here is just another reason why,

    Lawsuit filed against MON and PFE

    WASHINGTON (Dow Jones)--Solutia Inc. (SOLUQ) stockholders want hundreds of millions of dollars in claims filed against the chemical company by former corporate affiliates Monsanto Co. (MON) and Pfizer Inc.'s (PFE) Pharmacia Corp. unit put at the back of the line for repayment or disallowed altogether.
    In a suit filed Monday in the court overseeing Solutia's Chapter 11 bankruptcy, Solutia's official shareholder committee claims Monsanto and Pharmacia used the chemical business now known as Solutia as "an ATM machine" to fund their life science operations, and then dumped huge retiree and environmental liabilities onto the business when spinning it off in 1997.
    The equity committee asked the court to disallow claims by Pharmacia and Monsanto against Solutia's bankruptcy estate, or treat them as equity - meaning they would be subordinated to almost all other claims under the Bankruptcy Code. The first hearing on the issues is scheduled for May 24.
    Both a Monsanto spokesman and a Solutia spokesman said they hadn't seen the suit, so they couldn't comment.
    A Pfizer representative said he couldn't comment on the suit.
    Solutia was spun off from the former Monsanto, which later became Pharmacia through a merger; the pharmaceuticals portion of that company was subsequently acquired by Pfizer.
    When Solutia filed for Chapter 11 protection in 2003, it sued Pharmacia, as successor to its corporate parent, saying it had been improperly saddled with $475 million in retiree health, life and disability liabilities. That suit has been stayed while Solutia tries to negotiate a consensual reorganization plan.
    The lawsuit filed by the equity panel says the former parent, now Pharmacia, should be responsible for the environmental liabilities and goes further, saying Pharmacia "mislead public investors in Solutia" by not fully disclosing the size of the environmental liabilities.
    Pharmacia decided to spin off Solutia because when it was looking for buyers for the business, none of the interested parties would agree to assume the legacy liabilities "without a severe discount - as much as a billion dollars - to the purchase price," court papers said.
    Solutia has been in dispute with the EPA and its former parent over environmental cleanup claims for a number of different sites including one in Anniston, Ala., that had significant contamination

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