Notice of Conference Call for Institute Members Who Held Lyondell Chemical Company Stock on December 20, 2007

 

 

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July 13, 2009

TO: EXCHANGE-TRADED FUNDS
SEC RULES COMMITTEE No. 42-09
SMALL FUNDS COMMITTEE No. 12-09     RE: NOTICE OF CONFERENCE CALL FOR INSTITUTE MEMBERS WHO HELD LYONDELL CHEMICAL COMPANY STOCK ON DECEMBER 20, 2007

 

As you may be aware, the Lyondell Chemical Company (“Lyondell”) was purchased by Basell AF S.C.A. on December 20, 2007, through a leveraged buyout in which each of Lyondell’s outstanding shares of common stock was converted into the right to receive $48 in cash.  Approximately one year later, Lyondell, its corporate parent, and other related entities declared bankruptcy.

 

On June 17th, a group of unsecured creditors in the Lyondell bankruptcy filed an application with the United States Bankruptcy Court for the Southern District of New York for leave to file an adversary proceeding.  Later this month, the judge in the case will review that application.

 

Included among the proposed causes of action is a claim against “all of the holders of common stock who received proceeds” in connection with the leveraged buyout.  The basic claim appears to be that the payment of the $48 per share to shareholders on December 20, 2007 was a fraudulent transfer that is recoverable by Lyondell’s debtors in bankruptcy.

 

Prior to its delisting following the leveraged buyout, Lyondell stock (NYSE:LYO) was a component of a number of widely utilized mid-cap indices.  As a result, a number of Institute members may have held Lyondell stock on December 20, 2007, and thus may have common interests as part of the defendant class if the bankruptcy judge grants the plaintiff’s application to file the complaint.

 

The Institute will hold an informational conference call on Wednesday, July 15 at 1:30 p.m. Eastern time for Institute members who held Lyondell stock on December 20, 2007.  The call is intended to provide these members a forum to discuss the case and the potential for a joint defense.

 

If you held Lyondell stock on December 20, 2007 and are interested in participating in the call on Wednesday, please RSVP to Maureen Maher at mmaher@ici.org or 202-326-5823.

 

Robert C. Grohowski
Senior Counsel
Securities Regulation - Investment Companies