09:11, November 26, 2008
Huntsman sued the banks and Hexion’s parent, New York-based buyout firm Apollo Management LP, separately in Texas state court, claiming they wrongfully interfered with an earlier bid for the chemicals maker. Huntsman is seeking $3 billion in damages.
The banks last week asked to move the trial, scheduled for Feb. 9, to Oct. 5. District Judge Fred Edwards in Conroe moved it instead to May 11. Edwards scheduled a two-day hearing starting Jan. 12 on whether Texas has personal jurisdiction over Apollo and its partners Leon Black and Joshua Harris, who were named in the suit.
“That’s the key to the whole case, because I’m not going to try this three times and it makes no sense to try the banks’ case before the Apollo case,” Edwards said today in a hearing.
Apollo outbid Access unit Basell Holdings NV’s $25.25-a- share offer with a $28-a-share bid. In its suit, Huntsman accused Apollo and its partners of fraud and tortuous interference, claiming Hexion had no intention of closing the deal. The broken Access deal required Huntsman to pay a $200 million breakup fee.
“Huntsman is very happy with the result, because by the end of May all the litigation will be over in Delaware and New York,” Kathy Patrick, an attorney for the company, said after the hearing.
Hexion and Huntsman have traded lawsuits since June. Hexion sued Huntsman June 18 in Delaware Chancery Court in Wilmington, arguing the combined company would be insolvent and that its lenders were leery of financing the deal.
Delaware Chancery Court Judge Stephen Lamb on Sept. 29 agreed with Huntsman that a slump in chemical markets didn’t give Hexion the grounds to terminate the deal and ordered the company to honor the accord. On Oct. 27, the banks notified the companies they wouldn’t fund the deal. Hexion sued two days later in New York state court.
A trial is scheduled to begin Jan. 8 in the New York case. Lamb is scheduled to consider damages in the Delaware case May 4.
Lawyers for the banks urged Edwards to consolidate the Texas suits and delay a trial so the related actions in New York and Delaware could be resolved. Edwards hasn’t said whether he will consolidate the cases.
An appearance by the Apollo defendants at the May 11 trial will depend on Edward’s ruling on the personal jurisdiction issue, Patrick said. Lawyers for Apollo said today they will immediately appeal any finding against the buyout firm.
“We’re asking you to put all the parties in the same courtroom at the same time before the same jury,” Irvin Terrell, an attorney for the banks, said during the hearing. “This fight is three-sided. We’re not in bed with Hexion or Apollo, and we did not plan strategy with them. This is a very serious fight for billions of dollars.”
Huntsman fell 16 cents, or 2.5 percent, to $6.38 at 3:20 p.m. in New York Stock Exchange composite trading. The shares have plummeted 75 percent this year.