(November 10, 2008 (7:40a) - Status Report) This transaction has taken yet another significant step towards oblivion with the release of a deposition by Credit Suisse official Malcolm Price filed with the New York Supreme Court on November 3, 2008. This document essentially claims that the companies withheld critical details regarding the solvency opinion required under the terms of the financing commitment, as well as pointing out that the methods under which the solvency opinion was obtained, via a third-party not retained by the lending banks, are extremely unusual, if not unheard of, in these situations.
It will be stated at this point that the legal aspect of this transaction have become complex to the point where attempt to confidently assess the outcome -- by any source, legal or otherwise -- is probably an act of futility. The only clear aspect at this stage is that all three parties are now becoming so deeply entrenched in legal maneuvering that the only favorable outcome for all involved is to dispose of this conflict via a negotiated settlement. Failure to reach a settlement will, again, very likely result in litigation that is likely to continue well into the foreseeable future and beyond.
That being said, reports again surfaced late last week that negotiations have been in process for a revised deal. However, these reports indicate that HUN is currently unwilling to settle for a buyout price under the $25 level, which is probably much higher than Hex/Apollo's highest acceptable level and beyond the level in which the banks will reverse their stance on financing. Thus, even with HUN's leveraged position, it must be assumed that a stalemate exists between the parties at present.
With a January 8 trial date still docketed in New York, the companies and the banks have two months to reach a mutually agreeable settlement or face the prospect of one of the more lengthy, difficult, and damaging litigation processes in recent history. It must be assumed that the prospect of this will ultimately convince all parties to renegotiate or terminate the deal before the end of this year.
