Investor Len Blavatnik and his company Access Industries have refuted claims that he was aware of a US$12 bln leveraged buyout in 2007 that created LyondellBasell would fail, as per Reuters. They claim that they had every reason to believe the merger between Basell and Lyondell would succeed. Blavatnik had led the merger in 2007 to create the world's third largest petrochemicals maker, by crafting a leveraged buyout of Lyondell through Basell, which his company acquired in 2005.
A trustee acting on behalf of Lyondell's creditors sued Blavatnik, Access and other executives and advisors responsible for putting together the deal, claiming they set the company up to fail by leaving it with too much debt and unreasonably small capital.
Blavatnik and Access have said "This lawsuit has been brought by the trustee using 20/20 hindsight," Blavatnik and Access said in a response filed. "The unprecedented economic climate of 2008 was not foreseeable at the time of the merger."
By the time Lyondell filed for bankruptcy during a liquidity crisis in January 2009, Access and Blavatnik had about US$5-7 bln of capital at risk in the company.
Deutsche Bank Securities Inc, which acted as an advisor to Lyondell on the merger, also filed papers seeking dismissal of the claims.