Huntsman Corp. files counterclaims to a suit filed by Hexion

03-Jul-08

Huntsman Corp. has filed its answer and counterclaims to a suit in Delaware concerning its souring merger deal with Hexion Specialty Chemicals. The counterclaims it had filed included breach of contract, breach of good faith and fair dealing, defamation, injurious falsehood, and commercial disparagement. Private equity firm Apollo Management and its affiliate Hexion sued Huntsman in June to limit their liability in case a planned merger deal between Huntsman and Hexion fell apart. After this, Huntsman sued Apollo and its partners, alleging they had dishonestly induced Huntsman to terminate a previous merger agreement with Dutch company Basell AF in order to forge a deal with Hexion. Hexion has said it considers Huntsman´s suit to be without merit. The company also said its board had provisionally authorized the right to extend the merger agreement with Hexion by an additional 90 days to October 2, 2008. Huntsman asked the Delaware court to declare that the premature and inappropriately released Duff & Phelps opinion does not excuse Hexion from its obligations, that it will in fact be possible to provide Hexion's lenders with assurance of solvency, and to declare that no material adverse effect has occurred under the merger agreement. Huntsman asked the court to enjoin Hexion from continuing to breach the merger agreement and to order Hexion to specifically perform its obligations under the merger agreement.