Lyondell lawsuit settlement not supported by creditors

Lyondell Chemical has announced that it has settled the lawsuit brought by unsecured creditors against bank lenders, but it has been variously reported that the creditors do not support the agreement. The settlement, which still requires court approval, will give unsecured creditors just $300 million cash when the company emerges from bankruptcy.

The deal was made as a trial date neared this Thursday (10 December). It gives creditors the right to pursue claims against third parties but reiterates that, under bankruptcy law, Lyondell owns the creditors' claims and has the right to settle. The committee of unsecured lenders had put in claims of $3-5 billion.