Solutia Inc., a leading manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, announced today that it and 14 of its United States subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Solutia's affiliates outside the United States were not included in the Chapter 11 filing. Solutia has approximately 6,700 employees worldwide.
During the Chapter 11 proceedings, Solutia's worldwide operations will operate without interruption. The company has taken steps to ensure continued supply of goods and services to its customers. In that regard, Solutia has received a commitment for up to $500 million in new debtor-in-possession (DIP) financing, $350 million of which will replace Solutia's current senior credit facility. Upon court approval, the DIP financing, combined with the company's cash from operations, will provide sufficient funding for operations during the Chapter 11 process. Vendors will be paid in full for all goods furnished and services provided after the filing date as required by the Bankruptcy Code. The company has requested court approval to continue to pay employees without disruption and in the same manner as before the filing, and expects the request to be granted as part of the court's "first day" orders.