The three bondholders that attempted to force Huntsman Polymers Corp. into bankruptcy in late February have sold their share of Huntsman debt to Credit Suisse First Boston, the investment bank that already controlled almost three-fourths of that debt.
Costa Brava Partnership III LP, Iggy LLC and Western Financial Co. reached a deal with Credit Suisse on Feb. 27. The three bondholders had held about $1.6 million of Huntsman Polymers' total corporate debt of $174 million. Credit Suisse now holds about $127 million of that amount.
The bondholders disclosed the Credit Suisse deal in documents filed March 6 in U.S. Bankruptcy Court in Wilmington, Del.
According to the filing, the firms said they attempted to force Huntsman Polymers into involuntary bankruptcy after Huntsman missed a debt payment in December.
Huntsman was unable to make that payment because of difficult business conditions that led to it losing $35 million from ongoing operations and another $140 million in a one-time expense related to a plant closing and restructuring in the first nine months of 2001. Full-year results were unavailable.
Huntsman spokesman Don Olsen said March 8 that the bankruptcy petition had been dismissed. He added that the three bondholders' share of the missed payment would have been about $94,000.
Huntsman officials had criticized the bankruptcy filing as being ``totally without merit.''
The March 6 filing also states that the three bondholders were negotiating with Huntsman Polymers and Credit Suisse before making their filing, but is unclear why they decided to go through with the petition.
Creditors and customers that had started to pull back from doing business with Huntsman Polymers after the Feb. 27 bankruptcy petition still are doing business with the company, Olsen said.
``It took a lot of scrambling on our part,'' Olsen said. ``But once we assured [creditors and customers] there was no credit to this claim, they came back.''
Huntsman Polymers, based in Odessa, Texas, produces polyethylene, polypropylene and specialty resins. The company is a division of Salt Lake City-based specialty chemicals firm Huntsman Corp.
In the first nine months of 2001, Huntsman Polymers posted sales of $381 million. Huntsman Corp. sales for all of 2001 were $8.5 billion.