================================================================= CHEMTURA BANKRUPTCY NEWS Issue Number 3 ----------------------------------------------------------------- Copyright 2009 (ISSN XXXX-XXXX) March 27, 2009 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- CHEMTURA BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Dulce Amor Mumar, Ivy B. Magdadaro, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of CHEMTURA BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00029] U.S. TRUSTEE APPOINTS UNSECURED CREDITORS COMMITTEE [00030] DEBTORS' MOTION FOR POSTPETITION INTESA GUARANTEE PACT [00031] DEBTORS' MOTION TO PAY SHIPPERS & WAREHOUSEMEN CLAIMS [00032] DEBTORS' MOTION TO CONTINUE TO HONOR CUSTOMER PROGRAMS [00033] DEBTORS' MOTION TO CONTINUE INSURANCE PROGRAMS [00034] DEBTORS' MOTION TO OBTAIN UP TO $140MM IN DIP FINANCING [00035] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00036] DEBTORS' MOTION FOR INJUNCTION AGAINST UTILITY PROVIDERS [00037] DEBTORS' MOTION TO TAP ALVAREZ & MARSAL AS CRISIS MGRS. [00038] DEBTORS' APPLICATION TO TAP LAZARD AS INVESTMENT BANKER [00039] DEBTORS' APPLICATION TO TAP WOLFBLOCK AS COUNSEL [00040] DEBTORS' APPLICATION TO HIRE KURTZMAN AS NOTICING AGENT KEY DATE CALENDAR ----------------- 03/18/09 Voluntary Chapter 11 Petition Date 04/02/09 Deadline to File Schedules of Assets and Liabilities 04/02/09 Deadline to File Statement of Financial Affairs 04/02/09 Deadline to File Lists of Contracts and Leases 04/17/09 Deadline to Provide Utilities with Adequate Assurance 06/16/09 Deadline to Remove Actions Pursuant to F.R.B.P. 9027 07/16/09 Expiration of Debtors' Exclusive Plan Proposal Period 07/16/09 Deadline to Make Decisions About Lease Dispositions 09/14/09 Expiration of Debtors' Exclusive Solicitation Period 03/18/11 Deadline for Debtors' Commencement of Avoidance Actions First Meeting of Creditors under 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00029] U.S. TRUSTEE APPOINTS UNSECURED CREDITORS COMMITTEE ----------------------------------------------------------------- Diana G. Adams, the U.S. Trustee for Region 2, appoints nine parties-in-interest as members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Chemtura Corporation and its 26 debtor affiliates: (1) U.S. Bank National Association Indenture Trustee 60 Livingston Avenue St. Paul, MN 55107 Attn: Cindy Woodward Vice President Tel No. (651) 495-3907 Fax No. (651) 495-8100 (2) The Bank of New York Mellon Trust Company Indenture Trustee 6525 West Campus Oval Road Suite 200 New Albany, Ohio 43054 Attn: Donna J. Parisi Vice President Tel No. (614) 775-5279 Fax No. (614) 775-5636 (3) Pension Benefit Guaranty Corporation 1200 K Street NW Washington, DC 20005-4026 Attn: Suzanne Kelly Financial Analyst Tel No. (202) 326-4070 x6367 Fax No. (202) 842-2643 (4) Manufacturers & Traders Trust Co. 25 South Charles Street, 16th Floor Baltimore, MD 21201 Attn: Vincent J. Marriott, III Counsel Tel. No. (410) 244-4238 Fax No. (410) 244-4236 (5) Riversource Investments, LLC 216 Ameriprise Financial Center Minneapolis, MN 55474 Attn: Mark Van Holland Vice President Tel No. (612) 678-1716 Fax No. (612) 547-2694 (6) Federated Investment Management Company Federated Investors Tower 1001 Liberty Avenue Pittsburgh, PA 15222-3779 Attn: B. Anthony Delserone Jr. Vice President Tel No. (412) 288-8659 Fax No. (412) 288-6737 (7) Occidental Chemical Corporation 5005 LBJ Freeway Dallas, Texas 75244-6119 Atnn: Gary D. Lee, Jr. Manager Credit Services Tel No. (972) 404-3627 Fax No. (972) 404-3551 (8) Entergy Arkansas, Inc. 639 Loyola Avenue, 26th Floor New Orleans, LA 70113 Attn: Alan H. Katz General Counsel Tel No. (504) 576-2240 Fax No. (281) 297-5342 (9) WS Packaging, Inc. 2571 S. Hemlock Road Green Bay, WI 54229 Attn: Brenda Bomber Corporate Credit Manager Tel No. (920) 866-6363 Fax No. (920) 866-6482 ----------------------------------------------------------------- [00030] DEBTORS' MOTION FOR POSTPETITION INTESA GUARANTEE PACT ----------------------------------------------------------------- Chemtura Corporation Chief Financial Officer Stephen Forsyth relates that certain of the Debtors' European subsidiaries participate in a program to sell certain of their eligible accounts receivable, otherwise referred to as the European Accounts Receivable Facility. The European Subsidiaries sell their accounts receivables to Intesa Mediofactoring SpA in exchange for an amount equal to the face value of the receivables. This arrangement permits the European Subsidiaries to receive advance payment on account of the sold receivables that have not been collected. However, the decline in the Debtors' financial performance constrained their ability to access liquidity under the European AR Facility. Intesa Mediofactoring imposed restrictions in the European Subsidiaries' ability to sell accounts under the European AR Facility, according to Mr. Forsyth. Thus, in order to address Intesa Mediofactoring's concerns, the parties entered into negotiations. By February 2009, Intesa proposed to restore the AR Facility with certain adjustments. Among others, the maximum value of accounts receivable available to be sold under the AR Facility was reduced to EUR70 million and Chemtura Corporation was required to guarantee the obligations of the European Subsidiaries. At present, to preserve the value of their global operations, the Debtors seek the Court's permission to enter into an agreement with Intesa pursuant to which Chemtura Corp. will guarantee the obligations of the European Subsidiaries under the AR Facility on a postpetition basis. The salient terms of the Postpetition AR Guarantee Agreement are: (a) Chemtura Corp. will not dispose of its direct or indirect part of all of its ownership interest in the European Subsidiaries without having first advised Intesa in writing; (b) Chemtura Corp. will continue to provide financing and managerial support to the European Subsidiaries to allow them to meet obligations under the European AR Agreement; and (c) Chemtura Corp. will unconditionally reimburse Intesa, up to a total of EUR70 million on written demand, any and all amounts owed for any reason to Intesa by the European Subsidiaries pursuant to the terms of the European AR Agreement. The parties agree that should Intesa file an action against Chemtura with respect to its obligations under the Prepetition AR Guarantee, it will submit to the jurisdiction of a court in Milan, Italy, and be governed by the laws of Italy. The success of the Debtors' restructuring efforts is closely tied to the fate of the European Subsidiaries and other subsidiaries outside the U.S., Mr. Forsyth maintains. He discloses that of the Debtors' $3.5 billion in net sales in 2008, about 32% came from customers in Europe and Africa. * * * The Court granted the Debtors' request, on an interim basis. Final hearing is set for April 13, 2009. Objections are due April 6. ----------------------------------------------------------------- [00031] DEBTORS' MOTION TO PAY SHIPPERS & WAREHOUSEMEN CLAIMS ----------------------------------------------------------------- The Debtors require the delivery of raw materials on a regular basis for the production and distribution of their finished products throughout North America and overseas. They employ an intricate distribution network that uses both foreign and domestic third party carriers. Moreover, the Debtors' pricing policies, marketing strategies and fundamental business operations rely on their ability to receive raw materials and distribute finished products in a timely fashion. Against this backdrop, the Debtors engage: (a) domestic common carriers, truckers, rail carriers, barge owners and stevedores to deliver raw materials to their production facilities and distribute finished products to their customers; (b) third-party contractors like lease terminals and tank farms to store raw materials and finished products; (c) third-party processors to manufacture or finish goods to their exact specifications using the Debtors' proprietary technology, trade secrets and other intellectual property and production equipment; (d) several third-party logistics coordinators who manage the transport of their raw materials and finished products. In many instances, the Debtors' payments to Possessory Lien Holders are coordinated by and funded through the Logistics Coordinators on a pass-through basis; and (e) third parties for the maintenance and repair of machinery and equipment used at their facilities, as well as the facilities themselves. M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, the Debtors' proposed counsel, relates that under the laws of most states, shippers, warehousemen and processors are entitled under certain circumstances to possessory or statutory liens on the goods in their possession, which goods secure the charges or expenses incurred in connection with the transportation or storage of the goods. Applicable state law also allows parties maintaining and repairing a debtor's real and personal property have a right to assert and perfect liens that attach to the Debtors' real and personal property, she says. The Debtors relate that as of the Petition Date, they owe these estimated obligations: Lien Holder Amount ----------- --------- Shippers $95,000 Warehousemen 606,000 Processors 2,940,000 Lien Claimants 1,060,000 If the Debtors do not pay prepetition ordinary course obligations, the Possessory Lien Holders might refuse to deliver or release the property to the Debtors until they are paid, Ms. Labovitz notes. Statutory lien claimants also may assert and perfect liens against the Debtors' property. "This outcome," according to Ms. Labovitz, "could cause significant disruptions to the operation of the Debtors' business that would impede operations." Accordingly, the Debtors sought and obtained the Court's authority, on an interim basis, to pay their prepetition obligations to shippers, warehousemen, processors and lien claimants. The Court also authorized financial institutions to honor all related checks and electronic payment requests. The Court will consider the Debtors' request on a final basis on April 13, 2009. Objections must be filed no later than April 6. ----------------------------------------------------------------- [00032] DEBTORS' MOTION TO CONTINUE TO HONOR CUSTOMER PROGRAMS ----------------------------------------------------------------- The Debtors sell more than 3,500 chemical products to various dealers, distributors and major retailers, who in turn market and sell those products and formulations to the commercial public. To develop and sustain their reputation and to support their worldwide sales efforts, the Debtors maintain programs, in the ordinary course of business, to generate goodwill, meet competitive market programs, and ensure customer and commercial public satisfaction. The Debtors utilize various rebate programs to enhance product loyalty among their existing customers and attract new customers. The specific terms of the Rebate Programs are proprietary and confidential and are disclosed in Court papers but overall, they include volume rebates, growth rebates, co-op allowances and a broad variety of other allowances and incentives. The Debtors also offer customers a variety of other rebates, including stocking allowances, in-season allowances, inventory protection for crop and consumer products, brand incentives, consumer loyalty payments and discounts, business planning incentive rebates and sales achievement incentive rebates. The Debtors inform the Court that they accrued about $45 million worth of obligations to Customers on account of the 2008 Rebate Programs. Of this amount, about $6.6 million remained outstanding as of the Petition Date. The Debtors add that as of February 28, 2009, they have accrued approximately $9.5 million in obligations to Customers on account of the 2009 Rebate Programs. Of this amount, some $9 million remained outstanding as of the Petition Date. The Debtors aver, however, that a very significant portion of their obligations under the Rebate Programs will never be paid to customers in cash, but will be offered as credits against the future purchases of those customers. Accordingly, the Debtors sought and obtained the Court's authority, on an interim basis, to maintain the Customer Programs in the ordinary course of business and honor related prepetition commitments. In line with this, financial institutions are directed to receive, process, honor and pay all checks presented for payment and electronic payment requests relating to the Customer Programs. The Court clarified that the Debtors will inform the Office of the U.S. Trustee for Region 2 if a customer redeems a credit that was issued prepetition prior to entry of the final order on the Debtors' request. The Court will convene a final hearing on for April 13, 2009. Objections are due April 6. Absent timely objections to the Debtors' request, the Interim Customer Program Order will become a final order nunc pro tunc to March 18, 2009 without further Court hearing or ruling. ----------------------------------------------------------------- [00033] DEBTORS' MOTION TO CONTINUE INSURANCE PROGRAMS ----------------------------------------------------------------- The Debtors maintain a comprehensive insurance program for coverage in connection with the operation of their businesses and the management of their properties. The program includes insurance coverage for directors' and officers' liability, property and business interruption, aircraft liability, executive risk coverage, crime, pension trust liability, general liability, automobile liability, excess liability, pollution liability, international liability, and cargo and surety bonds. A list of the Debtors' Insurance Policies in effect as of the Petition Date can be accessed at no charge at: http://bankrupt.com/misc/chemtura_InsrncPolicies.pdf The Debtors disclose that they pay $18 million annually for premium, taxes and fees in connection with their Insurance Program. According to Stephen Forsyth, Executive Vice President and Chief Financial Officer of Chemtura Corporation, no outstanding prepetition insurance premium obligations are due as of the Petition Date. The Debtors believe that they do not need Court approval to continue to administer their Insurance Program or pay any prepetition insurance premium obligations that may exist. Nevertheless, out of the abundance of caution, the Debtors seek the Court's authority to continue to administer their prepetition insurance coverage policies and practices. They also ask the Court to authorize financial institutions to honor all related checks and electronic payment requests. ----------------------------------------------------------------- [00034] DEBTORS' MOTION TO OBTAIN UP TO $140MM IN DIP FINANCING ----------------------------------------------------------------- See prior entry at [00010]. In line with Interim DIP Order and the Debtors' request for the entry of a final order authorizing a postpetition financing, the Debtors filed with the Court a 13-week cash flow forecast for the period from March 20, 2009 to June 12, 2009. A copy of the 13-week cash flow forecast ending June 12, 2009 is available for free at: http://bankrupt.com/misc/chemtura_cashflowforecast.pdf ----------------------------------------------------------------- [00035] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- See prior entry at [00008]. Motion granted. ----------------------------------------------------------------- [00036] DEBTORS' MOTION FOR INJUNCTION AGAINST UTILITY PROVIDERS ----------------------------------------------------------------- See prior entry at [00021]. Eric Lopez Schnabel, Esq., at Dorsey & Whitney LLP, in New York, informs the Court that Entergy Gulf States Louisiana, L.L.C.; Entergy Louisiana, LLC; and Entergy Arkansas, Inc., will take the oral deposition of the Debtors on March 31, 2009, at 1:00 p.m. in the offices of Dorsey & Whitney LLP, in New York. The Debtors will designate one or more officers, directors, managing agents, or other persons most knowledgeable to testify concerning the matters relating the Debtors' Utility Injunction Motion. ----------------------------------------------------------------- [00037] DEBTORS' MOTION TO TAP ALVAREZ & MARSAL AS CRISIS MGRS. ----------------------------------------------------------------- See prior related entry at [00025] (Chemtura to Retain R. Dombrowski as Restructuring Officer). The Debtors seek the Court's authority to employ Alvarez & Marsal North America, LLC, and its subsidiaries, agents, independent contractors and employees, as crisis managers nunc pro tunc to the Petition Date. The Debtors also seek Court authority to appoint Ray Dombrowski, a managing director of A&M, as their chief restructuring officer nunc pro tunc to the Petition Date. Before the Petition Date, the Debtors engaged A&M as their restructuring consultant to assist them with certain financial issues. The Debtors further relate that the agent for the proposed DIP lenders require them to employ the services of a restructuring advisory firm and a chief restructuring officer as a condition to the postpetition financing commitment. Accordingly, on the Petition Date, the Debtors and A&M entered into a second engagement letter, a copy of which is available for free at: http://bankrupt.com/misc/chemtura_2ndEnggmtnLtr_Alvarez.pdf Pursuant to the Second Engagement Letter, Mr. Dombrowski will serve as the Debtors' CRO after the Petition Date. A&M will also provide other A&M employees to support Mr. Dombrowski and the Debtors' management team in their restructuring efforts during these Chapter 11 cases. The Second Engagement Letter also provides that the CRO, together with any Additional Personnel: (a) in cooperation with the Debtors' chief executive officer and chief financial officer, will perform a financial review of the Debtors, including a review and assessment of financial information that has been, and that will be, provided by the Debtors to their creditors, including its short and long-term projected cash flows; (b) will assist in identifying cost reduction and operations improvement opportunities, develop and report on cash management activities and compliance with the covenants under the DIP Financing; (c) will assist the CEO in developing for the Board's review possible restructuring plans or strategic alternatives for maximizing the enterprise value of the Debtors' various business lines, including assisting with any asset sales; (d) will serve as the principal contact with the Debtors' creditors regarding the Debtors' financial and operational matters, and will act as contact for the Debtors and Prepetition lenders, as well as the unsecured creditors committee and any other statutory or ad hoc committee that may be formed; (e) will assist in developing and preparing a Chapter 11 plan of reorganization, will assist in preparing schedules of assets and liabilities and statements of financial affairs, and will assist in the claims management process; and (f) will perform other services as requested or directed by the Board and CEO and agreed to by that officer. The Debtors will pay the CRO a $150,000 monthly fee for his services. They will also pay for the services of the A&M professionals according to this hourly rate: Professional Hourly Rate ------------ ------------ Managing Directors $700 to $800 Directors $500 to $700 Associates $350 to $500 Analysts $250 to $350 The Debtors also propose to entitle A&M to a $3,000,000 incentive compensation payable on the earlier of: (i) the consummation of a chapter 11 reorganization plan, or (ii) the sale, transfer or other disposition of all or a substantial portion of the assets or equity of the Debtors in one or more transactions. The Debtors will also reimburse A&M for reasonable out-of-pocket expenses incurred in connection with the firm's representation of the Debtors. They will also reimburse A&M and its counsel for fees and expenses incurred in negotiating and preparing the Second Engagement Letter. A&M will not take a retainer except as to any amounts remaining after crediting time against the $300,000 retainer under its First Engagement Letter with the Debtors. Moreover, the Debtors will indemnify and hold harmless A&M, its affiliates and their respective shareholders, members, managers, employees, agents, representatives, and subcontractors under certain circumstances, pursuant to an Indemnification Agreement, a full-text copy of which is available for free at: http://bankrupt.com/misc/chemtura_indemnification.pdf Before the Petition Date, the Debtors have paid A&M about $246,000. As of the Petition Date, the Debtors do not owe the firm any prepetition amounts. Because A&M is not being employed as a professional under Section 327 of the Bankruptcy Code, it will not be submitting quarterly fee applications pursuant to Sections 330 and 331 of the Bankruptcy Code, the Debtors inform the Court. A&M, however, will submit quarterly reports of compensation paid. The parties agree to resolve their disputes based on a set of uniform procedures, a full-text copy of which is available for free at http://bankrupt.com/misc/chemtura_disputeresoltnpcdrs.pdf Ray Dombrowski, in an affidavit filed in Court, disclosed these information: 1. The father-in-law of one of the junior members of the Additional Personnel owns a business whom the Debtors owe about $57,000. Out of an abundance of caution, A&M will institute procedures to screen this member of the Additional Personnel from any matters that could create a possible conflict of interest. 2. A&M has provided and could reasonably be expected to provide services unrelated to the Debtors' cases for certain entities that are potential parties-in-interest to the Debtors. Mr. Dombrowski nevertheless maintains that A&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. ----------------------------------------------------------------- [00038] DEBTORS' APPLICATION TO TAP LAZARD AS INVESTMENT BANKER ----------------------------------------------------------------- The Debtors ask the Court for permission to employ Lazard Freres & Co. LLC as their investment banker nunc pro tunc to the Petition Date, pursuant to the terms of an engagement letter dated February 15, 2009. As investment banker, Lazard will assist the Debtors in evaluating strategic alternatives and will render investment banking services in connection with the Debtors' ongoing restructuring efforts. Specifically, Lazard will: (a) review and analyze the Debtors' business, operations and financial projections; (b) evaluate the Debtors' potential debt capacity in light of its projected cash flows; (c) assist in determining a capital structure for the Debtors; (d) assist in determining a range of values for the Debtors on a going concern basis; (e) advise the Debtors on tactics and strategies for negotiating with the stakeholders; (f) render financial advice to the Debtors and participate in meetings or negotiations with stakeholders and rating agencies or other appropriate parties in connection with the restructuring; (g) advise the Debtors on the timing, nature and terms of new securities, other consideration or other inducements to be offered pursuant to the restructuring; (h) advise and assist the Debtors in evaluating potential financing transactions by the Debtors; (i) assist the Debtors in preparing documentation within Lazard's area of expertise that is required in connection with the restructuring; (j) attend meetings of the Debtors' Board of Directors and its committees with respect to matters on which Lazard has been engaged to advise the Debtors; (k) provide testimony, as necessary, with respect to matters in which Lazard has been engaged to advise the Debtors in any proceeding before the Court; and (l) provide the Debtors with other financial restructuring advice. The Debtors propose to entitle Lazard to monthly fees, restructuring fee and financing fees: 1. A monthly fee of $250,000 will be payable to Lazard on the first day of each month until the earlier of the consummation of the Debtors' Restructuring or the termination of Lazard's engagement. One-half of each Monthly Fee paid relating to any month after August of 2009 will be credited against the Restructuring Fee. Lazard will also be entitled to a minimum of $1,000,000 in monthly fees without regard to the outcome of any restructuring or any termination by the Debtors. 2. A fee of $7,000,000 will be payable to Lazard upon consummation of any Restructuring of the Debtors in their bankruptcy proceedings. 3. A fee equal to the amount set forth in the Engagement Letter will be payable to Lazard upon consummation of any financing. One-half of any Financing Fee paid will be credited against any Restructuring Fee subsequently payable. More than one Financing Fee may be payable. The Debtors disclose that the fee structure has been agreed upon by the parties in anticipation that a substantial commitment of professional time and effort will be required of Lazard and its professionals. Regardless of whether any transaction occurs, the Debtors will reimburse Lazard for all reasonable expenses the firm incurred and will incur in connection with its engagement. A full-text copy of the Lazard engagement letter is available for free at: http://bankrupt.com/misc/chemtura_enggmntletterLazard.pdf The Debtors have agreed to indemnify, hold harmless and defend Lazard and its affiliates and their officers and members. Prior to the Petition Date, the Debtors paid Lazard $1,500,000. As of the Petition Date, the Debtors aver that they do not owe any prepetition amounts to Lazard. Daniel M. Aronson, a managing director of Lazard Freres & Co. LLC, in New York, maintains that his firm is a disinterested person as that term is defined under Section 101(14) of the Bankruptcy Code, as required by section 327(a) of the Bankruptcy Code. ----------------------------------------------------------------- [00039] DEBTORS' APPLICATION TO TAP WOLFBLOCK AS COUNSEL ----------------------------------------------------------------- On the Petition Date, the Debtors sought the Court's permission to employ Kirkland & Ellis LLP as lead counsel in their Chapter 11 cases. K&E, however, is aware of certain conflicts of interest. M. Natasha Labovitz, Esq., a partner at Kirkland & Ellis, in New York, has disclosed that her firm will not commence a cause of action against its current client who is a party-in- interest to the Debtors' Chapter 11 cases, unless her firm receives a waiver from the current client allowing K&E to commence that action or K&E is no longer representing the current client in any matters. In this light, the Debtors seek to employ WolfBlock LLP to handle matters that are not appropriately handled by K&E or other counsel because of actual or potential conflict of interest issues or matters that the Debtors, K&E, or the Debtors' other counsel may ask Wolfblock to handle. The Debtors relate that WolfBlock is already familiar with their operations and businesses as the firm has represented the Debtors before the Petition Date. At request of the Debtors, K&E, or the Debtors' other counsel, WolfBlock will: (a) advise the Debtors on their powers and duties as debtors- in-possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (c) take necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including objections to claims filed against the estates; (d) prepare motions, applications, answers, orders, appeals, reports and papers necessary to the administration of the Debtors' estates; (e) take any necessary action on behalf of the Debtors to obtain approval of a Disclosure Statement and confirmation of one or more Chapter 11 plans; (f) represent the Debtors in connection with obtaining postpetition financing; (g) advise the Debtors in connection with any potential sale of assets; (h) advise the Debtors on the rights of offset and the applicability of the "safe harbor" provisions of the Bankruptcy Code; (i) appear before the Court, any appellate courts and the United States Trustee, and protect the interests of the Debtors' estates before those Courts and the United States Trustee; (j) consult with the Debtors regarding tax matters; and (k) perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with these cases, including: -- analysis of the Debtors leases and executory contracts and the assumption, rejection or assumption and assignment of those contracts; -- analysis of the validity of liens against the Debtors' interests in property, and -- advice on corporate, litigation, employment, intellectual property, governmental investigatory, regulatory and environmental matters. The Debtors will pay WolfBlock for its services based on these customary rates: Professional Hourly Rate ------------ ----------- Partners $395 to $650 Counsel $300 to $450 Associates $250 to $385 Paraprofessionals $150 to $250 As of the Petition Date, the Debtors maintain that they do not owe WolfBlock any amounts for prepetition legal services rendered. The Debtors believe that rather than resulting in any extra expense to their estates, the retention of WolfBlock as conflicts counsel will promote the effective and economical representation of their causes in these Chapter 11 cases. K&E and WolfBlock will coordinate their efforts to avoid duplication of legal services, according to the Debtors. Gerard S. Catalanello, Esq., a partner at WolfBlock LLP, in New York, says his firm is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. ----------------------------------------------------------------- [00040] DEBTORS' APPLICATION TO HIRE KURTZMAN AS NOTICING AGENT ----------------------------------------------------------------- The Debtors sought and obtained the Court's permission to employ Kurtzman Carson Consultants LLC as their notice and claims agent in their Chapter 11 cases under the terms of a Services Agreement dated February 27, 2009. Stephen C. Forsyth, executive vice president and chief financial officer of Chemtura Corporation, relates that the Debtors have approximately 50,000 potential creditors. Although the Office of the Clerk of the United States Bankruptcy Court for the Southern District of New York ordinarily would serve notice on the Debtors' creditors and other parties-in-interest and administer claims against the Debtors, the Clerk's Office may not have the resources to undertake those tasks in light of the number of the Debtors' creditors and the tight timelines in Chapter 11 cases. Section 156(c) of the Bankruptcy, which governs the staffing and expenses of bankruptcy courts, authorizes the Court to use facilities or services other than the Clerk's Office for administration of bankruptcy cases, cites M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, the Debtors' proposed counsel. As notice and claims agent, Kurtzman Carson will: (a) notify all potential creditors of the Debtors' bankruptcy petition filing and of the setting of the first meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code; (b) prepare and serve required notices in the Debtors' Chapter 11 cases, including: -- notices of objections to claims, if necessary; -- notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and -- other miscellaneous notices as the Debtors or Court may deem necessary or appropriate for an orderly administration of these Chapter 11 cases; (c) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amounts owed; (d) provide access to the public for examination copies of the proofs of claim or proofs of interest filed in these Chapter 11 cases without charge during regular business hours; (e) furnish a notice of the last date for the filing of proofs of claim and a form for the filing of a proof of claim, after the notice and form are approved by the Court; (f) file with the Office of the Bankruptcy Clerk an affidavit or certificate of service, which includes a copy of the notice, a list of persons to whom it was mailed, and the date and manner mailed, within 10 days of service; (g) docket all claims received by the Clerk's Office, maintain the official claims registers for each Debtor on behalf of the Clerk's Office, and provide the Clerk's Office with certified duplicate, unofficial Claims Registers on a monthly basis, unless otherwise directed; (h) record all transfers of claims, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure, and provide notices of those transfers; (i) specify, in the applicable Claims Register, for each claim docketed, the claim number assigned, the date received, the name and address of the claimant and agent who filed the claim, and the classifications of the claim; (j) relocate, by messenger, all of the actual proofs of claim filed with the Court to KCC, not less than weekly; (k) turn over to the Clerk's Office copies of the Claims Register for review, upon completion of the docketing process for all claims received for each case by the Clerk's Office; (l) make changes in the Claims Registers pursuant to Court order; (m) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list will be available upon request by a party-in-interest or the Clerk's Office; (n) assist with solicitation and calculation of votes and distribution in furtherance of confirmation of plan of reorganization; (o) provide other claims processing, noticing and administrative services as may be requested from time to time by the Debtors; (p) file with the Court the final version of the Claims Register immediately before the closing of the Chapter 11 cases; and (q) box and transport all original documents, in proper format, to the Federal Archives Record Administration in Lee's Summit, Missouri, at the close of the cases. Kurtzman Carson will also assist the Debtors with: -- maintaining and updating the master mailing lists of creditors; -- gathering data in conjunction with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs; -- tracking and administration of claims; and -- other administrative tasks pertaining to the administration of these Chapter 11 cases as may be requested by the Debtors or the Clerk's Office pursuant to the terms of the Services Agreement. The Debtor will pay Kurtzman Carson for its services pursuant to the terms under their Service Agreement, a full-text copy of which is available for free at: http://bankrupt.com/misc/chemtura_KCCServicePact.pdf The Debtors will also reimburse Kurtzman Carson for reasonable expenses. Moreover, the Debtors will indemnify and hold harmless KCC and its affiliates, members, directors, officers, employees, consultants, subcontractors and agents under the circumstances specified in the Services Agreement, except under circumstances arising from to gross negligence or willful misconduct. The firm received a one-time $50,000 retainer fee from the Debtors last March 3, 2009. Michael J. Frishberg, vice president of corporate restructuring services of Kurtzman Carson Consultants, in El Segundo, California, assures the Court that his firm does not hold or represent an interest adverse to the Debtors' estates. He adds that Kurtzman Carson does not have any connection to the Debtors, their creditors or other relevant parties. *** End of Issue No. 3 ***