================================================================= SOLUTIA BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2003 (ISSN XXXX-XXXX) December 18, 2003 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- SOLUTIA 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 Riza Marie Deloria, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any Re-mailing of SOLUTIA BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO SOLUTIA BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF SOLUTIA, INC. [00002] SOLUTIA'S CONSOLIDATED SEPTEMBER 30, 2003 BALANCE SHEET [00003] DEBTORS' PRESS RELEASE ANNOUNCING CHAPTER 11 FILINGS [00004] SOLUTIA DEBTORS' CHAPTER 11 DATABASE [00005] LIST OF THE DEBTORS' 50-LARGEST UNSECURED CREDITORS [00006] ORGANIZATIONAL MEETING TO FORM OFFICIAL COMMITTEES KEY DATE CALENDAR ----------------- 12/17/03 Voluntary Petition Date 01/02/04 Deadline for filing Schedules of Assets and Liabilities 01/02/04 Deadline for filing Statement of Financial Affairs 01/02/04 Deadline for filing Lists of Leases and Contracts 01/05/04 Organizational Meeting with UST to form Committees 01/06/04 Deadline to provide Utilities with adequate assurance 02/15/04 Deadline to make decisions about lease dispositions 03/16/04 Deadline to remove actions pursuant to F.R.B.P. 9027 04/15/04 Expiration of Debtors' Exclusive Plan Proposal Period 06/14/04 Expiration of Debtors' Exclusive Solicitation Period 12/__/05 Expiration of $500,000,000 DIP Financing Pact 12/17/05 Deadline for Debtors' Commencement of Avoidance Actions First Meeting of Creditors pursuant to 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO SOLUTIA BANKRUPTCY NEWS ----------------------------------------------------------------- SOLUTIA BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) SOLUTIA BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of SOLUTIA BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF SOLUTIA, INC. ----------------------------------------------------------------- Solutia, Inc. 575 Maryville Centre Drive P.O. Box 66760 St. Louis, Missouri 63166-6760 Telephone (314) 674-1000 http://www.solutia.com/ Solutia (NYSE: SOI) and its subsidiaries make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. Solutia organizes its business operations in two segments: (A) Performance Products & Services Segment -- approximately $1 billion in annual sales -- approximately 40% of total revenue -- approximately $100 million in annual profits Solutia's Performance Products and Services segment produces: * Performance Films. This product line includes plastic interlayer for laminated safety glass and custom-coated films for after-market automotive and architectural applications. Solutia markets its plastic interlayer under the SAFLEX(R) brand for use in automobile windshields. In addition, Solutia's interlayer is used in Enhanced Protective Glass and VANCEVA(TM) brand design systems for side and rear windows of vehicles. The Company brands plastic interlayer under the KEEPSAFE(R) and KEEPSAFE MAXIMUM(R) marks and uses it in VANCEVA(TM) brand design systems for architectural applications. In addition, the Company produces custom-coated window films, branded as LLUMAR(R) and VISTA(R), for professional after-market automotive and architectural applications and as GILA(R) for the do-it-yourself retail market. * Industrial Products. This product line includes specialty chemicals such as DEQUEST(R) water treatment chemicals, THERMINOL(R) heat transfer fluids and SKYDROL(R) aviation hydraulic fluids. * Pharmaceutical Services. This product line includes an array of integrated pharmaceutical development services ranging from process research to manufacturing, clinical trial services and advisory services, for leading pharmaceutical companies. (B) Integrated Nylon Segment -- approximately $1.4 billion in annual sales -- approximately 60% of total revenue -- approximately $60 million in annual losses Solutia's Integrated Nylon segment brings together an integrated family of nylon products: * Chemical intermediates are used as feedstock for fiber and resins production and are sold on the merchant market. * VYDYNE(R) and ASCEND(R) nylon polymers are sold to the engineered thermoplastic and apparel markets. * Fibers are sold under the WEAR-DATED(R) brand for use in carpet and upholstery for customers, the ULTRON(R) brand for commercial carpet and the ACRILAN(R) brand for knit apparel. Global Operations Solutia and its subsidiaries are engaged in manufacturing, sales and research and development in the United States, Europe, Canada, Latin America and Asia. The Company's general offices are located in a leased facility in St. Louis County, Missouri. The Company's principal European offices are located in Louvain La Neuve, Belgium, on land leased from the University of Louvain. Monsanto Spin-Off Transaction Solutia was incorporated in Delaware in April 1997 to hold most of the chemical businesses of the former Monsanto Company, now known as Pharmacia Corporation, and owned by Pfizer (NYSE: PFE). On September 1, 1997, Monsanto distributed Solutia's shares as a dividend to Monsanto's stockholders, and Solutia became an independent publicly held company. The detailed history of the transaction is: April 1, 1997 * Solutia was incorporated as a wholly owned subsidiary of Old Monsanto. September 1, 1997 * Old Monsanto entered into a Distribution Agreement with Solutia to transfer the operations, assets and liabilities of the Chemicals Business to Solutia. * Pursuant to the Distribution Agreement, Solutia assumed and was required to indemnify Old Monsanto (then known as Monsanto Company) for liabilities of the Chemicals Business, including pre-spin-off liabilities. * As a result of the Solutia spin-off, on September 1, 1997, Solutia became an independent publicly held company listed on the New York Stock Exchange. December 19, 1999 * Old Monsanto entered into a merger agreement with Old Monsanto & Upjohn, Inc. February 9, 2000 * New Monsanto was incorporated as a wholly owned subsidiary of Old Monsanto under the name "Monsanto Ag Company." March 31, 2000 * Effective date of the merger between Old Monsanto and PNU, whereby: (a) Upjohn became a wholly owned subsidiary of Old Monsanto; (b) Old Monsanto changed its name from "Monsanto Company" to "Pharmacia Corporation"; and (c) New Monsanto changed its name from "Monsanto Ag Company" to "Monsanto Company." September 1, 2000 * New Monsanto entered into a Separation Agreement with Old Monsanto to transfer the operations, assets and liabilities of the Ag Business to New Monsanto. * Pursuant to the Separation Agreement, New Monsanto agreed to indemnify Old Monsanto for any liabilities primarily related to the Ag Business or the Chemicals Business, including any liabilities assumed by Solutia pursuant to the Distribution Agreement, to the extent that Solutia fails to pay, perform or discharge those liabilities. October 23, 2000 * New Monsanto completed an initial public offering in which it sold approximately 15% of the shares of its common stock to the public. Old Monsanto continued to own 220 million shares of New Monsanto's common stock. July 1, 2002 * New Monsanto, Old Monsanto and Solutia entered into an amendment to the September 1, 1997 Distribution Agreement whereby Solutia agreed to indemnify New Monsanto for the same liabilities for which it had agreed to indemnify Old Monsanto under the Distribution Agreement. * New Monsanto and Old Monsanto entered into an agreement to clarify their rights and obligations relating to Solutia's indemnification obligations under the September 1, 2000 Separation Agreement. August 13, 2002 * Old Monsanto distributed its 220 million shares of New Monsanto common stock to its shareowners via a tax-free stock dividend. As a result, Old Monsanto no longer owns any equity interest in New Monsanto. Legacy Liabilities under the Distribution Agreement At the time of the 1997 Spin-Off Transaction, Solutia was required to contractually assume certain liabilities from Pharmacia. These legacy liabilities consist primarily of: (a) $55,000,000 per year for retiree healthcare, life insurance costs and disability benefits to some 20,000 retirees and dependants and surviving spouses who retired from Pharmacia prior to the spin-off and who never worked for Solutia, as well as disability benefits to individuals who became disabled while working for Pharmacia prior to the spin-off; (b) $25,000,000 per year on account of environmental compliance and remediation costs relating to Pharmacia's historic chemical business under applicable federal, state and local environmental laws. In virtually all instances these obligations arise from activities conducted by Pharmacia prior to the spin-off and fall into two broad categories: (1) obligations related to properties that are not currently owned by Solutia; and (2) obligations related to properties currently owned by Solutia, including clean-up obligations for off-site migration of contaminants. The vast majority of remediation actions taken to date at properties owned by Solutia relate to contamination that emanated from the properties prior to Solutia's ownership; and (c) $20,000,000 per year on account of litigation defense costs and judgments. Since the spin-off, Solutia has been responsible for bearing the cost associated with various toxic tort lawsuits related to PCBs, premises based asbestos and other chemical exposures from the conduct of the historic chemical business of Pharmacia. Solutia is defending approximately 570 asbestos actions (involving an estimated 3,500 to 4,500 plaintiffs) brought against Pharmacia. In addition, notwithstanding the recent settlement of cases relating to the Anniston plant site, Solutia is still defending approximately 30 cases involving alleged exposure from PCB's manufactured by Pharmacia prior to the spin-off. Solutia also is currently defending approximately 90 general and product liability claims, which have been brought against Pharmacia. Jeffry N. Quinn, Solutia's Senior Vice President, General Counsel and Chief Restructuring Officer, says that Solutia has determined, in its business judgment, that the Distribution Agreement is not necessary to its current operations and that assumption of the Distribution Agreement would not enhance its prospects for a successful reorganization. In fact, Mr. Quinn says, the enormous Legacy Liabilities and other financial burdens heaped upon Solutia pursuant to the Distribution Agreement are among the principal causes of the financial difficulties of Solutia and the other Debtors. Solutia intends to walk away from the Distribution Agreement to relieve the Company of these burdens on an ongoing basis and to allow the Company to focus on their ongoing business operations and transform the Company into healthier, reorganized companies without the shadow of the Legacy Liabilities. Although there may be some benefits for Solutia under the Distribution Agreement -- primarily, the obligations of Old Monsanto and New Monsanto to indemnify Solutia with respect to liabilities related to the Pharmaceuticals Business and the Ag Business -- those benefits are easily outweighed by the enormous burden imposed on Solutia to bear sole responsibility for all claims relating to the operation of the Chemicals Business by Old Monsanto prior to the spin-off of Solutia. Indeed, Mr. Quinn explains, since the 1997 spin-off, Solutia has paid on average $100 million each year to satisfy the Legacy Liabilities, whereas Old Monsanto and New Monsanto have been required to pay only nominal amounts to satisfy their indemnification obligations to Solutia. Solutia believes that the total potential exposure relating to the Chemicals Business, which was operated by Old Monsanto for nearly 100 years before the Solutia spin-off, greatly exceeds any potential claims that might be asserted against Solutia relating to the Pharmaceuticals Business and the Ag Business particularly given the ability of any claimants to pursue Old Monsanto or New Monsanto directly. Solutia's obligations on account of the Legacy Liabilities can be projected to run to the hundreds of millions of dollars. Whatever value may exist by virtue of the indemnification of Solutia in the Distribution Agreement is undoubtedly substantially less than this amount and is further reduced because all claims against Solutia relating to the Pharmaceuticals Business and the Ag Business will be discharged through these bankruptcy cases. Given the nature and magnitude of the liabilities imposed upon Solutia under the Distribution Agreement, Solutia does not believe that it can be assigned for value. Forward-Looking Financial Benefits Therefore, Solutia's rejection of the Distribution Agreement will benefit its estate and should be approved by the Bankruptcy Court -- so much so that, free of these Legacy Liabilities, the Debtors project that they can comply with these Consolidated EBITDA Projections under a $500,000,000 debtor-in-possession financing pact provided by a consortium of lenders comprised of Ableco Finance LLC (together with its affiliate assignees); Congress Financial Corporation (Central); Wells Fargo Foothill, Inc.; Fortress Credit Opportunities I LP; Highbridge/Zwirn Special Opportunities Fund L.P.; Bernard National Loan Investors, Ltd.; Nylon & Films, L.L.C.; Oak Hill Securities Fund, L.P.; Oak Hill Securities Fund II, L.P; Cardinal Investment Partners I, L.P.; Lerner Enterprises, L.P.; Oak Hill Credit Partners I, Limited; Oak Hill Credit Partners II, Limited; P&PK Family Ltd. Partnership; TRS Thebe LLC; and Upper Columbia Capital Company, LLC: Twelve-Month Period Ended Consolidated EBITDA Covenant ------------------------- ---------------------------- December 31, 2003 $76,800,000 January 31, 2004 $60,400,000 February 29, 2004 $60,300,000 March 31, 2004 $56,300,000 April 30, 2004 $61,800,000 May 31, 2004 $64,700,000 June 30, 2004 $61,200,000 July 31, 2004 $61,300,000 August 31, 2004 $61,600,000 September 30, 2004 $74,000,000 October 31, 2004 $73,800,000 November 30, 2004 $77,800,000 December 31, 2004 $91,800,000 January 31, 2005 $104,600,000 February 28, 2005 $105,800,000 March 31, 2005 $113,400,000 April 30, 2005 $115,500,000 May 31, 2005 $116,900,000 June 30, 2005 $119,200,000 July 31, 2005 $123,300,000 August 31, 2005 $124,700,000 September 30, 2005 $124,500,000 October 31, 2005 $126,000,000 November 30, 2005 $120,900,000 December 31, 2005 $121,400,000 ----------------------------------------------------------------- [00002] SOLUTIA'S CONSOLIDATED SEPTEMBER 30, 2003 BALANCE SHEET ----------------------------------------------------------------- SOLUTIA INC. STATEMENT OF CONSOLIDATED FINANCIAL POSITION AS OF SEPTEMBER 30, 2003 (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents................... $55,000,000 Trade receivables, net of $21,000,000 allowance.................... 273,000,000 Miscellaneous receivables................... 122,000,000 Prepaid expenses............................ 28,000,000 Deferred income tax benefit................. 142,000,000 Inventories................................. 247,000,000 -------------- TOTAL CURRENT ASSETS........................ 867,000,000 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $2,529,000,000........................ 945,000,000 INVESTMENTS IN AFFILIATES................... 204,000,000 GOODWILL.................................... 147,000,000 IDENTIFIED INTANGIBLE ASSETS, NET......................................... 67,000,000 LONG-TERM DEFERRED INCOME TAX BENEFIT....... 384,000,000 OTHER ASSETS................................ 240,000,000 -------------- TOTAL ASSETS................................ $2,854,000,000 ============== LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable............................ $159,000,000 Accrued liabilities......................... 404,000,000 Postretirement liabilities.................. 105,000,000 Short-term debt............................. 86,000,000 -------------- TOTAL CURRENT LIABILITIES................... 754,000,000 LONG-TERM DEBT.............................. 909,000,000 POSTRETIREMENT LIABILITIES.................. 1,132,000,000 OTHER LIABILITIES........................... 428,000,000 SHAREHOLDERS' DEFICIT: Common stock (authorized, 600,000,000 shares, par value $0.01) Issued: 118,400,635 shares............... 1,000,000 Additional Contributed Capital.......... 56,000,000 Treasury stock, at cost (13,879,402 shares).................. (251,000,000) Net deficiency of assets at spin-off........ (113,000,000) Accumulated other comprehensive loss........ (68,000,000) Reinvested earnings......................... 6,000,000 -------------- TOTAL SHAREHOLDERS' DEFICIT................. (369,000,000) -------------- TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT. $2,854,000,000 ============== ----------------------------------------------------------------- [00003] DEBTORS' PRESS RELEASE ANNOUNCING CHAPTER 11 FILINGS ----------------------------------------------------------------- ST. LOUIS, Missouri -- December 17, 2003 -- Solutia Inc. (NYSE: SOI), announced today that it and its subsidiary, Solutia Europe SA/NV, have reached agreement with the holders of approximately two-thirds of the aggregate principal amount outstanding of the 6.25% Euro Notes, due in 2005 to restructure those Euro Notes in a way that would remove a potential filing by Solutia Inc. and its domestic subsidiaries for relief under Chapter 11 of the United States Bankruptcy Code as an event which would accelerate the Euro Notes. This change would allow Solutia Europe to continue normal operations and not be forced to file for reorganization under Chapter 11 or under the laws of its country of incorporation, Belgium, if the parent company and its domestic subsidiaries were to file. The Euro Notes were issued by Solutia Europe and are guaranteed by Solutia Inc. and aggregate 200 million Euros in principal amount. Solutia and the Euro Note holders have agreed to modify the Euro Notes in the following manner: 1. Cross default provisions in the Euro Notes that would result in default and acceleration of the Euro Notes upon the filing of a Chapter 11 proceeding by Solutia Inc. will be eliminated. 2. The maturity of the notes will be extended to Dec. 15, 2008 from the current Feb. 15, 2005. 3. Interest on the notes will be paid at the rate of 10% per annum, payable semi-annually. 4. Holders of the Euro Notes will be granted security interests in substantially all of the assets of Solutia Europe and its subsidiaries, which will also guarantee the Euro Notes. 5. Partial redemption of the Euro Notes as a result of permitted asset sales will be allowed. Full redemption will be barred for 18 months; thereafter, full redemption will be allowed at 105% of principal for the next year, 103% of principal for the year thereafter, 101% of principal for the year after that and at par thereafter. 6. Covenants will be implemented which will have the effect of limiting the ability of Solutia Europe and its subsidiaries to transfer assets or cash out of those entities until the Euro Notes are paid. 7. Solutia Europe will agree to certain financial reporting requirements and to indemnify Euro Note holders against certain liabilities. This agreement will be implemented in a two-step procedure, the first step of which has already occurred. In the first step, which was completed on Dec. 16, 2003 at a meeting of Euro Note holders held in Brussels, the required percentage of Euro Note holders adopted resolutions which eliminate through Jan. 30, 2004 the ability to accelerate and default the Euro Notes because of a Chapter 11 filing by Solutia Inc. In consideration for that agreement, Solutia Europe is today making an additional interest payment to the Euro Note holders of approximately 1.3 million Euros. The second step will be implemented in a second meeting of Euro Note holders to be held in Brussels no later than Jan. 29, 2004. Jeffry N. Quinn, Senior Vice President and Chief Restructuring Officer of Solutia Inc., commented as follows on the agreement: "We believe that we have reached an agreement with the holders of Solutia Europe's Euro Notes that is mutually beneficial for both the holders of those notes and for Solutia. The facts that have led Solutia Inc. and its domestic subsidiaries to consider filing petitions under Chapter 11 do not apply equally to Solutia Europe and to Solutia's other overseas operations. The non-US operations are not directly burdened by the legacy liabilities imposed on Solutia Inc. at its creation by the former Monsanto Company and are healthy, cash flow positive businesses. We therefore do not believe that Solutia Europe or the other overseas subsidiaries of Solutia need to file for reorganization, but the cross-default provisions of the Euro Notes would have required them to do so upon a filing by Solutia Inc. By eliminating that cross default, the European and other overseas operations of Solutia can continue their businesses unaffected by a potential U.S. Chapter 11 proceeding. "We think this amendment is in the best interests of the customers, vendors and creditors of both our overseas and domestic operations. Further, by extending the maturity of the Euro Notes by over 30 months, we have given ourselves time to finalize a potential reorganization in the United States and to then deal with the maturity of the Euro Notes. From the point of view of the Euro Note holders, we believe the concessions we have made to them in terms of interest rate, security, redemption protection and covenants fairly compensate them for their concessions," Quinn noted. Corporate Profile Solutia -- http://www.solutia.com/ -- uses world-class skills in applied chemistry to create value-added solutions for customers, whose products improve the lives of consumers every day. Solutia is a world leader in performance films for laminated safety glass and after-market applications; process development and scale-up services for pharmaceutical fine chemicals; specialties such as water treatment chemicals, heat transfer fluids and aviation hydraulic fluid and an integrated family of nylon products including high-performance polymers and fibers. Solutia . . . Solutions for a Better life. ----------------------------------------------------------------- [00004] SOLUTIA DEBTORS' CHAPTER 11 DATABASE ----------------------------------------------------------------- Debtors filing separate Chapter 11 petitions: Case No. Debtor Entity -------- ------------- 03-17948 Solutia Business Enterprises Inc. 03-17949 Solutia Inc. 03-17950 Solutia Systems, Inc. 03-17951 Solutia Overseas, Inc. 03-17952 CPFilms Inc. 03-17953 Solutia Management Company, Inc. 03-17954 Monchem International, Inc. 03-17955 Axio Research Corporation 03-17956 Solutia Invesments, LLC 03-17957 Beamer Road Management Company 03-17958 Monchem, Inc. 03-17959 Solutia Inter- America, Inc. 03-17960 Solutia International Holding, LLC 03-17961 Solutia Taiwan, Inc. 03-17962 Solutia Greater China, Inc. Chapter 11 Petition Date: December 17, 2003 Bankruptcy Court: United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green, 5th Floor New York, New York 10004-1408 Telephone (212) 668-2870 Bankruptcy Judge: The Honorable Prudence Carter Beatty Circuit: Second Debtors' Counsel: Richard M. Cieri, Esq. Conor Reilly, Esq. N. Natasha Labovitz, Esq. Gibson, Dunn & Crutcher LLP 200 Park Ave. New York, NY 10166 Telephone (212) 351-4000 Fax (212) 351-4035 Debtors' Special Counsel: Robert J. Tomaso, Esq. Blackwell Sanders Peper Martin LLP 710 Olive Street, Suite 2400 St. Louis, MO 63101 Debtors' Financial Advisors: Todd R. Snyder Jared J. Dermont Rothschild, Inc. New York, NY 10020 1251 Avenue of the Americas Telephone (212) 403-3500 Fax (212) 403-5454 Debtors' Restructuring Advisors: Thomas L. Zambelli Kroll Zolfo Cooper 101 Eisenhower Pkwy Roseland, NJ 07068 Telephone (973) 618-5160 - and - Cindy Conners Kroll Zolfo Cooper 292 Madison Ave. New York, NY 10017 Telephone (212) 561-4193 Debtors' Claims Agent: Wendy Capola The Trumbull Group P.O. Box 721 Windsor, CT 06095 Telephone (860) 687-7566 Fax (860) 683-8697 http://www.trumbullgroup.com/ Debtors' Accountants and Auditors: Deloitte & Touche LLP St. Louis, Missouri Debtors' Public Relations Firm: Steven D. Goldberg Sitrick & Company Inc. http://www.sitrick.com/ Secured Lenders' Counsel: Frederic L. Ragucci, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Telephone (212) 756-2000 Telecopier (212) 593-5955 U.S. Trustee: Carolyn S. Schwartz United States Trustee for Region 2 33 Whitehall Street, Suite 2100 New York, NY 10004 Telephone (212) 510-0500 ----------------------------------------------------------------- [00005] LIST OF THE DEBTORS' 50-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ JPMorgan Chase Bank, as Indenture Trustee $300,000,000 Trustee for 7.375% Institutional Trust Services Debentures due 4 New York - 15th Floor 2027 New York, NY 10004 HSBC Bank of USA Indenture Trustee unliquidated Issuer Services, as Trustee for 11.25% 452 Fifth Avenue Secured Notes New York, New York 10018 Due 2009 KBC Bank NV, as Principal Guarantee of Bond $200,000,000 Paying Agent Debt Havenlaan 2 1080 Brussels Belgium JPMorgan Chase Bank, as Indenture Trustee Trustee for 6.72% Institutional Trust Services Debentures due 2037 $150,000,000 A New York Plaza -15th Floor New York, New York UCB S.A. Contract Claim $29,243,440 Allee de la Recherche 60 1070 Brussels, Belgium Kasowitz, Benson, Torres & Litigation Claim $25,000,000 Friedman LLP, as Escrow Agent for the Abernathy Plaintiffs 1633 Broadway New York, New York Gentle, Pickens, Eliason, Litigation Claim $25,000,000 Turner & Ritondo, as Settlement Administrator for the Tolbert Plaintiffs 2 North 20th Street, Suite 1200 Birmingham, AL 35203 Equistar Chemicals LP Trade debt $5,386,728 One Houston Center, Suite 1600 1221 McKinney Street P.O. Box 2583 Houston, TX 77252-2583 Dupont Trade debt $5,332,488 Barley Mill Plaza 26-1206 P.O. Box 80026 Wilmington, DE 19880-0026 El Paso Merchant Energy Trade debt $4,749,537 1001 Louisiana Street Houston, TX 77252-2511 Shell Chemical Co. Trade debt $4,465,787 One Shell Plaza, Suite 1980 P.O. Box 2463 Houston, TX 77252 Huntsman Petrochemical Corp. Trade debt $3,795,197 3040 Post Oak Boulevard Houston, TX 77056 Chevron Phillips Chemical Co Trade debt $3,441,229 10001 Six Pines Drive P.O. Box 4910 The Woodlands, TX 77380 BASF Corporation Trade debt $2,916,321 3000 Continental Drive North Mount Olive, NJ 07828-1234 Celanese Ltd. Trade debt $1,842,192 1601 West LBJ Freeway P.O. Box 819005 Dallas, TX 75234 Dupont Teijin Films Trade debt $1,806,181 Hopewell Site, Discovery Drive P.O. Box 411 Hopewell, VA 23860 Valero Marketing & Supply Co. Trade debt $1,763,750 One Valero Way P.O. Box 500 San Antonio, TX 78249 Toray Plastics Trade debt $1,736,149 50 Belver Avenue No. Kingstown, RI 02852-7520 Kelley Services Inc. Trade debt $1,679,215 999 W. Beaver Rd Troy, MI 48084 Mitsubishi International Trade debt $1,637,629 201 Hood Road P.O. Box 1400 Greer, SC 29652 EDS Corp. Trade debt $1,475,324 575 Maryville Centre Drive P.O. Box 14947 St. Louis, MO 63150-4947 PPG Industries Inc. Trade debt $1,209,213 P.O. Box 40162 Atlanta, GA 31192-0162 Sud-Chemie Inc. Trade debt $1,205,259 P.O. Box 2913 Bedford Park, IL 60499-2913 Monsanto Company - E2NE Trade debt $1,026,180 800 North Lindberg Boulevard St. Louis, Missouri 63167 Ethox Chemicals Inc. Trade debt $835,061 P.O. Box 5094 STA B Greenville, SC 29606 Dynamic Industries Inc. Trade debt $806,358 P.O. Box 58835 20710 Gulf Frwy Suite 30 Webster, TX 77598-8835 Millennium Petrochemicals Trade debt $731,084 Inc. 20 Wright Avenue, Suite 100 Hunt Valley, MD 21030 Minnesota Life Insurance Co. Trade debt $673,379 400 Roberts Street N. Saint Paul, MN 55101 JLM Industries Inc. Trade debt $660,164 8675 Hidden River Parkway Tampa, FL 33637 Rhodia Inc. Trade debt $590,171 259 Prospect Plains Road Cranbury, NJ 08512-7500 Univar Ltd Trade debt $578,592 8500 W. 68th Street Bedford Park, IL 60501 Methanex Methanol Co. Trade debt $568,803 15301 Dallas Parkway, Suite 1150 Addison, TX 75001 Continental Nitrogen & Trade debt $555,569 Resources 12955 Courthouse Blvd. Rosemount, MN 55068 Rothmax USA Inc. Trade debt $548,771 803 Main Street Riverton, NJ 08077 Bekins Distribution Center Trade debt $533,079 1153 Triview Ave. Sioux City, IA 51103 CIBA Specialty Chemicals Trade debt $529,119 Corp 540 White Plains Road P.O. Box 2005 Tarrytown, NY 10591-9005 Tennessee Valley Authority Trade debt $477,002 400 West Summit Hill Drive Knoxville, TN 37902-1499 Ferro Corporation Trade debt $465,900 7061 East Pleasant Valley Road Independence, OH 44131 Ellis Carstarphen & Professional services $462,088 Dougherty 720 North Post Oak, Suite 330 Houston, TX 77061 Austin Industrial Trade debt $422,232 8031 Airport Blvd. Houston, TX 77061 TOSCO Corp. Trade debt $420,783 1400 Park Avenue Linden, NJ 07036 DH Compounding Trade debt $418,424 1260 Carden Farm Drive Clinton, TN 37716 Maxim Crane Works Trade debt $410,747 401 N. 16th Street La Porte, Texas 77571 Hubbard & Drake Services $388,527 1002 5th Ave SE P.O. Box 1867 Decatur, AL 35602 Premcor Refining Group Inc. Trade debt $383,608 1700 East Putnam Avenue D Old Greenwich, CT 06870 Standard Corporation Trade debt $378,384 1400 Main Street, Palmetto Building Suite 1300 Columbia, SC 29201 CSX Transportation Inc. Trade debt $367,649 301 W. Bay St., 21st Floor Jacksonville, FL 32202 Meredith Corp. Trade debt $364,171 1716 Locust Street Des Moines, IA 50309-3023 Borden Chemical Trade debt $347,217 180 East Broad St. Columbus, OH 43215 Gentle, Pickens, Eliason, Litigation Claims unliquidated Turner & Ritondo, as Settlement Administrator for the Owens Plaintiffs Suite 1200 Two North Twentieth Building 2 North 20th Street Birmingham, AL 35203 ----------------------------------------------------------------- [00006] ORGANIZATIONAL MEETING TO FORM OFFICIAL COMMITTEES ----------------------------------------------------------------- The United States Trustee for Region II will convene a meeting of the Debtors' largest unsecured creditors on MONDAY, January 5, 2004 at 12:00 noon for the purpose of forming a committee of unsecured creditors in Solutia's Chapter 11 cases. The meeting will be held at: THE OFFICE OF THE UNITED STATES TRUSTEE 80 Broad Street, Second Floor New York, New York 10004 This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. That meeting, required in all bankruptcy cases, will be held at a later date. A representative of the Debtors will attend the organizational meeting and provide background information regarding the cases, but not under oath. Contact Greg M. Zipes, Esq., at (212) 510-0500 to obtain a statement of willingness to serve on a committee and for any additional information about this meeting. *** End of Issue No. 1 ***