St. Louis company wins $70 million interest claim fight

PHILADELPHIA -- A New York judge has ruled against a group of Solutia Inc. senior secured bondholders who said they were owed about $70 million more than the company plans to give them under its Chapter 11 plan.

U.S. Bankruptcy Judge Prudence Carter Beatty on Friday said holders of Solutia's 11.25 percent senior secured notes due in 2009 will get what the company says it owes them -- an estimated $210 million. Bondholders claimed they were entitled to collect $280 million or more when the chemical maker exits bankruptcy.

The bankruptcy judge had instructed the company and senior noteholders to sit down and come up with a final calculation. But in a 28-page ruling, she sided with the company and its official committee of unsecured creditors and against the senior bondholders on a series of legal arguments over the debt issue.

A St. Louis specialty-chemicals company, Solutia is slated to emerge from bankruptcy by the end of the year. The company's Chapter 11 plan calls for unsecured creditors to be repaid about 83 cents for every dollar they're owed.