Adversary Re Non-bk Subs 119649-lyondell

Vineet Bhatia, Esq. David M. Peterson, Esq. SUSMAN GODFREY LLP 1000 Louisiana, Suite 5100 Houston, Texas 77002 Telephone: 713-653-7855 Facsimile: 713-654-3344 Jacob Buchdahl, Esq. SUSMAN GODFREY LLP 654 Madison Ave., 5th Floor New York, New York 10065 Telephone: 212-336-8330 Facsimile: 212-336-8340 Attorneys for Lyondell Chemical Company, et al. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------------------x : In re: : Chapter 11 : LYONDELL CHEMICAL COMPANY, et al., : Case No. 09-10023 (REG) : Debtors. : Jointly Administered ---------------------------------------------------------------------------x : LYONDELL CHEMICAL COMPANY, et al., : : Adversary Proceeding Plaintiffs, : : No. 09-[________] (REG) -against: : WILMINGTON TRUST COMPANY, AS : TRUSTEE, : : Defendant. : ---------------------------------------------------------------------------x COMPLAINT Plaintiffs Lyondell Chemical Company (“Lyondell Chemical”) and certain of its subsidiaries and affiliates, as debtors and debtors-in-possession in the above-captioned chapter

11 cases and as plaintiffs in the above-captioned adversary proceeding (collectively, the “Debtors”), by and through their undersigned attorneys, allege for their complaint as follows: NATURE OF ACTION 1.

This is an adversary proceeding brought pursuant to Rules 7001 and 7003

of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). 2.

The Plaintiff-Debtors assert this complaint for a preliminary injunction

pursuant to section 105(a) of title 11 of the United States Code (the “Bankruptcy Code”), Rule 65 of the Federal Rules of Civil Procedure, and Rules 7001(7) and 7065 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) to enjoin until at least January 31, 2010 any attempts to enforce any rights or exercise any remedy under the $615,000,000 and €500,000,000 8.375% senior notes due August 15, 2015 (collectively, the “2015 Notes”) against guarantors of the 2015 Notes that have not filed a petition for chapter 11 protection (the “NonDebtor-Guarantors”). THE PARTIES 3.

The Plaintiff-Debtors are 94 affiliated entities that filed voluntary

petitions for relief under chapter 11 of the Bankruptcy Code in this Court. The Debtors continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 4.

Upon information and belief, defendant Wilmington Trust Company

(“Wilmington Trust”) is a Delaware corporation with its principal place of business at Rodney Square North, 1100 North Market Street, Wilmington Trust, Delaware 19890. Wilmington Trust is the successor trustee of the 2015 Notes. Wilmington Trust is the legal representative of the holders of the 2015 Notes (the “2015 Noteholders”).

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JURISDICTION AND VENUE 5.

This adversary proceeding arises in connection with and relates to the

voluntary petitions for relief under chapter 11 of the Bankruptcy Code filed by each of the Plaintiff-Debtors. 6.

This Court has jurisdiction over this adversary proceeding pursuant to 28

U.S.C. §§ 157 and 1334. 7.

The claims asserted in this Complaint are core proceedings pursuant to 28

U.S.C. § 157(b)(2). 8.

Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409(a)

because this proceeding arises in and is related to Plaintiff-Debtors’ bankruptcy cases pending in this District. 9.

This Court has personal jurisdiction over Defendant Wilmington Trust

because Defendant (and each individual noteholder) agreed to submit to the jurisdiction of courts in the State of New York in actions or proceedings arising out of or relating to the Intercreditor Agreement, the 2015 Indenture, and guarantee agreements for the 2015 Notes (the “Guarantees”). FACTS A.

The 2015 Notes 10.

On August 10, 2005, Nell AF S.à.r.l., predecessor in interest to plaintiff-

Debtor LyondellBasell Industries AF S.C.A. (“LBIAF” and, collectively with the Debtors and “Non-Debtor Affiliates”, the “Company”), issued the 2015 Notes pursuant to an indenture agreement (the “2015 Indenture”). 11.

The 2015 Notes are guaranteed by certain of the Debtors (the “Debtor-

Guarantors”) and certain affiliates of the Debtors who have not filed for bankruptcy protection

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(the “Non-Debtor-Guarantors,” together with the Debtor-Guarantors, the “Guarantors”). These Guarantees are unsecured. 12.

On or about February 8, 2009, Wilmington Trust succeeded The Bank of

New York as trustee of the 2015 Notes (the “Trustee”). 13.

An Event of Default exists under the 2015 Notes, pursuant to Section

6.01(6) of the 2015 Indenture, due to the chapter 11 filing of certain Significant Subsidiaries of LBIAF on January 6, 2009. 14.

An Event of Default also exists under the 2015 Notes, pursuant to Section

6.01(6) of the 2015 Indenture, due to the chapter 11 filing of LBIAF on April 24, 2009. 15.

An Event of Default also exists under the 2015 Notes, pursuant to Section

6.01(1) of the 2015 Indenture, due to the failure by LBIAF to make interest payments on the 2015 Notes, which failure started February 15, 2009 and has continued for over 30 days. B.

The 2007 Financing Transaction and Intercreditor Agreement 16.

On December 20, 2007, LBIAF, certain subsidiaries of LBIAF, and

certain lenders entered into arrangements under which LBIAF incurred $20 billion of secured debt. More specifically, there was created a Senior Secured Loan consisting of (i) a $2 billion Term Loan A facility due 2013, (ii) a $7.55 billion and €1.3 billion Term Loan B facility due 2014, and (iii) a $1 billion multicurrency revolving credit facility due 2013. There was also created an $8 billion term loan. 17.

The Senior Secured Loan and the Bridge Loan are guaranteed by

substantially the same entities that guaranteed the 2015 Notes. The guarantees for the benefit of the Senior Secured Loan and the Bridge Loan are secured by pledges of substantially all the assets of the guarantors.

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18.

On December 20, 2007, LBIAF, certain subsidiaries of LBIAF, the

Senior Secured Loan lenders, the Bridge Loan lenders, and the Trustee entered into an “Intercreditor Agreement” dated December 20, 2007 (the “Intercreditor Agreement”).1 19.

The 2015 Indenture expressly states that, upon an Event of Default, the

rights of the Holders of the Notes are subject to an “Intercreditor Agreement”: An Event of Default under this Indenture or the Notes shall constitute an event of default under this Guarantee, and shall entitle the Holders of Notes to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the Obligations of the Company subject to the Intercreditor Agreement. 20.

Section 2.1.1 of the Intercreditor Agreement provides that any debt

arising from the 2015 Notes guarantees “will rank in right and priority of payment” below the Senior Secured Loans and the Bridge Loans. 21.

Section 13.1.6 of the Intercreditor Agreement specifically provides that

any recovery obtained by the Trustee or the 2015 Noteholders must be paid over to the Security Agent or held in trust for the Security Agent, for the benefit of the creditors that rank above the 2015 Noteholders. 22.

Accordingly, the 2015 Noteholders are subordinate to secured creditors

holding debt exceeding $23 billion, either structurally or pursuant to the Intercreditor Agreement, including lenders under the Debtors’ debtor-in possession financing (to the extent that the NonDebtor-Guarantors secured any obligation to the DIP Lenders), the pre-petition senior secured lenders2 and bridge lenders.3 Virtually all of the Guarantors are encumbered with debt held by 1

The Intercreditor Agreement replaced a May 2007 Intercreditor Agreement which replaced the original intercreditor agreement dated August 1, 2005. 2

Lenders under the senior secured facility entered on December 20, 2007 by BIL Acquisition Holdings Limited (which merged with and into Lyondell Chemical) and certain Non-Debtor Affiliates, consisting,

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the senior secured lenders and bridge lenders. As such, the 2015 Noteholders are not entitled to be paid on their debt until the debt of the more senior lenders, who have agreed to forbear, is satisfied in full. C.

The High Yield Notes Standstill Period 23.

The Intercreditor Agreement also provides for a standstill period, the

“High Yield Notes Standstill Period” (the “Standstill Period”), during which the acceleration of the payment obligations of LBIAF and the Guarantors under the 2015 Notes and any action to enforce claims against LBIAF or the Guarantors under the 2015 Notes are prohibited. 24.

Section 19.3 of the Intercreditor Agreement defines the Standstill Period,

in relevant part, as: In relation to a Relevant High Yield Notes Default, a High Yield Notes Standstill Period shall mean the period beginning on the date (the “High Yield Notes Standstill Start Date”) the High Yield Notes Trustee serves a High Yield Notes Default Notice on each Senior Representative in respect of such Relevant High Yield Notes Default and ending on the earlier to occur of: 19.3.1 the date falling 179 days after the High Yield Notes Standstill Start Date . . . . D.

March 23, 2009 Default Notice 25.

On March 23, 2009, Citibank, N.A., as Senior Agent, Security Agent and

ABL Agent, and Merrill Lynch Capital Corporation, as Interim Facility Agent, received from Wilmington Trust a High Yield Notes Default Notice (the “March 23rd Default Notice”).

pre-roll up, of (i) a $2 billion Term Loan A facility due 2013, (ii) a $7.55 billion and €1.3 billion Term Loan B facility due 2014, and (iii) a $1 billion multicurrency revolving credit facility due 2013. 3

Lenders under the $8.0 billion interim loan facility entered into by LyondellBasell Finance Company on December 20, 2007.

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26.

The March 23rd Default Notice states that there are existing Events of

Default under Sections 6.01(6) of the 2015 Indenture due to the bankruptcy filing of certain Significant Subsidiaries of LBIAF and under 6.01(1) of the 2015 Indenture due to the “continuing failure” of LBIAF to pay interest on the 2015 Notes. 27.

The March 23rd Default Notice began the Standstill Period.

28.

As a result of the March 23rd Default Notice, pursuant to Section 19.3 of

the Intercreditor Agreement, the Standstill Period is set to expire on September 18, 2009. E.

May 15, 2009 Wilmington Trust Letter And Default Notice 29.

On or about May 15, 2009, Wilmington Trust sent a letter (the “May 15th

Letter”) and High Yield Notes Default Notice (the “May 15th Default Notice”) to Citibank, N.A. and Merrill Lynch Capital Corporation.4 30.

The May 15th Default Notice stated that there is an Event of Default

under Section 6.01(6) of the 2015 Indenture due to the bankruptcy filing of LBIAF. F.

May 21, 2009 Demands For Payment By Wilmington Trust 31.

On May 21, 2009, Debtor LBIAF and the Non-Debtors Guarantors

received from Wilmington Trust a Demand for Payment of All Obligations and a Demand for Payment of Trustee Fees and Expenses (collectively, the “Demands for Payment”). 32.

In its Demand for Payment of All Obligations, Wilmington Trust

demands from the Non-Debtor-Guarantors: [I]mmediate payment to the Trustee for the benefit of the Holders of all Obligations under the Indenture and the Notes owing or payable to the respective Holders, including the principal of, premium, if any, and interest on the Notes and all other obligations

4

The May 15 Letter was addressed to Citibank, N.A., as Senior Agent, and to Merrill Lynch Capital Corporation as Interim Facility Agent.

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of the Company to the Holders or the Trustee under the Indenture, including all amounts due the Trustee under Section 7.07 of the Indenture. 33.

As of the date of the Complaint, and despite request, Wilmington Trust

has not withdrawn its Demand for Payment. G.

Consequences Of An Attempted Exercise of Remedies Under the 2015 Notes 34.

Pursuant to the March 23rd Default Notice, the May 15th Letter and the

May 15th Default Notice, upon the expiration of the Standstill Period, all principal and accrued interest on the 2015 Notes will be due and payable and the Trustee may exercise or direct the exercise of certain remedies against the Non-Debtor-Guarantors. The current aggregate amount of principal on all of the 2015 Notes that would come due upon acceleration is €500 million and $615 million, plus accrued interest on both amounts. 35.

The Non-Debtor-Guarantors do not have unencumbered assets sufficient

to satisfy the 2015 Notes guaranties. 36.

The failure to pay on a Guaranty by a Non-Debtor-Guarantor, or an

involuntary insolvency filed against a Non-Debtor-Guarantor, which would likely result from such a failure to pay, would constitute an Event of Default under Section 8.01 of the Debtors’ debtor-in-possession credit facilities (the “DIP Credit Facilities”).5 37.

Upon an Event of Default, a majority of the DIP lenders under each DIP

Credit Facility would have the right to accelerate and require repayment in full of all loans and obligations under such DIP Credit Facility. Further, in that event, absent the consent of a

5

References to the “DIP Credit Facility” herein are to the Debtors’ DIP Term Loan facility, as amended. The Debtors are also obligors under a DIP asset-backed credit facility (the “DIP ABL Facility”) that has substantially similar covenants and events of default. References herein to the “DIP Credit Facilities” shall mean the DIP Credit Facility and the DIP ABL Facility, as amended.

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majority of the DIP lenders under a DIP Credit Facility, Debtors would be foreclosed from any further borrowing under such DIP Credit Facility. 38.

In addition to the consequences of the loss of the DIP Credit Facilities, a

default under the DIP Credit Facilities would in turn trigger defaults under the forbearance agreements currently in place that prohibit the lenders party to the Debtors’ prepetition senior secured and interim credit facilities from pursuing remedies against the non-debtor entities that provided guaranties in support of those credit facilities.

Defaults under the forbearance

agreements would allow such secured parties to assert remedies against the assets of many of the non-debtors, triggering insolvency proceedings and liquidation under applicable European law. H.

The European Securitization Program 39.

Certain European Non-Debtor Affiliate entities (the “Sellers”) participate

in a receivables securitization program under which lenders provide funding to Basell Polyolefins Collections Limited (“BPC”), a bankruptcy-remote special purpose entity, based on the value of, and for the purposes of purchasing, underlying receivables generated by such affiliates (the “European Securitization Program” or the “Program”). 40.

Under the European Securitization Program, the receivables generated by

the Sellers are purchased by BPC on a daily basis. The continuous purchases are funded using the collections attributable to previously transferred receivables, together with the funding advanced by the lenders and subordinated funding advanced by one of the Sellers. These purchases cover a significant portion of the European Non-Debtor Affiliates’ eligible receivables generated in Europe from European customers. 41.

There have been various iterations of the European Securitization

Program. The current Program provides up to €450 million of financing to the collectivity of the European subsidiaries and other Non-Debtor Affiliates. The Program is among the most cost-9-

effective sources of operating capital available to the Company’s subsidiaries located outside of the US and is vital to continuing operations for these entities. The Sellers invest the proceeds of the securitization with the treasury entity of the Non-Debtor Affiliates, i.e., Basell Finance, which makes these funds available to the Non-Debtor Affiliates. 42.

Under certain of the documents governing the European Securitization

Program, specifically the “Framework Deed,” a Standstill Event was to occur on the Settlement Date occurring prior to the 149th day of the Standstill Period in connection with the 2015 Notes: Basell High Yield Notes Standstill Event will occur if on the last Settlement Date falling prior to the date falling 149 days after the High Yield Notes Standstill Start Date: (a) the High Yield Notes Standstill Period is still in effect and (b) the High Yield Notes Standstill Period has not been extended beyond the 179 day period referred to in Clause 19.3.1 of the [Intercreditor Agreement] or provisions having an equivalent effect (in the opinion of the Funding Agent, RBS and any other Third Party Lender) to such extension have not been put in place, whether by agreement of the parties to the [Intercreditor Agreement], or by an injunction or other court order or otherwise . . . . 43.

Under certain of the documents governing the European Securitization

Program, specifically the “Framework Deed,” a Termination Event was to occur when the Standstill Period in connection with the 2015 Notes reached the 149th day: if on the date falling 149 days after the High Yield Notes Standstill Start Date no US court has allowed any enforcement action to be taken against [LBIAF] in respect of its obligations under the Basell High Yield Notes and (a) no agreement has been reached for the High Yield Notes Standstill Period to be extended beyond the 179 day period referred to in Clause 19.3.1 of the [Intercreditor Agreement], or (b) provisions having an equivalent effect (in the opinion of the Funding Agent, RBS and any other Third Party Lender) to such extension have not been put in place, whether by agreement of the parties to the [Intercreditor Agreement], or by any injunction or other court order or otherwise . . . .

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44.

These provisions enable the lenders under the European Securitization

Program to be fully reimbursed prior to the commencement of any action on the 2015 Notes against Non-Debtor-Guarantors, which includes both Basell Finance and one of the Seller entities. 45.

The date falling 149 days after the High Yield Notes Standstill Start Date

was August 19, 2009. The Settlement Date falling prior to that date was August 10, 2009. The lenders have agreed temporarily to waive the Standstill Event until September 1, 2009. The lenders have conditionally agreed to waive the Termination Event until no later than September 9, 2009. 46.

The occurrence of a Termination Event under the European Securitization

Program will, upon notice given by the lenders (and unless remedied or waived) force the collectivity of the Non-Debtor Affiliates to wind down all currently outstanding balances under the Program. 47.

The effect of a Standstill Event is that BPC will continue to purchase

receivables and receive collections from creditors on receivables, but will only release funds in respect of the initial purchase price of those receivables to the Sellers on the next bi-monthly settlement date following the purchase. 48.

The occurrence of a Standstill Event would, upon the expiration of the

waiver in relation thereto, mean that the Non-Debtor Affiliates would lose the benefit of the dayto-day liquidity provided by the Program while the collections received by BPC are retained during the period between bi-monthly settlement dates. 49.

As of the date of this Complaint, the current amount of funding generated

by the European Securitization Program is about €171 million. This amount would no longer be immediately available to the Non-Debtor Affiliates following the Standstill Event, and not -11-

available at all after a Termination Event is declared, and the Non-Debtor Affiliates would therefore have to obtain these amounts from new sources of financing. 50.

The DIP Credit Facility has a €700,000,000 limit on the amount of cash

the U.S. can send to the Non-Debtor Affiliates at any one time outstanding under an intercompany loan facility. Given current outstanding borrowings, anticipated future cash flow budgets and the loss of funding under the European Securitization Program, by the end of October the Non-Debtor Affiliates will not have adequate availability under the DIP to continue operations if the European Securitization Program is not available. 51.

Whether the Non-Debtor Affiliates face insolvency because of a DIP

default, the pursuit of guarantee claims or as a result of a Standstill Event or Termination Event under the European Securitization Program, the consequences would be disastrous. In Europe, in order to avoid personal liability for breach of their fiduciary obligations, the directors of an entity generally have a duty to initiate insolvency proceedings in circumstances where the applicable entity either is or is likely to become insolvent. 52.

Insolvency proceedings in Europe generally do not provide for

restructuring or reorganization but rather often lead to the liquidation of the insolvent entity. Further, the initiation of such a proceeding typically results in management being replaced by a “receiver” or “trustee” appointed by a court. The resulting loss of Debtor control over these entities would make it virtually impossible to coordinate each of those disparate proceedings with the proceedings before the Court. 53.

Moreover, even if the Debtors were able to obtain sufficient liquidity to

continue operations in the United States, either from the DIP Facilities or an alternate source, the liquidation of LBIAF’s European non-debtor subsidiaries (whether resulting from the loss of liquidity following the declaration of a Standstill Event under the European Securitization -12-

Program or assertion of Guaranty claims under the 2015 Notes) would have a very substantial negative impact on the value of the Debtors’ estates. 54.

Although these corporations are each independent legal entities, the

Debtors and their Non-Debtor Affiliates operate as an integrated enterprise through the worldwide coordination of their businesses and their operation as an interconnected group of companies. The liquidation of the Debtors’ European Non-Debtor Affiliates, which own and operate all of the Company’s businesses in Asia, Australia and South America, would substantially and permanently split the Company in half, leaving the U.S. operations without the goods, services, and systems formerly available through the Company’s European operations. A number of the Debtors’ businesses – e.g., Chemicals POSM (Propylene Oxide/ Styrene Monomer), APO (Advanced Polyolefins) and catalyst and technology, as well as Debtors’ main R&D centers – are global in nature and have their core assets in Europe. The loss of these activities would irreparably damage the Company’s U.S. businesses and therefore damage the estate. 55.

The enormous loss of value that would occur if the European entities were

liquidated would have a direct, immediate, and irreparable impact upon the value of the Debtors’ estate. Such a liquidation and the Debtors’ attendant loss of control over those entities will have a significant and very negative impact on the Debtors’ ability to continue their operations and successfully emerge from chapter 11. 56.

Finally, the cessation of the European operations due to a bankruptcy

filing by the Non-Debtor-Guarantors would require the Debtors to expend substantial resources to which they do not have ready access in order to replace the goods, services, and systems formerly provided by the Non-Debtor-Guarantors. The enormous loss of value that would occur if the Non-Debtor-Guarantors were liquidated would have a direct, immediate, and irreparable -13-

impact upon the value of the Debtors’ estate and their prospects for a successful emergence from chapter 11. I.

No Harm To The 2015 Noteholders 57.

In contrast, the 2015 Noteholders would not be harmed at all by injunctive

relief enjoining them from exercising remedies. Indeed, the exercise of remedies on behalf of the 2015 Noteholders would not benefit them at all. Under the terms of the 2015 Indenture and the Intercreditor Agreement, the claims of the 2015 Notes are both structurally and contractually subordinated to the Debtors’ senior debt, and any payment received on the 2015 Notes would be subject to turnover for the benefit of the more senior lenders. J.

The Debtors Have Made Substantial Progress in These Cases 58.

Since January 6, 2009, the Debtors have made substantial progress

towards a reorganization on the very fast track required by their DIP Financing. While the milestones in the DIP Financing were the subject of great controversy, the Debtors have met the first one and are on track to meet the remaining ones. Specifically, on August 14, 2009, the Debtors delivered a draft plan of reorganization and disclosure statement to the DIP Lenders or their representatives. The draft plan has also been delivered to all other major constituencies, including the Official Committee of Unsecured Creditors. The Debtors’ plan of reorganization will distribute to creditors all of the enterprise value of LyondellBasell, including the value of the Debtors’ Non-Debtor Affiliates in Europe.

This will be accomplished by exchanging the

common stock of a newly formed holding company for the claims of in-the-money creditors. This integrated approach to reorganization is compelled by the fact that the enterprise’s public debt is cross-guaranteed by debtors and non-debtors and by the fact that approximately one-third of the total enterprise value resides in Europe. The Debtors expect to meet the additional DIP Financing milestones by filing the plan of reorganization and disclosure statement with the Court -14-

by September 15, 2009 and confirming a plan by the end of January 2010. As noted at the final hearing on Debtors’ DIP Financing, it is virtually unprecedented to move through the chapter 11 plan process so quickly, but the Debtors are on target to do so. 59.

Additionally, the Debtors have made substantial efforts towards an

operational restructuring. For example, they have conducted a preliminary review of over 26,100 contracts, leases and other agreements, in order to determine whether to assume or reject. This was followed up by a more in-depth review and evaluation of over 3,500 agreements. 60.

The Debtors have now filed over 20 motions to assume, reject or

otherwise dispose of agreements, the results of which will help the Debtors save approximately $6 million. Moreover, the Debtors also have either entered into or are about to enter into agreements to replace or renegotiate previous contracts in order to achieve better pricing and other commercial terms. These contractual arrangements are estimated to result in waivers of secured and administrative expense claims of more than $35 million and may potentially result in ongoing savings of approximately $110 million per year based on the expected near-term runrate. The Debtors also successfully withdrew as a general partner of PD Glycol LP, saving the Debtors approximately $3.6 million per year. And, the Debtors will make even more progress in the coming weeks, as they plan to file motions to reject or otherwise dispose of approximately 300 additional contracts. CLAIM FOR RELIEF (Injunctive Relief Under Section 105(a) Of The Bankruptcy Code) 61.

Plaintiffs repeat and re-allege each and every allegation contained in

paragraphs 1 through 60 as if fully set forth herein. 62.

Section 105(a) of the Bankruptcy Code provides, “The court may issue

any order, process, or judgment that is necessary or appropriate to carry out the provisions of -15-

this title.” Relief under section 105 of the Bankruptcy Code is particularly appropriate in a chapter 11 case when necessary to protect a debtor’s ability to effectively confirm a plan and to preserve the property of a debtor’s estate. 63.

The Plaintiffs are entitled to a preliminary injunction under section 105(a)

of the Bankruptcy Code, to enjoin any attempts to enforce any rights or exercise any remedies under the 2015 Notes against the Non-Debtor-Guarantors. 64.

The Court should apply section 105 of the Bankruptcy Code to enjoin the

exercise of remedies under the 2015 Notes, because the exercise of such remedies will precipitate a Termination Event under the European Securitization Program, an Event of Default under the Debtors DIP Credit Facilities and, potentially, a liquidation of the Debtors themselves. 65.

Claims against the Non-Debtor-Guarantors may also cause insolvency

proceedings in foreign jurisdictions and the liquidation of the Non-Debtor-Guarantors would have a very substantial negative impact on the value of the Debtors’ estates. 66.

Additionally, claims against any of the Non-Debtor-Guarantors would

implicate the Debtors, because certain of the Debtors are Guarantors of the 2015 Notes. Defending such claims would impose burdens on the Debtors’ employees and senior management. If the Debtors did not defend any such claims, they would face the risk of negative consequences under the doctrines of collateral estoppel or res judicata. 67.

Any harm suffered by the 2015 Noteholders is vastly outweighed by the

harm suffered by the Debtors in the absence of an injunction. Payment on any claims of the 2015 Noteholders is subordinated to the claims of secured creditors holding billions of dollars of debt. Therefore, demands on the 2015 Notes serve little economic purpose. To the extent the 2015 Noteholders have valid claims against Non-Debtor-Guarantors, they also have valid claims against the Debtor-Guarantors in the identical amount. If the claims proceed now and an -16-

insolvency of Non-Debtor-Guarantors is forced, this will actually decrease the value of the 2015 Noteholders’ claims against their respective Debtor for the reasons set forth above. 68.

For the reasons stated herein, the Debtors are entitled to a preliminary

injunction under section 105(a) of the Bankruptcy Code to enjoin any attempts to enforce any rights or exercise any remedy under the 2015 Notes against the Non-Debtor-Guarantors. RELIEF DEMANDED WHEREFORE, Plaintiff demands judgment as follows: (a)

a preliminary injunction and permanent injunction enjoining until at least

January 31, 2010 Defendant Wilmington Trust and its agents, attorneys and all persons acting in concert or participation with them, and all other persons and entities who receive notice thereof, directly and indirectly from attempting to enforce any rights or exercise any remedy against the Non-Debtor-Guarantors; and (b)

such other and further relief as the Court may deem just and proper.

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Dated: Houston, Texas August 28, 2009 SUSMAN GODFREY LLP /s/ Vineet Bhatia Vineet Bhatia, Esq. David M. Peterson, Esq. SUSMAN GODFREY LLP 1000 Louisiana, Suite 5100 Houston, Texas 77002 Telephone: 713-653-7855 Facsimile: 713-654-3344 Jacob Buchdahl, Esq. SUSMAN GODFREY LLP 654 Madison Ave., 5th Floor New York, New York 10065 Telephone: 212-336-8330 Facsimile: 212-336-8340 Attorneys for Lyondell Chemical Company, et al.

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