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As filed with the Securities and Exchange Commission on August 27, 2010

Registration No. 333-168557

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

CHEMTURA CORPORATION

(DEBTOR-IN-POSSESSION)

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   2820   52-2183153

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

 

 

1818 Market Street, Suite 3700, Philadelphia, PA 19103

199 Benson Road, Middlebury, CT 06749

(203) 573-2000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Billie S. Flaherty

Senior Vice President, General Counsel and Secretary

Chemtura Corporation

199 Benson Road

Middlebury, CT 06749

(203) 573-2000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With a copy to:

Robert M. Hayward, P.C.

Theodore A. Peto

Kirkland & Ellis LLP

300 North LaSalle

Chicago, IL 60654

(312) 862-2000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  x

If this Form is filed to registered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

 

Large accelerated filer   ¨    Accelerated filer   x
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 
Title of Each Class of
Securities to be Registered
  Amount
to be
Registered
  Proposed
Maximum
Aggregate
Offering Price(1)
  Amount of
Registration Fee

Rights to purchase common stock, par value $0.01 per share

      $N/A(2)   $0

Common stock, par value $0.01 per share, issuable upon exercise of rights

      $100,000,000(3)   $7,130.00(4)
 
 

 

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the “Securities Act”).
(2) No separate consideration will be received for the rights to purchase shares of common stock to be distributed to the owners of common stock on the record date.
(3) Represents the aggregate gross proceeds from the exercise of the maximum number of rights that may be issued pursuant to this registration statement.
(4) Previously paid.

 

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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EXPLANATORY NOTE

(NOT PART OF THE PROSPECTUS)

This registration statement relates to the proposed rights offering to eligible holders of common stock (including equivalent interests) in Chemtura Corporation (“Chemtura”), a Delaware corporation, for the new common stock of reorganized Chemtura. On March 18, 2009, Chemtura and 26 of its U.S. subsidiaries (collectively, and including Chemtura Canada Co./Cie as the context requires, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On August 5, 2010, the Debtors filed with the Bankruptcy Court the solicitation version of their joint plan of reorganization (the “Plan”) and accompanying disclosure statement. The Bankruptcy Court approved the disclosure statement on August 5, 2010. A hearing on confirmation of the Plan is scheduled to begin September 16, 2010.

The holder of an “equivalent interest” means an eligible holder as of the rights offering record date of any share of common stock, preferred stock or other instrument evidencing an ownership interest in Chemtura, whether or not transferable, and any option, warrant or other right, contractual or otherwise, to acquire any such interest in Chemtura that existed before the effective date of the Plan, any phantom stock or other similar stock unit provided pursuant to Chemtura’s prepetition employee compensation programs and any claim related to the purchase of interests subject to subordination pursuant to section 510(b) of the U.S. Bankruptcy Code (the “Bankruptcy Code”). Unless otherwise noted or the context otherwise suggests, references in this registration statement to rights offered to eligible holders of Chemtura’s common stock include eligible holders of equivalent interests allowed to participate in the rights offering in accordance with the Plan.

Through the Plan, Chemtura intends to deleverage its balance sheet and improve liquidity, simplify its corporate structure, and reduce its environmental and other liabilities. To effectuate Chemtura’s restructuring and emergence from Chapter 11 as a viable company, the Plan provides for the treatment of claims of creditors and interests of equity holders. In developing the Plan, the Debtors engaged in good faith negotiations with the statutory committee of unsecured creditors (the “Creditors’ Committee”), the committee of equity security holders (the “Equity Committee”) and an ad hoc committee representing certain holders of the Debtors’ notes and unsecured lender claims (the “Ad Hoc Bondholders’ Committee”). In furtherance of the restructuring, Chemtura also proposes to raise new equity capital through the rights offering to be implemented under the Plan, as described herein.

Under the rights offering, Chemtura is not required to make distributions of fractional shares of new common stock. Therefore, only eligible holders owning the requisite number of shares of common stock will be entitled to participate in the offering.

It is expected that this registration statement will become effective prior to the effective date of the Plan. Therefore, except as otherwise noted or suggested by context, all references to our “new common stock” and the capitalization of Chemtura contained in this registration statement mean our new common stock expected to be outstanding and the capitalization of Chemtura following the effectiveness of the Plan, and all references to our “common stock” mean our common stock outstanding prior to such date.

In addition, the financial information incorporated by reference into this registration statement reflects the historical consolidated results of operations and financial condition of Chemtura for the periods presented. That financial information does not reflect, among other things, any effects of the transactions contemplated by the Plan or any fresh-start accounting if required. Upon emergence from Chapter 11, Chemtura may be required to adopt fresh-start accounting based on a measurement immediately before emergence of the reorganization value of its assets compared to its total liabilities. If liabilities exceed the reorganization value of its assets, we will be required to record Chemtura’s assets and liabilities at fair value as of the emergence date in accordance with fresh-start accounting. The fair value of Chemtura’s assets and liabilities as of such date may differ materially from the recorded values of assets and liabilities on the historical consolidated results of operations and financial condition of Chemtura. Further, if fresh-start accounting is required, the financial results and balance sheet of Chemtura after the application of fresh-start accounting may not be comparable to historical trends.


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

Subject to Completion Dated August 27, 2010

Rights Offering for 7,385,524 Shares of New Common Stock

CHEMTURA CORPORATION

(Debtor-in-Possession)

 

 

We are distributing non-transferable rights to subscribe for 7,385,524 shares of our new common stock to eligible holders of our common stock. If you are an eligible holder of at least 32.9383 shares of common stock as of August 24, 2010, you may be eligible to subscribe, on a pro rata basis, for a portion of the 7,385,524 shares of our new common stock reserved for issuance in this rights offering at $13.54 per share. If any of the eligible holders do not subscribe for all of their pro rata allocation of the shares of our new common stock, you may elect to subscribe for the unsubscribed shares, provided that you have already exercised the maximum amount of your initial rights.

The rights expire at 5:00 p.m. (EDT) on September 30, 2010, unless the exercise period is extended by us. We currently do not intend to extend the exercise period. Any rights unexercised at the end of the exercise period will expire without any payment, in respect of such rights, to the holders of those unexercised rights. You should carefully consider whether to exercise your rights prior to the expiration of the rights offering. The manner in which rights may be exercised is described in detail under the heading “The Rights Offering—Exercise of Rights.” If you intend to exercise your rights, you should be careful to comply with these procedures.

We have applied to list our new common stock on the New York Stock Exchange (the “NYSE”) under the symbol “CHMT.”

This rights offering is subject to the confirmation of our Plan and holders of Class 13a interests voting in favor of the Plan. The use of proceeds from the rights offering is described under the heading “Use of Proceeds.”

 

 

Investing in our new common stock involves risks. You should carefully consider the information referred to under the heading “Risk Factors” beginning on page 15 of this prospectus.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is August     , 2010.


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As permitted under the rules of the Securities and Exchange Commission, this prospectus incorporates important business information about Chemtura Corporation that is contained in documents that we have previously filed with the Securities and Exchange Commission but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the Securities and Exchange Commission at www.sec.gov, as well as other sources. See “Incorporation By Reference of Certain Documents.”

You may also obtain copies of the incorporated documents, without charge, upon written or oral request to the office of our Corporate Secretary, Chemtura Corporation, 199 Benson Road, Middlebury, CT 06749.

You should rely only on the information incorporated by reference or provided in this prospectus. We have not authorized anyone else to provide you with different information. These securities are not being offered in any state where the offer is not permitted. You should not assume that the information in this prospectus or the documents incorporated by reference is accurate as of any date other than the date on the front of those documents.

 

 

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ABOUT THIS PROSPECTUS

   1

INCORPORATION BY REFERENCE OF CERTAIN DOCUMENTS

   3

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

   4

TRADEMARKS

   5

QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING

   6

PROSPECTUS SUMMARY

   9

RISK FACTORS

   15

USE OF PROCEEDS

   32

DIVIDEND POLICY

   32

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

   33

DESCRIPTION OF CAPITAL STOCK

   42

THE RIGHTS OFFERING

   46

SHARES OF NEW COMMON STOCK ISSUED IN THE REORGANIZATION ELIGIBLE FOR FUTURE SALES

   52

PLAN OF DISTRIBUTION

   54

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

   55

LEGAL MATTERS

   57

EXPERTS

   57

WHERE YOU CAN FIND MORE INFORMATION

   57

 

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 (which includes exhibits) that we filed with the Securities and Exchange Commission (“SEC”) covering the rights and the shares of our new common stock to be issued upon exercise of the rights. This prospectus does not contain all information contained in the registration statement, certain parts of which are omitted in accordance with the SEC’s rules and regulations. Statements made in this prospectus as to the contents of any other document (including exhibits to the registration statement) are not necessarily complete. You should review the document itself for a thorough understanding of its contents. The registration statement and amendments thereto can be read and reviewed on the SEC’s website located at www.sec.gov or at the SEC offices mentioned under the heading “Where You Can Find More Information.”

On March 18, 2009, Chemtura and 26 of its U.S. subsidiaries (collectively, and including Chemtura Canada Co./Cie as context requires, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On August 5, 2010, the Debtors filed with the Bankruptcy Court the solicitation version of their joint plan of reorganization (as it may be further amended, supplemented or modified, the “Plan”) and accompanying disclosure statement (as it may be further amended, supplemented or modified, the “Disclosure Statement”). The Bankruptcy Court approved the Disclosure Statement on August 5, 2010. A hearing on confirmation of the Plan is scheduled to begin September 16, 2010.

Eligible holders (including holders of equivalent interests) of common stock that exercise rights in this rights offering will acquire their shares covered by this prospectus pursuant to the Plan, which is more fully described herein and in the documents incorporated by reference herein.

The holder of an “equivalent interest” means an eligible holder as of the rights offering record date of any share of common stock, preferred stock or other instrument evidencing an ownership interest in Chemtura, whether or not transferable, and any option, warrant or other right, contractual or otherwise, to acquire any such interest in Chemtura that existed before the effective date of the Plan, any phantom stock or other similar stock unit provided pursuant to Chemtura’s prepetition employee compensation programs and any claim related to the purchase of interests subject to subordination pursuant to section 510(b) of the Bankruptcy Code. Unless otherwise noted or the context otherwise suggests, references in this prospectus to rights offered to eligible holders of Chemtura’s common stock include eligible holders of equivalent interests allowed to participate in the rights offering in accordance with the Plan.

In connection with the Plan, the Debtors were required to prepare projected financial information to demonstrate to the Bankruptcy Court the feasibility of the Plan and the ability of the Debtors to continue operations upon emergence from Chapter 11. These projections should not be considered or relied upon in connection with the purchase of our new common stock. Neither the projections nor any version of the Disclosure Statement was prepared for the purpose of any offering of our new common stock and such information and documents has not been, and may not be, updated on an ongoing basis. The projections reflect numerous assumptions concerning our anticipated future performance and prevailing and anticipated market and economic conditions at the time they were prepared that were and continue to be beyond our control and that may not materialize. Projections are inherently subject to uncertainties and to a wide variety of significant business, economic and competitive risks, including those risks discussed under “Risk Factors” in this prospectus and in the documents incorporated by reference herein.

In addition, while the projections reflect estimates concerning the reorganization and related transactions pursuant to the Plan, the projections do not reflect the comprehensive implementation of “fresh-start” accounting pursuant to Accounting Standards Codification (“ASC”) Section 852-10-45, Reorganizations—Other Presentation Matters. As discussed in detail in the section entitled “Unaudited Pro Forma Condensed Consolidated Financial Information,” our emergence from Chapter 11, the

 

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implementation of the Plan and the potential application of fresh-start accounting may affect our future reported results of operations and make it difficult to compare our historical, pre-emergence results of operations and balance sheets with those that we report in the future. The application of fresh-start accounting may impact our financial results for several months due to inventory fair value adjustments as of the emergence date, but will not have an effect on our cash generated from operations.

As noted in the unaudited pro forma condensed consolidated financial statements, the estimated effects of the application of fresh-start accounting, if required, are preliminary and have been made solely for purposes of developing the Unaudited Pro Forma Condensed Consolidated Financial Information. Fresh-start accounting requires the adjustment of all asset and liabilities of the Company to “fair-value” as of the date of emergence. Updates to such preliminary valuations will be completed as of the emergence date and, to the extent such updates reflect valuations different than those used in the Unaudited Pro Forma Condensed Consolidated Financial Information, there may be adjustments in the fair values of certain assets such as property, plant and equipment and inventory. To the extent actual valuations and allocations differ from those used in calculating the Unaudited Pro Forma Condensed Consolidated Financial Information, these differences will be reflected on our balance sheet upon emergence under fresh-start accounting and may also affect the cost of goods sold in the months following the date of emergence that would be recognized in the statement of operations post-emergence from Chapter 11.

Except as otherwise noted or suggested by context, all references to our “new common stock” and the capitalization of Chemtura contained in this prospectus mean our common stock expected to be outstanding and the capitalization of Chemtura following the effective date of the Plan and all references to our “common stock” mean our common stock outstanding prior to such date.

 

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INCORPORATION BY REFERENCE OF CERTAIN DOCUMENTS

We are “incorporating by reference” specified documents that we file with the SEC, which means that we can disclose important information to you by referring you to those documents that are considered part of this prospectus. We incorporate by reference into this prospectus the documents listed below (other than portions of these documents deemed to be “furnished” or not deemed to be “filed,” including the portions of these documents that are either (1) described in paragraphs (d)(1), (d)(2), (d)(3) or (e)(5) of Item 407 of Regulation S-K or (2) furnished under Item 2.02 or Item 7.01 of a Current Report on Form 8-K, including any exhibits included with such Items):

 

   

our Annual Report on Form 10-K for the year ended December 31, 2009, as amended by Form 10-K/A filed on April 29, 2010;

 

   

our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010; and

 

   

our Current Reports on Form 8-K filed on January 15, 2010 (only with respect to Item 1.01), January 25, 2010, February 5, 2010, February 25, 2010 (only with respect to Item 1.01), March 16, 2010 (only with respect to Item 5.02), April 13, 2010, May 6, 2010, June 7, 2010, July 26, 2010 (as amended on July 28, 2010) July 30, 2010, August 9, 2010, August 10, 2010, August 12, 2010, August 13, 2010, August 17, 2010, August 26, 2010 and August 27, 2010.

Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

Our filings with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, are available free of charge on our website (www.chemtura.com) as soon as reasonably practicable after they are filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this prospectus. You may also obtain a copy of these filings at no cost by writing or telephoning us at the following address:

Chemtura Corporation

199 Benson Road

Middlebury, CT 06749

Attention: Corporate Secretary

(203) 573-2000

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this prospectus and the documents incorporated by reference into this prospectus are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this prospectus under the headings “Prospectus Summary” and “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2009, as amended, and Quarterly Report on Form 10-Q for the period ended June 30, 2010, under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this prospectus under the headings “Prospectus Summary” and “Risk Factors” and in our Annual Report on Form 10-K for the year ended December 31, 2009, as amended, and Quarterly Report on Form 10-Q for the period ended June 30, 2010, under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:

 

   

the ability to complete a restructuring of our balance sheet including the entry into all definitive agreements for our exit financing facilities and satisfaction of any condition precedent to funding set forth therein;

 

   

the ability to have the Bankruptcy Court approve motions required to sustain operations during the Chapter 11 cases;

 

   

the uncertainties of the Chapter 11 cases, including the potential adverse impact on our operations, management, employees and the response of our customers;

 

   

our estimates of the cost to settle proofs of claim presented in the Chapter 11 cases;

 

   

the ability to confirm and consummate the Plan;

 

   

the ability to be compliant with our debt covenants or obtain necessary waivers and amendments;

 

   

the ability to reduce our indebtedness levels;

 

   

the cyclical nature of the global chemicals industry and impact of general economic conditions;

 

   

significant international operations and interests;

 

   

the ability to obtain increases in selling prices to offset increases in raw material and energy costs;

 

   

the ability to retain sales volumes in the event of increasing selling prices;

 

   

the ability to absorb fixed cost overhead in the event of lower volumes;

 

   

underfunded pension and other post-retirement benefit plan liabilities and underlying assumptions;

 

   

the ability to improve profitability in our Industrial Engineered Products segment as the general economy recovers from the recession;

 

   

the ability to implement the El Dorado, Arkansas restructuring program;

 

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the ability to comply with the product registration requirements under the EU REACh legislation;

 

   

the ability to obtain growth from demand for petroleum additive, lubricant and agricultural product applications;

 

   

the ability to restore profitability levels in our Chemtura AgroSolutionsTM segment as demand conditions recover in the agrochemical market;

 

   

disease and pest conditions, as well as local, regional, regulatory and economic conditions which could adversely affect the profitability of our Chemtura AgroSolutionsTM segment;

 

   

the ability to sell methyl bromide due to regulatory restrictions;

 

   

changes in weather conditions which could adversely affect the seasonal selling cycles in both our Consumer Performance Products and Chemtura AgroSolutionsTM segments;

 

   

changes in the availability and/or quality of our energy and raw materials;

 

   

the ability to collect our outstanding receivables;

 

   

changes in interest rates and foreign currency exchange rates;

 

   

changes in technology, market demand and customer requirements;

 

   

the enactment of more stringent U.S. and international environmental laws and regulations;

 

   

the ability to realize expected cost savings under our restructuring plans and lean manufacturing initiatives;

 

   

the ability to recover our deferred tax assets;

 

   

the ability to support the goodwill and long-lived assets related to our businesses; and

 

   

other risks and uncertainties detailed in our filings with the Securities and Exchange Commission.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in, or incorporated by reference into, this prospectus are made only as of their respective dates. We do not undertake and expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

TRADEMARKS

We own or have rights to use the trademarks, service marks and trade names that we use in conjunction with the operation of our businesses. In addition, our names, logos and web site names and addresses are our service marks or trademarks. Some of the more important trademarks that we own or to which we have rights include Anderol®, Aqua Chem®, BAYROL®, BioGuard®, Chemtura AgroSolutionsTM, Cristal®, Greased Lightning®, Guardex®, Hatcol®, Miami®, Mineral Springs®, Naugalube®, Omni®, Poolbrite®, Pool Time®, Pro Guard®, Royco®, Spa Essentials®, SpaGuard®, Spa-Time®, Synton® and The Works®. Each trademark, service mark or trade name of any other company appearing in this prospectus is, to our knowledge, owned or licensed by such other company.

 

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QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING

 

Q: Who is eligible to participate in the rights offering?

 

A: If you hold at least 32.9383 shares of common stock as of the record date, you are eligible to participate in the rights offering.

 

Q: What is a right?

 

A: Each right entitles its holder to purchase one share of new common stock.

 

Q: What was the record date for the rights offering?

 

A: The record date for the rights offering was August 24, 2010.

 

Q: How many rights am I receiving?

 

A: You are receiving one right for every 32.9383 shares of common stock that you own. No eligible holder, however, will be granted or allowed to exercise any fractional rights.

 

Q: How much does a right cost?

 

A: The rights are being distributed to you pursuant to the terms of our Plan, initially filed with the Bankruptcy Court on June 17, 2010, and revised versions of which were filed on July 9, 2010, July 20, 2010 and August 5, 2010. The rights are being distributed to you free of charge.

 

Q: What is the exercise price?

 

A: The exercise price is $13.54 per share. This price was set by agreement among the company and the representatives of its various stakeholder constituencies. If the rights offering is fully subscribed, the exercise price is consistent with our New Chemtura Total Enterprise Value (as such term is defined in the Plan).

 

Q: May I sell or otherwise transfer my rights if I do not want to purchase any shares?

 

A: No. Any independent transfer or attempted transfer of the rights will be null and void and the Debtors will not treat any purported transferee as the holder of such rights.

 

Q: Are there any conditions which must be satisfied for the rights offering to occur?

 

A: Yes. The rights offering is conditioned, among other matters, upon confirmation of the Plan and holders of Class 13a interests voting to approve the Plan. In the event that the Plan is not confirmed or holders of Class 13a interests vote to reject the Plan, under no circumstances shall any holder of shares of common stock have any rights to participate in the rights offering. In that event, all rights exercise forms received by the subscription agent shall be null and void and any payments received by the subscription agent will be refunded, without interest, to the eligible holders as soon as reasonably practicable after the effective date of the Plan. Under no circumstances shall any holder of common stock or an equivalent interest that is not entitled to vote on the Plan be eligible to participate in this rights offering.

 

Q: How will you use the proceeds from the rights offering?

 

A: In accordance with the settlement reached between Chemtura and certain of its major stakeholders, as more fully described herein, all proceeds of the rights offering will be used to partially fund distributions pursuant to the Plan. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors in accordance with the Plan.

 

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Q: How do I exercise my rights?

 

A: The procedure for exercising your rights depends on whether you are a registered holder of common stock or hold your stock through a bank or brokerage firm.

If you are a registered holder of common stock, to exercise your rights, you must complete the rights exercise form by indicating the total number of shares that you want to exercise (which includes the initial pro rata number of shares that a participant is entitled to subscribe for plus any additional shares that such participant subscribes for if the rights offering is undersubscribed) by the expiration deadline. You must also arrange for payment of the total exercise price to the subscription agent, either by wire transfer or by certified bank or cashier’s check, to be received by the subscription agent on or prior to the expiration deadline.

If you hold shares of common stock through a bank, broker or other nominee, you must provide instructions to your bank, broker, or other nominee or agent (the “Subscription Nominees”) regarding the number of initial and additional shares that you want to exercise, and the Subscription Nominee must effect the subscription and deliver payment on your behalf on or prior to the expiration deadline.

 

Q: Do I have to exercise my rights in full?

 

A: No. You are in no way obligated to exercise your rights in full. Any lesser amount will be accepted. Notwithstanding the foregoing, however, to the extent your holdings of our common stock would otherwise entitle you to a fraction of a right, you will not be granted or allowed to exercise any such fractional right.

 

Q: When will I receive the shares I am purchasing by exercising my rights?

 

A: If you properly exercise your rights, you will be deemed to own the shares immediately on the effective date of our Plan. If you hold shares through a Subscription Nominee, any shares you purchase will be delivered electronically to the Subscription Nominee. We will not issue share certificates. Instead, your purchase will be recorded on our books and records as maintained by the company’s transfer agent.

 

Q: When do the rights expire?

 

A: The rights expire, if not exercised, at 5:00 p.m. (EDT) on September 30, 2010, unless the exercise period is extended by us. We currently do not intend to extend the exercise period. See “The Rights Offering—Commencement/Expiration of the Rights Offering.”

 

Q: Am I required to exercise my rights?

 

A: No. However, if you do not exercise your rights prior to the expiration of the rights offering you will lose any value represented by the rights.

 

Q: What happens if I do not exercise my rights?

 

A: If you do not exercise your rights prior to the expiration of the rights offering, your rights will expire and shares of new common stock for which your rights were exercisable, but were not exercised, may be purchased by other eligible holders as part of their oversubscription option.

 

Q: If I exercise my rights in the rights offering, may I withdraw the exercise?

 

A: No.

 

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Q: May I subscribe for more than my pro rata share of the new common stock being offered in the rights offering?

 

A: Yes. If any of the eligible holders do not subscribe for all of their pro rata allocation of the shares of new common stock for which they are entitled to subscribe, other eligible holders may elect to subscribe for the unsubscribed shares. If the total number of shares subscribed for in this oversubscription option exceeds the number of shares being offered, the number of shares that such oversubscribing holders may purchase will be reduced on a pro rata basis.

 

Q: Is there a risk that the rights offering will not be consummated?

 

A: Yes. All exercises of rights are subject to and conditioned upon the confirmation of the Plan and the occurrence of the effective date of the Plan. Furthermore, the rights offering is conditioned upon holders of Class 13a interests voting to accept the Plan. We intend to announce the results of the Plan vote, including whether the holders of Class 13a interests have voted to accept the Plan, on or about September 13, 2010.

 

Q: If the rights offering is not consummated, will my payment be refunded to me?

 

A: Yes. If the rights offering is not consummated, you will be returned your exercise payments, without interest, as soon as practicable.

 

Q: Will I be charged a sales commission or a fee if I exercise my rights?

 

A: No. We will not charge a brokerage commission or a fee to rights holders for exercising their rights. If you exercise your rights through a Subscription Nominee, however, you will be responsible for any fees charged by your Subscription Nominee.

 

Q: What will happen to the common stock I currently own?

 

A: All holders of common stock will have those shares cancelled and be of no further force or effect as of the effective date of our Plan.

 

Q: Have you or your board of directors made a recommendation as to whether I should exercise my rights?

 

A: No. Neither we nor our board of directors has made any recommendation as to whether you should exercise your rights. You should make those decisions based upon your own assessment of your best interests.

 

Q: What are the U.S. federal income tax consequences of the rights offering to me?

 

A: You generally should not recognize gain or loss on the receipt or exercise of your rights for U.S. federal income tax purposes, though you may recognize a loss on their lapse. You should consult your tax advisor as to the particular tax consequences to you of the receipt of rights in the rights offering and the exercise or lapse of the rights, including the applicability of any state, local or non-U.S. tax laws.

 

Q: What should I do if I have other questions?

 

A: If you have any questions about, or require assistance regarding, the procedure for exercising your rights, including the procedure if you have lost your rights exercise form or would like additional copies of this prospectus, or questions about whether your completed rights exercise form or payment has been received, please contact Epiq Bankruptcy Solutions, which is the subscription agent for the rights offering, at:

Epiq Bankruptcy Solutions

757 Third Avenue, 3rd Floor

New York, New York 10017

(866) 734-9387

For a more complete description of the rights offering, see “The Rights Offering.”

 

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PROSPECTUS SUMMARY

This summary highlights some of the information contained elsewhere in or incorporated by reference into this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. You should carefully read this prospectus, including the documents incorporated by reference, which are described under “Incorporation by Reference of Certain Documents” and “Where You Can Find More Information.” You should also carefully consider, among other things, the matters discussed in the section entitled “Risk Factors.”

Unless otherwise noted or suggested by the context, all historical consolidated financial information and data and accompanying financial statements and related notes as contained in this prospectus reflect the actual historical consolidated results of operations and financial condition of Chemtura Corporation for the periods presented and do not give effect to the proposed Plan. As part of the emergence from Chapter 11, Chemtura may be required to adopt fresh-start accounting in a future period.

In this prospectus, except as otherwise indicated or as the context otherwise requires, “Chemtura,” “we,” “our” and “us” refer to Chemtura Corporation, a Delaware corporation. In the discussion of our business in this prospectus, “we,” “our” and “us” also refer to our subsidiaries.

Our Company

We are a leading diversified global developer, manufacturer and marketer of performance-driven engineered specialty chemicals. Most of our products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates that add value to their end products. Our agrochemical products are sold through dealers and distributors to growers and others. Our pool, spa and household chemical products are sold through local dealers, large retailers, independent retailers and mass merchants to consumers for in-home and outdoor use. Our operations are located in North America, Latin America, Europe and Asia. In addition, we have important ventures primarily in the United States and the Middle East, but also in Asia and Europe. We are committed to global sustainability through “green technology” and developing engineered chemical solutions that meet our customers’ evolving needs.

Our principal executive offices are located at 199 Benson Road, Middlebury, CT 06749 and 1818 Market Street, Suite 3700, Philadelphia, PA 19103 and our telephone number is (203) 573-2000.

The Plan of Reorganization

On March 18, 2009, we and 26 of our U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The cases were consolidated for joint administration purposes only and were assigned a lead case number 09-11233 (REG). Our non-U.S. subsidiaries and certain U.S. subsidiaries were not included in the Chapter 11 filing.

On June 17, 2010, the Debtors filed with the Bankruptcy Court a proposed Plan and related Disclosure Statement. The Plan sets forth the contemplated structure of the Debtors that are being reorganized in connection with the Chapter 11 cases at the emergence date and outlines the manner in which the prepetition creditors’ and equity holders’ various claims against and interests in the Debtors will be treated. On August 5, 2010, after filing revised versions of the Plan and Disclosure Statement, the Bankruptcy Court approved the Disclosure Statement and the procedures for the Debtors to solicit votes on the Plan. The hearing to consider confirmation of the Plan is currently scheduled to commence on September 16, 2010. The Bankruptcy Court will confirm the Plan if the requisite type and amount of creditors vote to approve the Plan, and it determines that the Plan otherwise complies with the requirements set forth in section 1129 of the Bankruptcy Code. Although the timing is uncertain and no assurances can be given, we believe that the Bankruptcy Court will confirm a plan of reorganization for the Debtors that would be substantially similar to the Plan described herein.

 

 

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The proposed Plan includes the following key elements, among others:

 

   

The strengthening of the Debtors’ balance sheet through the conversion of certain prepetition debt and claims to equity, contributions to unfunded pension plans and the settlement of many tort and environmental contingencies.

 

   

The costs of emergence, including the cash required for distributions in settlement of certain prepetition claims, will be financed primarily from our exit financing facilities and our excess cash balances resulting from consummation of the Plan and related transactions, including the proceeds from this rights offering.

On August 8, 2010, Chemtura Canada Co./Cie (“Chemtura Canada”) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court and on August 11, 2010, commenced ancillary recognition proceedings under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice, located in Ontario, Canada (the “Canadian Court” and such proceedings, the “Canadian Case”). The Bankruptcy Court entered an order jointly administering Chemtura Canada’s Chapter 11 case with the current Chapter 11 cases under lead case number 09-11233 (REG) and appointed Chemtura Canada as the “foreign representative” for the purposes of the Canadian Case. On August 11, 2010, the Canadian Court entered an order recognizing the Chapter 11 cases as “foreign main proceedings” under the CCAA. These filings are designed only to address in the context of the Plan diacetyl claims asserted against Chemtura Corporation and Chemtura Canada.

To effectuate our restructuring and emergence from Chapter 11 as a viable company, the Plan provides for the treatment of claims of creditors and interests of equity holders. In developing the Plan, the Debtors engaged in good faith negotiations with the statutory committee of unsecured creditors (the “Creditors’ Committee”), the committee of equity security holders (the “Equity Committee”) and an ad hoc committee representing certain holders of the Debtors’ notes and unsecured lender claims (the “Ad Hoc Bondholders’ Committee”). In furtherance of the restructuring, we also propose to raise new equity capital through the rights offering to be implemented under the Plan, as described herein.

The Plan organizes claims against the Debtors into classes according to their relative priority and certain other criteria. For each class, the Plan describes (a) the underlying claim or interest, (b) the recovery available to the holders of claims or interests in that class under the Plan, (c) whether the class is “impaired” under the Plan, meaning that each holder will receive less than the full value on account of its claim or interest or that the rights of holders under law will be altered in some way (such as receiving stock instead of holding a claim) and (d) the form of consideration (e.g., cash, stock or a combination thereof), if any, that such holders will receive on account of their respective claims or interests. Distributions to creditors under the Plan generally will include a combination of new common stock, cash, reinstatement or such other treatment as agreed between the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee) and the applicable creditor. Certain creditors will be eligible to elect, when voting on the Plan, to receive their recovery in the form of the maximum available amount of cash or the maximum available amount of new common stock.

The Plan provides that if eligible holders of Chemtura’s common stock vote as a class to accept the Plan, they will receive their pro rata share (determined with respect to all holders of interests in us) of 5% of new common stock, plus the right to participate in this rights offering. If, however, holders of interests in us vote as a class to reject the Plan, they will receive their pro rata share of value available for distribution, if any, after all allowed claims have been paid in full and certain disputed claims reserves have been established in accordance with the terms of the Plan. All new common stock distributed under the Plan to holders of claims and, if applicable, interests, including new common stock distributed in connection with the rights offering, shall be subject to dilution by certain of our incentive plans.

 

 

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Under the rights offering, we are not required to make distributions of fractional shares of new common stock. Therefore, only eligible holders owning the requisite number of shares of common stock will be entitled to participate in the offering. The Plan is subject to approval by the Bankruptcy Court in accordance with the Bankruptcy Code as well as various other conditions and contingencies, some of which are not within our control. We cannot provide any assurance that any plan of reorganization ultimately confirmed by the Bankruptcy Court will be consistent with the terms of the Plan. Although the Plan provides for our emergence from Chapter 11 as a going concern, there can be no assurance that the Plan, or any other plan of reorganization, will be confirmed by the Bankruptcy Court or that any such plan will be implemented successfully.

The Rights Offering

Through the rights offering, eligible holders of at least 32.9383 shares of common stock will be entitled to purchase, on a pro rata basis, a portion of the 7,385,524 shares of new common stock reserved for issuance in this rights offering for an exercise price of $13.54 per share. If any of the eligible holders do not subscribe for all of their pro rata allocation of the shares of new common stock for which they are entitled to subscribe, other eligible holders may elect to subscribe for the unsubscribed shares. If the total number of shares subscribed for in this oversubscription option exceeds the number of shares being offered, the number of shares that such oversubscribing stockholders may purchase will be reduced on a pro rata basis.

Notwithstanding anything herein to the contrary, under no circumstances shall any holder of common stock that is not entitled to vote on the Plan be eligible to participate in this rights offering. Notwithstanding anything herein to the contrary, in the event that holders of Class 13a interests vote to reject the Plan, under no circumstances shall any holder of shares of common stock have any rights to participate in the rights offering, all rights exercise forms received by the subscription agent shall be null and void and any payments received by the subscription agent will be refunded, without interest, to the eligible holders as soon as reasonably practicable after the effective date of the Plan.

In accordance with the settlement reached between us and our major stakeholders, all of the proceeds that we receive from the rights offering, which would be approximately $100 million if all rights are exercised, will be used to partially fund distributions pursuant to the Plan. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors in accordance with the Plan. The registration statement of which this prospectus forms a part relates to the proposed sale of new common stock offered pursuant to the exercise of rights in the rights offering.

Recent Developments

On August 27, 2010, we completed our previously announced private placement offering of $455 million in aggregate principal amount of 7.875% senior notes due 2018 (the “Senior Notes”). On August 27, 2010, we also entered into the Senior Secured Term Facility Credit Agreement (the “Term Loan Facility Agreement”), among us, Bank of America, N.A., as administrative agent (the “Administrative Agent”), the other agents party thereto and the Initial Lenders and other Lenders party thereto. Under the Term Loan Facility Agreement, the Lenders advanced loans in an aggregate principal amount of $295 million (the “Term Loan”), funded at 99% of such principal amount. We entered into the Senior Notes and Term Loan Facility Agreement as part of our anticipated exit financing package pursuant to our Plan (the “Exit Financing Facilities”). The proceeds from both our Senior Notes and Term Loan Facility Agreement have been placed in escrow pending our emergence from Chapter 11. For additional information see our Current Report on Form 8-K filed August 27, 2010.

 

 

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THE RIGHTS OFFERING

 

Securities Offered

Each eligible holder shall be entitled to purchase up to its pro rata share of the 7,385,524 shares of new common stock made available pursuant to the rights offering.

If any of the eligible holders do not subscribe for all of their pro rata allocation of the shares of new common stock for which they are entitled to subscribe, other eligible holders may elect to subscribe for the unsubscribed shares. If the total number of shares subscribed for in this oversubscription option exceeds the number of shares being offered, the number of shares that each oversubscribing holder may purchase will be reduced on a pro rata basis.

 

Exercise Price

$13.54 per share.

 

Record Date

August 24, 2010.

 

Expiration Deadline

The rights expire, if not previously exercised, at 5:00 p.m. (EDT) on September 30, 2010, unless the exercise period is extended by us. We currently do not intend to extend the exercise period.

 

Use of Proceeds

If all rights are exercised, the proceeds from the rights offering will be approximately $100 million, which will be used to partially fund distributions pursuant to the Plan. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors in accordance with the Plan.

 

Non-Transferability of Rights; Withdrawal

Pursuant to the Plan, the rights are not transferable. Rights may be exercised only by or through the eligible holder entitled to exercise such rights on the record date. Any independent transfer or attempted transfer of the rights will be null and void and the Debtors will not treat any purported transferee as the holder of such rights. Once the rights are exercised, such exercise will not be permitted to be withdrawn.

 

Procedures for Exercise

For those eligible registered holders:

Each such eligible holder that intends to exercise its rights shall designate such intention on its rights exercise form and deliver the completed rights exercise form to the subscription agent prior to the expiration deadline. In addition, any eligible holder that exercises all of its rights initially allocated to it may indicate on its rights exercise form how many additional shares of new common stock such eligible holder wishes to purchase if all of the rights in the rights offering are not initially subscribed for. Along with the rights exercise form, a participating holder shall also deliver full payment (including any amount in respect to the oversubscription option) for the subscription price to the subscription agent prior to the expiration deadline. If any eligible holder fails to deliver a duly completed rights exercise form (or full payment of the subscription price) so that such form and

 

 

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payment is actually received by the subscription agent on or before the expiration deadline, such eligible holder shall be deemed to have relinquished and waived its rights.

 

  For those eligible holders owning shares of common stock through a Subscription Nominee:

To exercise its rights (including pursuant to the overallotment option), such holder must provide instructions to its Subscription Nominee. The Subscription Nominee, in turn, must then convey the instruction through DTC’s Automated Subscription Offer Program (“ASOP”) on or before the expiration deadline. Full payment (including any amount in respect to the oversubscription option) for the subscription price will be made automatically through the ASOP.

If the subscription agent for any reason does not receive a duly completed rights exercise form or equivalent instructions from DTC on or prior to the expiration deadline, and immediately available funds in an amount equal to the subscription price on or prior to the expiration deadline, then each such eligible holder shall be deemed to have relinquished and waived its right to participate in the rights offering. Each eligible holder intending to participate in the rights offering must affirmatively elect to exercise its rights by the expiration deadline.

 

Issuance of New Common Stock

If you properly exercise your rights, you will be deemed to own the shares immediately on the effective date of our Plan.

 

No Recommendation

Neither we nor our board of directors has made any recommendation as to whether you should exercise your rights. You should make those decisions based upon your own assessment of your best interests.

 

Listing of Our New Common Stock

We have applied to list our new common stock on the NYSE under the symbol “CHMT.”

 

Tax Consequences of Rights Offering

You generally should not recognize gain or loss on the receipt, exercise or lapse of your rights for U.S. federal income tax purposes. You should consult your own tax advisor regarding the proper treatment of the rights in your particular circumstances.

 

Subscription Agent

We have appointed Epiq Bankruptcy Solutions to act as the subscription agent for the rights offering.

 

Risk Factors

You should read “Risk Factors” beginning on page 15 before you exercise rights.

 

 

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KEY DATES TO KEEP IN MIND

 

Rights Offering Record Date

August 24, 2010.

 

Confirmation Hearing

Beginning September 16, 2010

 

Expiration Deadline

The rights expire, if not previously exercised, at 5:00 p.m. (EDT) on September 30, 2010, unless the exercise period is extended by us. We currently do not intend to extend the exercise period. Any rights unexercised at the end of the exercise period will expire without any payment to the holders of those unexercised rights.

 

 

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RISK FACTORS

You should consider carefully all of the information set forth in this prospectus and the documents incorporated by reference herein, unless expressly provided otherwise, and, in particular, the risk factors described below and those described in our Annual Report on Form 10-K for the year ended December 31, 2009, as amended, and Quarterly Report on Form 10-Q for the period ended June 30, 2010, and certain of our other filings with the SEC. In addition, those risks described below, elsewhere in this prospectus and in any document incorporated by reference herein are not the only ones we face. Such risks are considered to be the most material. However, there may be other risks and uncertainties not currently known to us or those that we view to be immaterial may become material and adversely affect our future results. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

Risks Related to Our Businesses

The cyclical nature of the chemicals industry causes significant fluctuations in our results of operations and cash flows.

Our historical operating results reflect the cyclical and volatile nature of the supply and demand balance of the chemicals industry. The chemicals industry has experienced alternating periods of inadequate capacity and supply, allowing prices and profit margins to increase, followed by periods when substantial capacity is added, resulting in oversupply, overcapacity, corresponding declining utilization rates and, ultimately, declining prices and profit margins. Some of the markets in which our customers participate, such as the automotive, electronics and building and construction industries, are cyclical in nature, thus posing a risk to us that is beyond our control. These markets are highly competitive, are driven to a large extent by end-use markets and may experience overcapacity, all of which may affect demand for and pricing of our products and result in volatile operating results and cash flows over our business cycle. Future growth in product demand may not be sufficient to utilize current or future capacity. Excess industry capacity may continue to depress our volumes and margins on some products. Our operating results, accordingly, may be volatile, as a result of excess industry capacity, as well as from rising energy and raw materials costs.

Increases in the price of the raw materials or energy utilized for our products may have a material adverse effect on our operating results.

We purchase significant amounts of raw materials and energy for our businesses. The cost of these raw materials and energy, in the aggregate, represents a substantial portion of our operating expenses. The prices and availability of the raw materials we utilize vary with market conditions and may be highly volatile. Over the past few years, we have experienced significant cost increases in purchases of petrochemicals, tin, soybean oil, other raw materials and, our primary energy source, natural gas which has had a negative impact on our operating results.

Although we have attempted, and will continue to attempt, to match increases in the prices of raw materials or energy with corresponding increases in product prices, we may not be able to immediately raise product prices, if at all. Ultimately, our ability to pass on increases in the cost of raw materials or energy to customers is highly dependent upon market conditions. Specifically, there is a risk that raising prices charged to our customers could result in a loss of sales volume. In the past, we have not always been able to pass on increases in the prices of raw materials and energy to our customers, in whole or in part, and there will likely be periods in the future when we will not be able to pass on these price increases. Reactions by our customers and competitors to our price increases could cause us to reevaluate and possibly reverse such price increases, which may raise our operating expenses and negatively affect operating results.

Any disruption in the availability of the raw materials or energy utilized for our products may have a material adverse effect on our operating results.

Across our businesses, there are a limited number of suppliers for some of our raw materials and utilities and, in some cases, the number of sources for and availability of raw materials and utilities is specific to the

 

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particular geographic region in which a facility is located. It is also common in the chemicals industries for a facility to have a sole, dedicated source for its utilities, such as steam, electricity and gas. Having a sole or limited number of suppliers may result in our having limited negotiating power, particularly during times of rising raw material costs. Even where we have multiple suppliers for a raw material or utility, these suppliers may not make up for the loss of a major supplier. Moreover, any new supply agreements we enter into may not have terms as favorable as those contained in our current supply agreements. For some of our products, the facilities or distribution channels of raw material and utility suppliers and our production facilities form an integrated system, which limits our ability to negotiate favorable terms in supply agreements.

In addition, as part of an increased trend towards vertical integration in the chemicals industry, other chemical companies are purchasing raw material suppliers. This is further reducing the available suppliers for certain raw materials.

If one or more of our significant raw material or utility suppliers were unable to meet its obligations under present supply arrangements, raw materials become unavailable within the geographic area from which they are now sourced, or supplies are otherwise constrained or disrupted, our businesses could be forced to incur increased costs for our raw materials or utilities, which would have a direct negative impact on plant operations and may adversely affect our results of operations and financial condition.

Decline in general economic conditions and other external factors may adversely impact our operations.

External factors, including domestic and global economic conditions, international events and circumstances, competitor actions and government regulation, are beyond our control and can cause fluctuations in demand and volatility in the prices of raw materials and other costs that can intensify the impact of economic cycles on our operations. We produce a broad range of products that are used as additives and components in other products in a wide variety of end-use markets. As a result, our products may be negatively impacted by supply and demand instability in other industries and the effects of that instability on supply chain participants. Economic and political conditions in countries in which we operate may also adversely impact our operations. For example, some countries in Central and Eastern Europe have been particularly adversely affected by the recent global financial crisis, and rising government deficits and indebtedness levels, protracted credit market tightness and other challenging European market conditions have negatively affected, and could continue to negatively affect, our businesses. Although our diversified product portfolio and international presence lessen our dependence on a single market and exposure to economic conditions or political instability in any one country or region, our businesses are nonetheless sensitive to changes in economic conditions. Accordingly, financial crises and economic downturns anywhere in the world could adversely affect our results of operations, cash flow and financial condition.

Competition may adversely impact our results of operations.

We face significant competition in many of the markets in which we operate due to the trend toward global expansion and consolidation by competitors. Some of our existing competitors are larger than we are and may have more resources and better access to capital markets to facilitate continued expansion or new product development. Additionally, some of our competitors have greater product range and distributional capability than we do for certain products and in specific regions. We also expect that we will continue to face new competitive challenges as well as additional risks inherent in international operations in developing regions. We are susceptible to price competition in certain markets in which customers are sensitive to changes in price. At the same time, we also face downward pressure on prices from industry overcapacity and lower cost structures in certain businesses. The further use and introduction of generic and alternative products by our competitors may result in increased competition and could require us to reduce our prices and take other steps to compete effectively. These measures could negatively affect our financial condition, results of operations and cash flows. Alternatively, if we were to increase prices in response to this competition, the reactions of our competitors and customers to such price increases could cause us to reevaluate and possibly reverse such price increases or risk a loss in sales volumes.

 

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Our inability to register our products in member states of the European Union under the REACh legislation may lead to some restrictions or cancellations of registrations, which could impact our ability to manufacture and sell certain products.

In December 2006, the European Union signed the Registration, Evaluation and Authorization of Chemicals (“REACh”) legislation. This legislation requires chemical manufacturers and importers in the European Union to demonstrate the safety of the chemical substances contained in their products via a substance registration process. The full REACh registration process will be phased in over the next ten years. The registration process will require capital and resource commitments to compile and file comprehensive chemical dossiers regarding the use and attributes of each chemical substance manufactured or imported by Chemtura and will require us to perform chemical safety assessments. Successful registration under REACh will be a functional prerequisite to the continued sale of our products in the European Union market. Thus, REACh presents a risk to the continued sale of our products in the European Union should we be unable or unwilling to complete the registration process or if the European Union seeks to ban or materially restrict the production or importation of the chemical substances used in our products.

Adverse weather or economic conditions could materially affect our results of operations.

Sales volumes for the products in Chemtura AgroSolutions™, like all agricultural products, are subject to the sector’s dependency on weather, disease and pest infestation conditions. Adverse weather conditions in a particular region could materially adversely affect Chemtura AgroSolutions™. Additionally, our Chemtura AgroSolutions™ products are typically sold pursuant to contracts with extended payment terms in Latin America and Europe. Customary extended payment periods, which are tied to particular crop growing cycles, render Chemtura AgroSolutions™ susceptible to losses from receivables during economic downturns and may adversely affect our results of operations and cash flows.

Our pool and spa products in our Consumer segment are primarily used in swimming pools and spas. Demand for these products is influenced by a variety of factors, including seasonal weather patterns. An adverse change in weather patterns, such as the unseasonably cold and wet summers in the United States in 2008 and 2009, could negatively affect the demand for, and profitability of, our pool and spa products.

Demand for Chemtura AgroSolutions™ products is affected by governmental policies.

Demand for our Chemtura AgroSolutions™ products is also influenced by the agricultural policies of governments and regulatory authorities, particularly in developing countries in Asia and Latin America, where we conduct business. Moreover, changes in governmental policies or product registration requirements could have an adverse impact on our ability to market and sell our products.

Current and future litigation, governmental investigations, prosecutions and administrative claims, including antitrust-related governmental investigations and lawsuits, could harm our financial condition, results of operations and cash flows.

We have been involved in several significant lawsuits and claims relating to environmental and chemical exposure matters, and may in the future be involved in similar litigation. Additionally, we are routinely subject to other civil claims, litigation and arbitration and regulatory investigations arising in the ordinary course of our business as well as with respect to our divested businesses. Some of these claims and lawsuits relate to product liability claims, including claims related to current and former products and asbestos-related claims concerning the premises and historic products of us and our predecessors. We could become subject to additional claims. An adverse outcome of these claims could have a materially adverse effect on our business, financial conditions, results of operations and cash flows.

We have also been involved in a number of governmental investigations, prosecutions and administrative claims in the past, including antitrust-related governmental investigations and civil lawsuits, and may in the

 

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future be subject to similar claims. Additionally, we have incurred and could again incur expenses in connection with antitrust-related matters, including expenses related to our cooperation with governmental authorities and defense-related civil lawsuits.

Environmental, health and safety regulation matters could have a negative impact on our results of operations and cash flows.

We are subject to extensive federal, state, local and foreign environmental, health and safety laws and regulations concerning, among other things, emissions in the air, discharges to land and water and the generation, handling, treatment and disposal of hazardous waste and other materials. Our operations entail the risk of violations of those laws and sanctions for violations such as clean-up and removal costs, long-term monitoring and maintenance costs, costs of waste disposal, natural resource damages and payments for property damage and personal injury. Although it is our policy to comply with such laws and regulations, it is possible that we have not been or may not be at all times in compliance with all of these requirements.

Additionally, these requirements, and enforcement of these requirements, may become more stringent in the future. The ultimate additional cost of compliance with any such requirements could be material. Non-compliance could subject us to material liabilities such as government fines or orders, criminal sanctions, third-party lawsuits, remediations and settlements, the suspension, modification or revocation of necessary permits and licenses, or the suspension of non-compliant operations. We may also be required to make significant site or operational modifications at substantial cost. Future regulatory or other developments could also restrict or eliminate the use of, or require us to make modifications to, our products, packaging, manufacturing processes and technology, which could have a significant adverse impact on our financial condition, results of operations and cash flows.

At any given time, we may be involved in claims, litigation, administrative proceedings, settlements and investigations of various types in a number of jurisdictions involving potential environmental liabilities, including clean-up costs associated with hazardous waste disposal sites, natural resource damages, property damage, personal injury and regulatory compliance or non-compliance. The resolution of these environmental matters could have a material adverse effect on our results of operations and cash flows.

Recent federal regulations aimed at increasing security at certain chemical production plants, and similar legislation that may be proposed in the future, could require us to enhance plant security and to alter or discontinue our production of certain chemical products, thereby increasing our operating costs and causing an adverse effect on our results of operations.

Regulations have recently been issued by the U.S. Department of Homeland Security (“DHS”) aimed at decreasing the risk, and effects, of potential terrorist attacks on chemical plants located within the United States. Pursuant to these regulations, these goals would be accomplished in part through the requirement that certain high-priority facilities develop a prevention, preparedness, and response plan after conducting a vulnerability assessment. In addition, companies may be required to evaluate the possibility of using less dangerous chemicals and technologies as part of their vulnerability assessments and prevention plans and implementing feasible safer technologies in order to minimize potential damage to their facilities from a terrorist attack. Certain of our sites are subject to these regulations and we cannot state at this time with certainty the costs associated with any security plans that DHS may require. These regulations may be revised further, and additional legislation may be proposed in the future on this topic. It is possible that such future legislation could contain terms that are more restrictive than what has recently been passed and which would be more costly to us. We cannot predict the final form of currently pending legislation, or other related legislation that may be passed and can provide no assurance that such legislation will not have an adverse effect on our results of operations in a future reporting period. In addition, the failure to comply with these regulations could result in liability to us for any subsequent damages.

 

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We operate on an international scale and are exposed to risks in the countries in which we have significant operations or interests. Changes in foreign laws and regulatory requirements, export controls or international tax treaties could adversely affect our results of operations and cash flows.

We are dependent, in large part, on the economies of the countries in which we manufacture and market our products. Of our 2009 net sales, 49% were to customers in the United States and Canada, 31% to Europe and Africa, 15% to the Asia/Pacific region and 5% to Latin America. As of June 30, 2010, our net property, plant and equipment were located as follows: 66% in the United States and Canada, 27% in Europe and Africa, 5% in the Asia/Pacific region and 2% in Latin America.

The economies of countries in these areas are in different stages of socioeconomic development. Consequently, we are exposed to risks from changes in foreign currency exchange rates, interest rates, inflation, governmental spending, social instability and other political, economic or social developments that may materially adversely affect our financial condition, results of operations and cash flows.

We may also face difficulties managing and administering an internationally dispersed business. In particular, the management of our personnel across several countries can present logistical and managerial challenges. Additionally, international operations present challenges related to operating under different business cultures and languages. We may have to comply with unexpected changes in foreign laws and regulatory requirements, which could negatively impact our operations and ability to manage our global financial resources. Export controls or other regulatory restrictions could prevent us from shipping our products into and from some markets. Moreover, we may not be able to adequately protect our trademarks and other intellectual property overseas due to uncertainty of laws and enforcement in a number of countries relating to the protection of intellectual property rights. Changes in tax regulation and international tax treaties could significantly reduce the financial performance of our foreign operations or the magnitude of their contributions to our overall financial performance.

If we fail to establish and maintain adequate internal controls over financial reporting, we may not be able to report our financial results in a timely and reliable manner, which could harm our business and impact the value of our securities.

We depend on our ability to produce accurate and timely financial statements in order to run our business. If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the accuracy of our financial statements and effectiveness of our internal controls, as required by Section 404 of the Sarbanes-Oxley Act. Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. If we cannot provide reliable financial reports and effectively prevent fraud, our reputation and operating results could be harmed. Even effective internal controls have inherent limitations including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. In addition, projections of any evaluation of effectiveness of internal control over financial reporting in future periods are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement, including with respect to income tax accounts and international customer incentive, commission and promotional payment practices. We have completed the previously disclosed review of various customer incentive, commission and promotional payment practices of the Chemtura AgroSolutions™ segment (formerly known as Crop Protection Engineered Products) in its Europe, Middle East and Africa region. The review was conducted under the oversight of the Audit Committee of the Board of Directors and with the assistance of outside counsel and forensic accounting consultants. As disclosed previously, the review found evidence of various suspicious payments made to persons in certain Central Asian countries and of activity intended to

 

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conceal the nature of those payments. The amounts of these payments were reflected in our books and records but were not recorded appropriately. In addition, the review found evidence of payments that were not recorded in a transparent manner, including payments that were redirected to persons other than the customer, distributor or agent in the particular transaction. None of these payments were subject to adequate internal control. We have strengthened our worldwide internal controls relating to customer incentives and sales agent commissions and enhanced our global policy prohibiting improper payments, which contemplates, among other things, that we monitor our international operations. Such monitoring may require that we investigate allegations of possible improprieties relating to transactions and the way in which such transactions are recorded. We have severed our relationship with all of the sales agents, and the employees responsible for the suspicious payments no longer are, or by the end of the year, no longer will be our employees. We cannot reasonably estimate the nature or amount of monetary or other sanctions, if any, that might be imposed as a result of the review.

If we fail to remedy these deficiencies or otherwise fail to maintain adequate internal controls, including any failure to implement new or improved controls, or if we experience difficulties in their implementation, we could fail to meet our reporting obligations, and there could be a material adverse effect on our business and financial results. In the event that our current control practices deteriorate, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our securities may be adversely affected.

Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations.

Significant portions of our businesses are conducted in currencies other than the U.S. dollar. Accordingly, foreign currency exchange rates affect our operating results. Effects of exchange rate fluctuations upon our future operating results cannot be predicted because of the number of currencies involved, the variability of currency exposure and the potential volatility of currency exchange rates. We face risks arising from the imposition of exchange controls and currency devaluations. Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. In certain foreign countries, some components of our cost structure are denominated in U.S. dollars while our revenues are denominated in the local currency. In those cases, currency devaluation could adversely impact our operating margins.

We are dependent upon a trained, dedicated sales force, the loss of which could materially affect our operations.

Many of our products are sold and supported through dedicated staff and specifically trained personnel. The loss of this sales force due to our Chapter 11 proceedings or other conditions could affect our ability to sell and support our products effectively, which could have an adverse effect on our results of operations.

A drilling moratorium in the U.S. Gulf of Mexico in response to the current oil spill in the Gulf of Mexico, could adversely affect our flame retardants business.

As has been widely reported, on April 20, 2010, a fire and explosion occurred onboard the semisubmersible drilling rig Deepwater Horizon, leading to the oil spill currently affecting the Gulf of Mexico. In response to this incident, the Minerals Management Service (now known as the Bureau of Ocean Energy Management, Regulation and Enforcement, or “BOE”) of the U.S. Department of the Interior issued a notice on May 30, 2010 implementing a six-month moratorium on certain drilling activities in the U.S. Gulf of Mexico. Implementation of the moratorium was blocked by a U.S. District Court, which was subsequently affirmed on appeal, but on July 12, 2010, the BOE issued a new moratorium that applies to deep-water drilling operations that use subsea blowout preventers or surface blowout preventers on floating facilities. The new moratorium will last until November 30, 2010, or until such earlier time that the BOE determines that deep-water drilling operations can proceed safely.

 

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Our flame retardants business produces products which are used in older drilling rigs in the Gulf of Mexico. While this business had already experienced decreased demand for products used in deep sea drilling for oil and gas for some time due to reduced rig count in the Gulf of Mexico due to high natural gas inventories, the temporary moratorium on drilling in the Gulf of Mexico will likely delay any recovery in demand for these products.

Production facilities are subject to operating risks that may adversely affect our financial condition, results of operations and cash flows.

We are dependent on the continued operation of our production facilities. Such production facilities are subject to hazards associated with the manufacturing, handling, storage and transportation of chemical materials and products, including pipeline leaks and ruptures, explosions, fires, inclement weather and natural disasters, terrorist attacks, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, remediation complications, chemical spills, discharges or releases of toxic or hazardous gases, storage tank leaks and other environmental risks. These hazards can cause personal injury and loss of life, severe damage to, or destruction of, property and equipment and environmental damage, fines, civil or criminal penalties and liabilities. The occurrence of these events may disrupt production which could have an adverse effect on the production and profitability of a particular manufacturing facility and our business, financial condition, results of operations and cash flows.

Our businesses depend upon many proprietary technologies, including patents, licenses and trademarks. Our competitive position could be adversely affected if we fail to protect our patents or other intellectual property rights or if we become subject to claims that we are infringing upon the rights of others.

Our intellectual property is of particular importance for a number of the specialty chemicals that we manufacture and sell. The trademarks and patents that we own may be challenged, and because of such challenges, we could eventually lose our exclusive rights to use and enforce such proprietary technologies and marks, which would adversely affect our competitive position and results of operations. We are licensed to use certain patents and technology owned by other companies, including foreign companies, to manufacture products complementary to our own products. We pay royalties for these licenses in amounts not considered material, in the aggregate, to our consolidated results. We cannot assure you that such licensors will adequately maintain or protect or enforce such licensed technology, or that such licenses will continue to be available on current terms, which may impair our ability to offer certain products and may require us to seek licenses on less favorable terms.

In connection with our introduction and development of the Chemtura AgroSolutions™ brand, we have filed applications to register the Chemtura AgroSolutions™ trademark. In April 2010, a third party filed an opposition to one such filing in the United States for the registration of the Chemtura AgroSolutions™ mark in connection with agricultural herbicides and pesticides. If such opposition is successful, we may be unable to prevent competitors from using marks similar to Chemtura AgroSolutions™ in the United States, and may be subject to further challenges which may prevent us from using the Chemtura AgroSolutions™ mark in the United States.

We also rely on unpatented proprietary know-how and continuing technological innovation and other trade secrets to develop and maintain our competitive position. Although it is our policy to enter into confidentiality agreements with our employees and third parties to restrict the use and disclosure of trade secrets and proprietary know-how, those confidentiality agreements may be breached. Additionally, adequate remedies may not be available in the event of an unauthorized use or disclosure of such trade secrets and know-how, and others could obtain knowledge of such trade secrets through independent development or other access by legal means. The failure of our patents, trademarks or confidentiality agreements to protect our processes, apparatuses, technology, trade secrets or proprietary know-how and the brands under which we market and sell our products could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

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We cannot assure you that our products or methods do not infringe on the patents or other intellectual property rights of others. Infringement and other intellectual claims or proceedings brought against us, whether successful or not, could result in substantial costs and harm our reputation. Such claims and proceedings can also distract and divert management and key personnel from other tasks important to the success of our business. In addition, intellectual property litigation or claims could force us to do one or more of the following:

 

   

cease selling products that contain asserted intellectual property;

 

   

pay substantial damages for past use of the asserted intellectual property;

 

   

obtain a license from the holder of the asserted intellectual property, which may not be available on reasonable terms; and

 

   

redesign or rename, in the case of trademark claims, our products to avoid infringing the rights of third parties.

Such requirements could adversely affect our revenue, increase costs, and harm our financial condition.

Our patents may not provide full protection against competing manufacturers outside of the United States, the European Union countries and certain other developed countries. Weaker protection may adversely impact our sales and results of operations.

In some of the countries in which we operate, such as China, the laws protecting patent holders are significantly weaker than in the United States, countries in the European Union and certain other developed countries. Weaker protection may assist competing manufacturers in becoming more competitive in markets in which they might not have otherwise been able to introduce competing products for a number of years. In these regions, we, therefore, tend to rely more heavily upon trade secret and know-how protection, as applicable, rather than patents. Additionally, for our Chemtura AgroSolutions™ products sold in China, we rely on regulatory protection of intellectual property provided by regulatory agencies, which may not provide us with complete protection against competitors.

An inability to remain technologically innovative and to offer improved products and services in a cost-effective manner could adversely impact our operating results.

Our operating results are influenced in part by our ability to introduce new products and services that offer distinct value to our customers. For example, both our Chemtura AgroSolutions™ business and our organometallic specialties business seek to provide tailored products for customers’ often unique problems, which requires an ongoing level of innovation. In many of the markets where we sell our products, the products are subject to a traditional product life cycle. Even where we devote significant human and financial resources to develop new technologically advanced products and services, we may not be successful in these efforts.

Joint venture investments that we make could be adversely affected by our lack of sole decision-making authority, our reliance on joint venture partners’ financial condition and disputes between us and our joint venture partners.

A portion of our operations is conducted through certain ventures in which we share control with third parties. In these situations, we are not in a position to exercise sole decision-making authority regarding the facility, partnership, joint venture or other entity. Investments through partnerships, joint ventures, or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that joint venture partners might become bankrupt, fail to fund their share of required capital contributions, make poor business decisions or block or delay necessary decisions. Joint venture partners may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor our joint venture partners would

 

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have full control over the partnership or joint venture. Disputes between us and our joint venture partners may result in litigation or arbitration that would increase our expenses and prevent the members of our management team from focusing their time and effort on our business. Consequently, action by, or disputes with, our joint venture partners might result in subjecting the facilities owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our joint venture partners. Our joint ventures’ unfunded and underfunded pension plans and post-retirement health care plans could adversely impact our financial condition, results of operations and cash flows.

Our unfunded and underfunded defined benefit pension plans and post-retirement welfare benefit plans could adversely impact our financial condition, results of operations and cash flows.

The cost of our defined benefit pension and post-retirement welfare benefit plans is incurred over long periods of time and involves many uncertainties during those periods of time. Our funding policy for defined benefit pension plans is to accumulate plan assets that, over the long run, will approximate the present value of projected benefit obligations. Our pension cost is materially affected by the discount rate used to measure pension obligations, the level of plan assets available to fund those obligations at the measurement date and the expected long-term rate of return on plan assets. Significant changes in investment performance or a change in the portfolio mix of invested assets can result in corresponding increases and decreases in the valuation of plan assets or in a change of the expected rate of return on plan assets. Similarly, our post-retirement welfare benefit cost is materially affected by the discount rate used to measure these obligations, as well as by changes in the actual cost of providing these medical and other welfare benefits.

We have underfunded obligations under our U.S. tax-qualified defined benefit pension plans totaling approximately $249 million on a projected benefit obligation basis as of December 31, 2009. We also have underfunded obligations under our U.K. defined benefit plan. Further declines in the value of the plan investments or unfavorable changes in law or regulations that govern pension plan funding could materially change the timing and amount of required funding. Additionally, we sponsor foreign and non-qualified U.S. pension plans under which there are substantial unfunded liabilities totaling approximately $191 million on a projected benefit obligation basis as of December 31, 2009. Foreign regulatory authorities may seek to have us take responsibility for some portion of these obligations. Mandatory funding contributions with respect to these obligations and potential unfunded benefit liability claims could have a material adverse effect on our financial condition, results of operations or future cash flows. In addition, our actual costs with respect to our post-retirement welfare benefit plans could exceed our current actuarial projections.

We may be required to fund the pension plan of our U.K. subsidiary, which would have an adverse effect on our results of operations.

In addition, certain of the Debtors’ subsidiaries and affiliates sponsor pension plans in their respective countries that are or may be underfunded. Non-Debtor Chemtura Manufacturing U.K. Limited sponsored the Great Lakes U.K. Limited Pension Plan (the “U.K. Pension Plan”), an occupational pension scheme that was established and participated in the U.K. Pension Plan in order to provide pensions and other benefits, most of which are defined benefits in nature based on pensionable salary. The U.K. Pension Plan provides benefits to approximately 580 pensioners and 690 members entitled to deferred payment of defined benefits. Although an actuarial valuation as of December 31, 2008 is still being finalized, the estimated funding deficit as of June 30, 2009, as measured in accordance with section 75 of the Pension Act of 1995 (U.K.) is approximately £95 million.

The Trustees of the U.K. Pension Plan have filed 27 contingent, unliquidated proofs of claim against each of the Debtors. On July 8, 2010, the Debtors filed an objection seeking to disallow and expunge these proofs of claim. We cannot assure you that the claims will be disallowed or that such claims would be treated as prepetition unsecured claims or that litigation will not ensue with respect to such claims in the Bankruptcy Court. As a result, we may have exposure as a consequence of the U.K. Pension Plan’s liabilities, which could have a material adverse effect on our results of operations and financial condition.

 

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We are subject to risks associated with possible climate change legislation, regulation and international accords.

Greenhouse gas emissions have increasingly become the subject of a large amount of international, national, regional, state and local attention. Cap and trade initiatives to limit greenhouse gas emissions have been enacted in the European Union. Similarly, numerous bills related to climate change have been introduced in the U.S. Congress, which could adversely impact all industries. The Environmental Protection Agency (“EPA”) is using existing laws to impose obligations, including reporting obligations, permitting requirements, and certain emissions control requirements on certain large stationary source greenhouse gas emitters. In addition, future regulation of greenhouse gas could occur pursuant to future international treaty obligations, statutory or further regulatory changes, including under the Clean Air Act or new climate change legislation. While not all are likely to become law, there is a strong indication that additional climate change related mandates will be forthcoming, and may impact our costs by increasing energy costs and raw material prices and establishing costly emissions trading schemes or emissions limitations, and requiring modification of equipment.

A step toward federal restriction on greenhouse gas emissions was taken on December 7, 2009, when the EPA issued its Endangerment Finding in response to a decision of the Supreme Court of the United States. The EPA found that the emission of six greenhouse gases, including carbon dioxide (which is emitted from the combustion of fossil fuels), may reasonably be anticipated to endanger public health and welfare. Based on this finding, the EPA defined the mix of these six greenhouse gases to be “air pollution” subject to regulation under the Clean Air Act. Although the EPA has stated a preference that greenhouse gas regulation be based on new federal legislation rather than the existing Clean Air Act, certain major emitters of greenhouse gases emissions are the subject of recent EPA rulemakings promulgated under the Clean Air Act. For example, the EPA has issued additional regulatory requirements for certain major sources to report greenhouse gas emissions and for certain large industrial facilities to obtain permits and to install emissions control technologies.

The U.S. Congress is considering legislation that would create an economy-wide “cap-and-trade” system that would establish a limit (or cap) on overall greenhouse gas emissions and create a market for the purchase and sale of emissions permits or “allowances.” Under the leading cap-and-trade proposals before Congress, the chemical industry likely would be affected due to anticipated increases in energy costs as fuel providers pass on the cost of the emissions allowances, which they would be required to obtain, to cover the emissions from fuel production and the eventual use of fuel by us or our energy suppliers. In addition, cap-and-trade proposals would likely increase the cost of energy, including purchases of steam and electricity, and certain raw materials used by us. Other countries are also considering or have implemented “cap-and-trade” systems. Future environmental regulatory developments related to climate change are possible, which could materially increase operating costs in the chemical industry and thereby increase our manufacturing and delivery costs.

If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.

Under U.S. generally accepted accounting principles (“GAAP”), we review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested for impairment on July 31 of each year. Factors that may be considered a change in circumstances, indicating that the carrying value of our goodwill or amortizable intangible assets may not be recoverable, include a decline in stock price and market capitalization, reduced future cash flow estimates, and slower growth rates in our industry. We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined, negatively impacting our results of operations.

We do not yet know all of the persons who will serve on our board of directors after the Emergence Date.

On the emergence date, our board of directors will consist of nine directors, one of whom will be the chief executive officer. The Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee have established a board selection committee to select eight members of the board of directors in addition to the chief

 

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executive officer. The board selection committee, which will be advised by an independent search firm, will be charged with working together to try to reach consensus upon a list of proposed board members. In the event, however, that consensus is not reached by the board selection committee, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee shall, together, be entitled to designate six members of the board of directors and the Debtors will be entitled to designate two members. Each designated member of the board of directors will meet minimum eligibility requirements consistent with service on the board of a public company of comparable size to Chemtura and the other Debtors, with such minimum requirements to be identified by the independent search firm advising the board selection committee. As a result, we do not yet know who the persons who will serve on our board of directors after the emergence date will be, and their interests may conflict with your interests.

Risks Related to Chapter 11 and Emergence from Chapter 11

We may be subject to claims that were not discharged in the Chapter 11 cases, which could have a material adverse effect on our results of operations and profitability.

The Plan will only resolve claims against those of our subsidiaries that were parties to the Chapter 11 proceedings. In addition, certain material claims against the Debtors will not be resolved pursuant to the Plan and will remain with us after we emerge from Chapter 11. Furthermore, certain claims that should have been resolved pursuant to the Plan may not be discharged. Pursuant to the terms of the Plan, the provisions of the Plan constitute a good faith compromise of all claims, interests and controversies relating to the contractual, legal and subordination rights that a holder of a claim or an interest may have with respect to any allowed claim or interest, or any distribution to be made on account of such allowed claim or interest, with respect to the Debtors subject to the Chapter 11 proceedings. Circumstances in which claims and other obligations that arose prior to our Chapter 11 filings may not be discharged include, among other things, instances where a claimant had inadequate notice of the Chapter 11 filings. We anticipate that the largest claims which will not be resolved through the Chapter 11 proceedings will be our ongoing pension liabilities, liabilities for other post employment benefits, certain environmental liabilities for our owned and operated facilities and some off site locations and certain tort liabilities for injuries that are known to us or that do not manifest themselves until after we emerge from Chapter 11.

Our actual financial results may vary significantly from the projections filed with the Bankruptcy Court.

In connection with the Disclosure Statement and the hearing to consider confirmation of the Plan, we prepared projected financial information to demonstrate to the Bankruptcy Court the feasibility of the Plan and our ability to continue operations upon our emergence from the Chapter 11 cases. This information was not audited or reviewed by our independent public accountants. These projections were prepared for the purpose of the Chapter 11 cases and not for the purpose of this rights offering and have not been, and will not be, updated on an ongoing basis. These projections are not included in, or incorporated by reference into, this prospectus and should not be relied upon in connection with the exercise of rights. At the time they were prepared, the projections reflected numerous assumptions concerning our anticipated future performance and with respect to prevailing and anticipated market and economic conditions that were and remain beyond our control and that may not materialize. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections and/or valuation estimates may prove to be wrong in material respects. Actual results may vary significantly from those contemplated by the projections that were prepared in connection with the Disclosure Statement and the hearing to consider confirmation of the Plan. As a result, you should not consider or rely on such projections in deciding whether to exercise your rights.

Following our emergence from Chapter 11, our historical consolidated financial information included in this prospectus may not be comparable to financial information for future periods.

Following our emergence from Chapter 11, we will operate our existing businesses under a new capital structure, and we may have to adopt “fresh-start” accounting. If required, under fresh-start accounting, assets and

 

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liabilities will be recorded at fair value, based on values determined in connection with the implementation of our Plan. Certain reported assets do not yet give effect to the adjustments that would result from the adoption of fresh-start accounting and, as a result, would change materially. Accordingly, our balance sheet and results of operations from and after the date of our emergence from Chapter 11 may not be comparable to the balance sheet or results of operations reflected in our historical consolidated financial statements included elsewhere in this prospectus.

We have made certain assumptions regarding the effects of the application of fresh-start accounting, which may differ materially from the actual effect of the adoption of fresh-start accounting, if required.

In preparing the Unaudited Pro Forma Condensed Consolidated Financial Information included in this prospectus, we have made certain assumptions regarding the application of fresh-start accounting to our historical consolidated financial information. For example, we have made certain assumptions regarding the reorganization value of our assets upon emergence and the fair values of identifiable assets and liabilities. In the event we are required to adopt fresh-start accounting, it is possible that the final reorganization value of our assets and the final fair value of our identifiable assets and liabilities will be different from the amounts used in the preparation of the Unaudited Pro Forma Condensed Consolidated Financial Information contained in this prospectus. Therefore, actual amounts of identifiable assets and liabilities may differ from the amounts reflected in our Unaudited Condensed Consolidated Pro Forma Financial Information. The fair value adjustment to plant, property and equipment together with intangibles may result in different depreciation and amortization expenses than reflected in the Unaudited Pro Forma Condensed Consolidated Financial Information, although this amortization would have no impact on our cash flows. In addition, fair value adjustments of inventory upon the adoption of fresh-start accounting will increase our cost of goods sold, reducing profitability until that inventory is sold. As a result, our financial statements prepared after we emerge from Chapter 11 may be materially different from those set forth in this prospectus.

Our historical consolidated financial statements state that uncertainties related to our emergence from Chapter 11 protection raise substantial doubt about our ability to continue as a going concern.

This prospectus incorporates by reference our audited consolidated balance sheets as of December 31, 2009, and 2008 and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2009 prepared in accordance with GAAP. Our financial statements as of December 31, 2009 and 2008 state that uncertainties inherent in our Chapter 11 process and recurring losses from continuing operations raise substantial doubt about our ability to continue as a going concern. Although we believe that as of the date of our emergence from Chapter 11, the basis for the uncertainties relating to our ability to continue as a going concern will no longer exist, we cannot assure you that a similar disclosure will not be included in future financial statements.

Regardless of the foregoing, our historical consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which assumes that we will be able to meet our obligations and continue our operations over a reasonable length of time. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should we be unable to continue as a going concern.

We cannot be certain that the Chapter 11 proceedings will not adversely affect our operations going forward.

We cannot assure you that our operations going forward will not be adversely affected by our Chapter 11 filing. Our Chapter 11 filing may impair our ability to successfully negotiate favorable terms from suppliers, hedging counterparties and others and to attract and retain customers, employees and managers. The failure to obtain such favorable terms and retain customers and employees could adversely affect our business, financial condition and results of operations. For example, the public disclosure of our liquidity constraints and the

 

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Chapter 11 cases has impaired our ability to maintain normal credit terms with certain of our suppliers. As a result, we have been required to pay cash in advance to certain vendors and have experienced restrictions on the availability of trade credit, which has further reduced our liquidity. If liquidity problems persist following our emergence from Chapter 11, our suppliers could refuse to provide key products and services.

Risks Related to Ownership of Our New Common Stock

The market price of our new common stock is subject to volatility.

The market price of our new common stock could be subject to wide fluctuations in response to numerous factors, many of which are beyond our control. These factors include, among other things, actual or anticipated variations in our operational results and cash flow, our and our competitors’ earnings, changes in financial estimates by securities analysts, trading volume, market conditions in the industry, the general state of the securities markets and the market for stocks of companies in our industry, governmental legislation or regulation and currency and exchange rate fluctuations, as well as general economic and market conditions, such as recessions.

A liquid trading market for our new common stock may not develop.

We have applied to list our new common stock on the New York Stock Exchange or other exchange. However, we may not be able to satisfy the requirements for listing our new common stock on the exchange. Even if we are able to list our new common stock on the New York Stock Exchange or other exchange, a liquid trading market for our new common stock may not develop or be sustained. The liquidity of the trading market for our new common stock will depend, among other things, upon the number of holders of our new common stock, our financial performance and the number of research analysts covering Chemtura, none of which can be determined or predicted with certainty.

Substantial sales of or trading in our new common stock could occur in connection with emergence from Chapter 11, which could cause our stock price to be adversely affected.

Shares distributed in connection with the Plan generally may be sold in the public markets immediately following our emergence from Chapter 11 or thereafter from time to time. Some of our creditors or other investors who receive shares of our new common stock in connection with the Plan may sell our shares shortly after emergence from Chapter 11 for any number of reasons. The sale of significant amounts of our new common stock or substantial trading in our new common stock or the perception in the market that substantial trading in our new common stock will occur may adversely affect the market price of our new common stock.

Certain holders of claims may acquire a substantial amount of our new common stock upon consummation of the Plan.

During our Chapter 11 cases, there has been no limitation on the trading of claims. Accordingly, upon consummation of the Plan, certain holders of claims are likely to receive distributions of our new common stock representing a substantial amount of the outstanding shares of our new common stock. If holders of a significant number of shares of our new common stock were to act as a group, they could be in a position to control the outcome of actions requiring stockholder approval, including, among other things, election of directors. This concentration of ownership could also facilitate or hinder a negotiated change of control of Chemtura and, consequently, impact the value of our new common stock. Furthermore, the possibility that one or more holders of a significant number of shares of our new common stock may sell all or a large portion of its shares of new common stock in a short period of time may adversely affect the trading prices of our new common stock.

Issuances under our Plan and future sales of our common stock will cause you to incur substantial dilution and may depress our stock price.

In connection with the consummation of the Plan, we anticipate the issuance of 100 million shares of new common stock, including approximately 7,385,524 shares reserved for issuance in this rights offering. If the

 

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holders of Class 13a interests vote against the Plan or this rights offering is undersubscribed, all or a portion of shares reserved for issuance in this rights offering, as applicable, will be reallocated to creditors. In addition, in the future we may grant equity securities to our employees, consultants and directors under certain stock option and incentive plans, and we expect to reserve 11,000,000 shares for issuance under the management incentive plan to be in effect after our emergence from Chapter 11. Furthermore, we may issue equity securities in connection with future investments or acquisitions. Such grants or issuances could constitute a substantial portion of our then-outstanding common stock. This will cause you to suffer potentially substantial dilution in your ownership of our common stock and may adversely affect the price of our common stock.

Provisions in Delaware law and our amended and restated certificate of incorporation and bylaws may discourage, delay or prevent a change in control of our company or changes in our management and therefore depress the trading price of our new common stock.

Our amended and restated certificate of incorporation and bylaws, which will be effective upon our emergence from Chapter 11, will contain provisions that could depress the trading price of our new common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that our stockholders may deem advantageous. We are and following the effective date will continue to be subject to Section 203 of the Delaware General Corporation Law, which we refer to as the “DGCL,” which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder and which may discourage, delay or prevent a change in control of our company. See “Description of Capital Stock—Rights and Preferences of Chemtura Capital Stock—Anti-Takeover Effects of Provisions of the DGCL and Provisions to be Included in Our Amended and Restated Certificate of Incorporation and Bylaws.”

We do not expect to pay dividends on our new common stock for the foreseeable future.

The payment of any future dividends to our stockholders will depend on decisions that will be made by our board of directors and will depend on then existing conditions, including, among other things, our operating results, financial condition, contractual restrictions, corporate law restrictions, capital agreements, the applicable laws of the State of Delaware and business prospects. Additionally, upon our emergence from Chapter 11, we will have indebtedness outstanding under the Exit Financing Facilities. The Exit Financing Facilities will impose certain restrictions on the payment of dividends. For more information, see “Prospectus Summary—Recent Developments.”

We will have significant indebtedness upon our emergence from Chapter 11.

After our emergence from Chapter 11 we will have a significant amount of indebtedness. Subject to the limits contained in indebtedness upon emergence from Chapter 11, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences to our stockholders, including the following:

 

   

making it more difficult for us to satisfy our obligations with respect to our debt;

 

   

limiting our ability to obtain additional financing to fund future working capital, capital expenditures, product developments, acquisitions or other general corporate requirements;

 

   

requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;

 

   

increasing our vulnerability to general adverse economic and industry conditions;

 

   

limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

 

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placing us at a disadvantage compared to other, less leveraged competitors; and

 

   

increasing our cost of borrowing.

In addition, indebtedness upon emergence from Chapter 11 will contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all our debts.

Our operations will be restricted by the terms of our indebtedness upon emergence from Chapter 11.

Our indebtedness upon emergence from Chapter 11 will contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests, including, among other things, restrictions on our ability to:

 

   

incur, assume or guarantee additional indebtedness;

 

   

issue redeemable stock and preferred stock;

 

   

pay dividends or distributions or redeem or repurchase capital stock;

 

   

prepay, redeem or repurchase certain debt;

 

   

make loans and investments;

 

   

incur liens;

 

   

restrict dividends, loans or asset transfers from our subsidiaries;

 

   

sell or otherwise dispose of assets, including capital stock of subsidiaries;

 

   

consolidate or merge with or into, or sell substantially all of our assets to, another person;

 

   

enter into transactions with affiliates; and

 

   

enter into new lines of business.

In addition, the restrictive covenants in indebtedness upon emergence from Chapter 11 will require us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet them. As a result of these restrictions, we may be:

 

   

limited in how we conduct our business;

 

   

unable to raise additional debt or equity financing to operate during general economic or business downturns; or

 

   

unable to compete effectively or to take advantage of new business opportunities.

These restrictions may affect our ability to grow in accordance with our plans.

A breach of the covenants under the indebtedness upon emergence from Chapter 11 could result in an event of default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. Furthermore, if we were unable to repay the amounts due and payable under any secured indebtedness upon emergence from Chapter 11, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders accelerate the repayment of our borrowings, we cannot assure you that we and our subsidiaries would have sufficient assets to repay such indebtedness.

 

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Risks Related to the Rights Offering

The exercise price was set by agreement among the company and representatives of certain of its stakeholder constituencies and is not necessarily an indication of our value or the market value of our new common stock that may be established in trading on a stock exchange.

The exercise price is the initial per share price for the new common stock being distributed to both creditors and equity interest holders under our Plan. The exercise price is $13.54 per share. This price was set by agreement among us and the representatives of certain of our stakeholder constituencies. This exercise price was not intended to bear any relationship to the historical or projected price of our common stock or our past operations, cash flows, net income, current financial condition, the book value of our assets or any other established criteria for value. As a result, the exercise price should not be considered an indication of the actual value of Chemtura or of the market value of our new common stock.

The price of our new common stock may decline.

We cannot assure you that the public trading market price of our new common stock will not decline below the exercise price after you elect to exercise your rights or that following the exercise of rights you will be able to sell your shares at a price equal to or greater than the exercise price.

The rights offering may be terminated under certain circumstances prior to the expiration of the offer period, and neither we nor the subscription agent will have any obligation to you except to return your exercise payments.

We may, if we abandon our Plan, decide not to continue with the rights offering or terminate the rights offering prior to the expiration of the offer period. Additionally, the rights offering is contingent upon the holders of Class 13a interests voting to approve the Plan. We intend to announce the results of the Plan vote, including whether the holders of Class 13a interests have voted to accept the Plan, on or about September 13, 2010. If the rights offering is terminated or not approved, all exercise payments, without interest, will be returned as soon as practicable.

You must act promptly and follow instructions carefully if you want to exercise your rights.

Eligible participants and, if applicable, Subscription Nominees acting on their behalf, who desire to purchase new common stock in the rights offering must act promptly to ensure that all required rights exercise forms are actually received prior to the expiration deadline and that all payments are actually received prior to the expiration deadline. The time period to exercise rights is limited. If you or your Subscription Nominee fails to complete and sign the required rights exercise forms, sends an incorrect payment amount or otherwise fails to follow the procedures that apply to the exercise of your rights, we may, depending on the circumstances, reject your exercise of rights or accept it only to the extent of the payment received. Neither we nor the subscription agent undertakes to contact you concerning, or attempt to correct, an incomplete or incorrect rights exercise form or payment or contact you concerning whether a Subscription Nominee holds rights on your behalf. We have the sole discretion to determine whether an exercise properly follows the procedures that apply to the exercise of your rights.

If you elect to exercise your rights, your proposed acquisition of new common stock may be subject to notification obligations under the Hart-Scott-Rodino Act of 1976.

If as a result of exercising your rights you would hold shares of our new common stock worth in excess of $63.4 million, your proposed acquisition may trigger notification obligations under the Hart-Scott-Rodino Act of 1976, or the HSR Act, and all waiting periods under the HSR Act will need to have expired or otherwise been terminated before we can satisfy your exercise of rights. There can be no guarantee that the Federal Trade Commission and U.S. Department of Justice will allow the waiting periods to expire or terminate. You should consider seeking advice of legal counsel to determine the applicability of the HSR Act to your rights.

 

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Your exercise of rights may not be withdrawn.

Your exercise may not be withdrawn in whole or in part for any reason even if we have not already issued the shares to you. Therefore, even if circumstances arise after you have exercised your rights pursuant to the rights offering that change your mind about investing in our new common stock, you will nonetheless be legally bound to proceed.

 

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USE OF PROCEEDS

If all rights are exercised in the rights offering, our proceeds from the rights offering will be approximately $100 million. The proceeds will be used to partially fund distributions pursuant to the Plan. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors in accordance with the Plan.

DIVIDEND POLICY

Chemtura has not paid any dividends on its common stock since 2008. The Exit Financing Facilities that will remain outstanding following our emergence from Chapter 11 will impose certain restrictions on the payment of dividends. In addition to requiring a waiver or elimination of any such restrictions, the payment of any future dividends to our stockholders will depend on decisions that will be made by our board of directors and will depend on then existing conditions, including, among other things, our operating results, financial condition, contractual restrictions, corporate law restrictions, capital agreements, the applicable laws of the State of Delaware and business prospects.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Our unaudited pro forma condensed consolidated balance sheet is presented as of June 30, 2010. Our unaudited pro forma statements of operations are presented for the six months ended June 30, 2010 and for the year ended December 31, 2009. We prepared the Unaudited Pro Forma Condensed Consolidated Financial Information by applying adjustments to our historical consolidated financial statements incorporated by reference into this prospectus. The Unaudited Pro Forma Condensed Consolidated Financial Information gives effect to the adjustments described below as if the emergence date had occurred on January 1, 2009, for the unaudited pro forma condensed consolidated statements of operations and on June 30, 2010 for the unaudited pro forma condensed consolidated balance sheet. The Unaudited Pro Forma Condensed Consolidated Financial Information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2009, as amended, and Quarterly Report on Form 10-Q for the period ended June 30, 2010, and the consolidated financial statements and related notes incorporated by reference into this prospectus.

The Unaudited Pro Forma Condensed Consolidated Financial Information is presented for illustrative purposes only. The Unaudited Pro Forma Condensed Consolidated Financial Information is not necessarily indicative of what our financial position or results of operations would have been if the emergence date had actually occurred on June 30, 2010 for the unaudited pro forma condensed consolidated balance sheet or on January 1, 2009, for the unaudited pro forma condensed consolidated statements of operations, and is not necessarily indicative of our future financial position or results of operations. As a result of our anticipated emergence from Chapter 11 and our potential adoption of fresh-start accounting, our historical consolidated financial information incorporated by reference into this prospectus will not be comparable to financial information for periods following our emergence from Chapter 11. In addition, the amount of new stockholders’ equity in the unaudited pro forma condensed consolidated balance sheet is not an estimate of the market value of our new common stock as of the emergence date or at any other time. We make no representations as to the market value, if any, of our new common stock.

The following Unaudited Pro Forma Condensed Consolidated Financial Information adjusts historical information for the effects of the following:

 

   

the Plan, which includes the effectiveness of the Plan and the implementation of the transactions contemplated by the Plan (as further described below, the “Recapitalization Adjustments”); and

 

   

the estimated adjustments required under fresh-start accounting pursuant to Accounting Standards Codification (“ASC”) 852-10-45, Reorganization—Other Presentation Matters (referred to as “Fresh-Start Adjustments” below). It has not yet been determined if fresh-start accounting will be applicable.

Recapitalization Adjustments

The Unaudited Pro Forma Condensed Consolidated Financial Information gives effect to the Plan and the implementation of the transactions contemplated by the Plan. These transactions and related underlying assumptions include, but are not limited to, the following:

 

   

the issuance of notes and borrowings under the Exit Financing Facilities (composed of a senior secured revolving credit facility (the “Senior Asset Based Facility”), the Term Loan, and the Senior Notes), which will result in initial indebtedness of $750 million ($744 million after discount), bearing interest at a weighted average rate of 7.1% per annum;

 

   

the repayment of $300 million of liabilities under the senior secured super-priority debtor-in-possession credit facility, approved on an interim basis by order of the Bankruptcy Court on February 9, 2010, and by final order on February 18, 2010, with cash;

 

   

the settlement of liabilities subject to compromise through equity conversion, cash repayment or reinstatement (pass-through); and

 

   

the payment of professional fees related to the bankruptcy proceedings, the emergence process, or the Exit Financing Facilities.

 

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Fresh-Start Adjustments

The Unaudited Pro Forma Condensed Consolidated Financial Information also gives effect to fresh-start adjustments relating to our preliminary estimate of the impact of the application of fresh-start accounting. Under fresh-start accounting, reorganization value represents the fair value of the entity before considering indebtedness and approximates the amount a willing buyer would pay for the assets of the entity immediately after the reorganization. It has not yet been determined if fresh-start accounting will be applicable upon emergence. We will be required to adopt fresh-start accounting if the reorganization value of our assets immediately prior to emergence is less than our total liabilities. However, the pro forma information has been presented with adjustments to reconcile the carrying value of assets to an assumed enterprise value. The pro forma adjustments are based on the enterprise value for Chemtura, on a consolidated basis, upon which our Plan was prepared. The assumed enterprise value is $2,050 million. The fresh-start pro forma adjustments assume a hypothetical purchase price allocation based on the reorganization value as the purchase price.

The reorganization value of our assets and the fair values of assets and liabilities on the unaudited pro forma condensed consolidated balance sheet are preliminary estimated values as of June 30, 2010 and have been made solely for purposes of developing the Unaudited Pro Forma Condensed Consolidated Financial Information and are subject to further revisions and adjustments. If we are required to adopt fresh-start accounting, final valuations will be completed as of the emergence date and, to the extent such updates reflect valuations different than those used in the Unaudited Pro Forma Condensed Consolidated Financial Information, there may be adjustments in the values of certain assets and liabilities, and related deferred taxes from those shown in the unaudited pro forma condensed consolidated balance sheet. To the extent actual valuations may differ from those used in preparing the Unaudited Pro Forma Condensed Consolidated Financial Information, these differences will be reflected on our balance sheet upon emergence under fresh-start accounting. Any fair value adjustments to property, plant and equipment together with intangible assets may result in a change to depreciation and amortization expense compared to historical trends or amounts shown in the Unaudited Pro Forma Condensed Consolidated Financial Information. In addition, any fair value adjustments to inventory will increase our cost of goods sold, reducing profitability until that inventory is sold. As such, the following Unaudited Pro Forma Condensed Consolidated Financial Information may not represent our actual post-emergence financial condition and results of operations, and any differences could be material.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2010

 

(dollars in millions)    Historical     Recapitalization
Adjustments
    Subtotal    Fresh-Start
Adjustments
    Pro Forma

Assets

           

Current assets:

           

Cash and cash equivalents

   $ 184      $ (171 )(a)    $ 13    $ —        $ 13

Accounts receivable

     560        —          560      —          560

Inventories

     496        —          496      80 (k)      576

Other current assets

     258        (29 )(b)      229      —          229
                                     

Total current assets

     1,498        (200     1,298      80        1,378

Non-current assets:

           

Property, plant and equipment

     681        —          681      189 (l)      870

Goodwill

     227        —          227      (102 )(m)      125

Intangible assets, net

     435        —          435      392 (n)      827

Other assets

     176        26 (c)      202      19 (o)      221
                                     

Total assets

   $ 3,017      $ (174   $ 2,843    $ 578      $ 3,421
                                     

Liabilities and stockholders (deficit) equity

           

Current liabilities:

           

Short-term borrowings

   $ 302      $ (300 )(d)    $ 2    $ —        $ 2

Accounts payable

     157        —          157      —          157

Accrued expenses

     187        103 (e)      290      28 (p)      318

Income taxes payable

     15        —          15      —          15
                                     

Total current liabilities

     661        (197     464      28        492

Non-current liabilities:

           

Long-term debt

     2        744 (f)      746      —          746

Pension and post-retirement health care liabilities

     134        306 (g)      440      —          440

Other liabilities

     180        —          180      210 (p)      390
                                     

Total liabilities not subject to compromise

     977        853        1,830      238        2,068

Liabilities subject to compromise

     2,151        (2,151 )(h)      —        —          —  
                                     

Total liabilities

     3,128        (1,298     1,830      238        2,068

Total stockholders’ (deficit) equity

     (111     1,124 (i)      1,013      340 (j)      1,353
                                     

Total liabilities and stockholders’ (deficit) equity

   $ 3,017      $ (174   $ 2,843    $ 578      $ 3,421
                                     

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

 

(dollars in millions)    Historical     Recapitalization
Adjustments
    Subtotal     Fresh-Start
Adjustments
    Pro Forma  

Net sales

   $ 1,370      $ —        $ 1,370      $ —        $ 1,370   

Cost of goods sold

     1,037        —          1,037        —   (k)      1,037   

Selling, general and administrative

     147        —          147        —          147   

Depreciation and amortization

     94        —          94        (8 )(q)      86   

Research and development

     20        —          20        —          20   

Facility closures, severance and related costs

     3        —          3        —          3   

Changes in estimates related to expected allowable claims

     73        —          73        —          73   

Equity Income

     (2     —          (2     —          (2
                                        

Operating (loss) profit

     (2     —          (2     8        6   

Interest expense

     (129     99 (r)      (30     —          (30

Loss on early extinguishment of debt

     (13     13 (s)      —          —          —     

Other expense, net

     (10     —          (10     —          (10

Reorganization items, net

     (47     47 (t)      —          —          —     
                                        

Loss from continuing operations before income taxes

     (201     159        (42     8        (34

Income tax provision

     (16     —   (u)      (16     (3 )(u)      (19
                                        

Loss from continuing operations

   $ (217   $ 159      $ (58   $ 5      $ (53
                                        

Basic and diluted per share information:

          

Loss from continuing operations, net of tax

   $ (0.90         $ (0.53

Weighted average shares outstanding

     242.9              100.0  (v) 

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

 

(dollars in millions)    Historical     Recapitalization
Adjustments
    Subtotal     Fresh-Start
Adjustments
    Pro Forma  

Net sales

   $ 2,300      $ —        $ 2,300      $ —        $ 2,300   

Cost of goods sold

     1,721        —          1,721        —   (k)      1,721   

Selling, general and administrative

     289        —          289        —          289   

Depreciation and amortization

     162        —          162        (28 )(q)      134   

Research and development

     35        —          35        —          35   

Facility closures, severance and related costs

     3        —          3        —          3   

Antitrust costs

     10        —          10        —          10   

Impairment of long-lived assets

     39        —          39        —          39   

Changes in estimates related to expected allowable claims

     73        —          73        —          73   
                                        

Operating (loss) profit

     (32     —          (32     28        (4

Interest expense

     (70     10 (r)      (60     —          (60

Other expense, net

     (17     —          (17     —          (17

Reorganization items, net

     (97     97 (t)      —          —          —     
                                        

Loss from continuing operations before income taxes

     (216     107        (109     28        (81

Income tax provision

     (10     —   (u)      (10     (10 )(u)      (20
                                        

Loss from continuing operations

   $ (226   $ 107      $ (119   $ 18      $ (101
                                        

Basic and diluted per share information:

          

Loss from continuing operations, net of tax

   $ (0.93         $ (1.01

Weighted average shares outstanding

     242.9              100.0  (v) 

See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION (dollars in millions)

 

(a) The impact on cash and cash equivalents to give effect to the transactions pursuant to the Plan is as follows:

 

Sources of Funds

  

Term Loan, net of discount

   $ 292   

Senior Notes, net of discount

     452   
        

Total sources

   $ 744   

Uses of Funds

  

Amended and Restated Debtor in Possession Financing (“A&R DIP Facility”)

   $ 300   

Administrative and priority claims

     10   

Professional fees

     64   

Exit financing fees and expenses

     26   

Payments to creditors and others

     443   

Pension plan contributions

     72   
        

Total uses

   $ 915   
        

Net change in funds

   $ (171
        

Proceeds from the rights offering have not been assumed as they are not firmly committed at this time.

 

(b) To write-off (i) the remaining deferred financing costs relating to the A&R DIP Facility ($5 million) and (ii) over-collateralized letters of credit used as consideration towards claim settlements ($24 million).

 

(c) To record the impacts of financing costs relating to emergence financing.

 

Term Loan

   $ 5

Senior Notes

     9

Senior Asset Based Facility

     6

Other financing costs

     6
      

Total

   $ 26
      

 

 

(d) To reflect the payment of the A&R DIP Facility.

 

(e) To reflect the reclassification of $103 million of obligations from liabilities of the Company subject to compromise (“LSTC”) to current liabilities. These obligations will remain as liabilities of the Company after emergence from Chapter 11. The liabilities primarily consist of workers compensation claims, deferred compensation and unrecognized tax benefits.

 

(f) To reflect the issuance of new long-term debt under the Term Loan ($292 million, net of 1.0% discount) and the Senior Notes ($452 million, net of 0.73% discount).

 

(g) To reflect the reclassification of $378 million of obligations from LSTC to pension and post-retirement healthcare liabilities. These obligations will remain as liabilities of the Company after emergence from Chapter 11. This reclassification is offset by contributions to defined benefit plans as contemplated under the Plan.

 

(h) To record the disposition of liabilities subject to compromise pursuant to the Plan.

 

LSTC

   $ 2,151   

Payments to creditors and others

     (443

Administrative and priority claims

     (10

Issuance of common shares for satisfaction of certain LSTC

     (1,279

Reinstated defined benefit plan liabilities to be passed through (see Note (g))

     (378

Other reinstated liabilities to be passed through (see Note (e))

     (103

Adjustments for expected allowed claims, net

     62   
        

Net settlement impact

   $ —     
        

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION (dollars in millions)—(Continued)

 

     Adjustments for expected allowed claims consist primarily of $70 million from make-whole and no-call provisions in prepetition debt agreements that will be allowed claims pursuant to the Plan. This is offset by other assumption differences between LSTC at June 30, 2010 and LSTC in the Plan.

 

(i) To reflect the equity impacts of the reorganization adjustments and fresh-start valuation:

 

Assumed Enterprise Value

   $ 2,050   

Less: Exit Financing Facilities and pass through debt

     (748

Plus: Cash impact of transactions contemplated in Plan

     13   

Less: Non-controlling interest

     (11
        

Equity Value

   $ 1,304   
        

Less: Professional fees

     (64

Plus: Adjustments for expected allowed claims(1)

     (85

Less: Write-off of A&R DIP Facility financing costs

     (5

Less: Equity value for equityholders

     (26
        

Total Plan effect adjustment

   $ 1,124   
        

 

  (1) Adjustments for expected allowed claims assumes an insurance recovery setoff of $24 million.

In both 2009 and 2010, Chemtura adopted emergence incentive plans (“EIP”) that provide the opportunity for participants to earn an award that will be granted upon Chemtura’s emergence from Chapter 11 or at a later date in the form of time-based restricted stock units (“RSUs”), stock options and/or in cash, if feasible. The form of consideration will be determined by Chemtura’s Board of Directors upon emergence from Chapter 11.

The Organization, Compensation and Governance Committee of the Board of Directors (the “Committee”) adopted the 2009 Emergence Incentive Plan (the “2009 EIP”), subject to the approval of the Bankruptcy Court, which approval was received on July 28, 2009. The number of employees included in the EIP and the size of the award pool were based upon specific consolidated EBITDA levels achieved during the twelve-month period immediately preceding Chemtura’s emergence from Chapter 11. The maximum award pool could amount to $17 million. On June 1, 2010, Chemtura amended the consolidated EBITDA measurement period under the 2009 EIP from twelve months trailing consolidated EBITDA from emergence from Chapter 11 to twelve months trailing consolidated EBITDA ending March 31, 2010 (the “2009 EIP Amendment”). The 2009 EIP Amendment was established by order of the Bankruptcy Court, dated May 18, 2010. The award pool for the 2009 EIP is approximately $14 million. The 2009 EIP is currently unfunded and will be funded following the emergence from Chapter 11.

On June 1, 2010, Chemtura adopted the 2010 Emergence Incentive Plan (“2010 EIP”). The 2010 EIP was also established by order of the Bankruptcy Court, dated May 18, 2010. The 2010 EIP provides the opportunity for participants to earn an award that will be granted upon Chemtura’s emergence from Chapter 11 in the form of time-based RSUs and/or stock options, if feasible, and/or in cash. The form of consideration will be determined by Chemtura’s Board of Directors upon emergence from Chapter 11. The number of employees included in the 2010 EIP and the size of the award pool are based upon the achievement of certain levels of consolidated earnings before interest, taxes, depreciation expense and amortization expense, and adjusted for certain items described in the 2010 EIP (“2010 consolidated EBITDA”) during the later of the twelve month period immediately preceding Chemtura’s emergence from Chapter 11 or December 31, 2010. The maximum award pool could amount to $19 million. The 2010 EIP is currently unfunded and will be funded following the later of the emergence from Chapter 11 or December 31, 2010 to the specified level associated with the 2010 consolidated EBITDA performance achieved.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION (dollars in millions)—(Continued)

 

The pro forma adjustments do not include any effects from potential award grants under the EIP, as Chemtura cannot estimate the amount, timing and vesting conditions of the related awards at this time.

 

(j) To adjust stockholders’ equity to value previously ascribed in the Disclosure Statement.

 

(k) To adjust inventory to its fair value assuming fresh-start accounting is applicable. Because of this adjustment, we expect cost of sales to increase by this amount over the period after emergence in which the inventory is sold (approximately three months). This cost has been excluded from the pro forma unaudited condensed consolidated statement of operations as this cost will not recur on an ongoing basis.

 

(l) To adjust property, plant and equipment to its fair value assuming fresh-start accounting is applicable.

 

(m) To eliminate existing goodwill and record new goodwill for the amount of reorganization value in excess of the fair value allocated to other identifiable assets and liabilities, assuming fresh-start accounting is applicable.

 

(n) To record identifiable intangible assets (other than goodwill) at their fair value assuming fresh-start accounting is applicable.

 

(o) To adjust investments in non-consolidated joint ventures to their fair value assuming fresh-start accounting is applicable.

 

(p) To record deferred tax liabilities related to fresh-start adjustments calculated at a 35% tax rate. Final fair value adjustments will be based upon fair value allocations made at a detailed legal entity level, which may result in a different effective tax rate if fresh-start accounting is applicable.

 

(q) Represents the adjustment to depreciation and amortization expense based upon the fair values of property, plant and equipment and intangible assets assuming fresh-start accounting is applicable.

 

     The pro forma depreciation and amortization expense on an annual basis is calculated as follows:

 

     Property,
Plant

and
Equipment
    Intangible
Assets
    Total

Estimated fair value

   $ 870      $ 827     

Less: Non-depreciable/amortizable assets at fair value

     (147     (66  
                  

Estimated fair value of depreciable/amortizable assets

   $ 723      $ 761     

Estimated weighted average remaining useful life

     7.7 years        21.5 years     

Pro forma annual depreciation and amortization expense

   $ 94      $ 35      $ 129

The adjustment to the historical depreciation and amortization expense is calculated as follows:

 

     Six Months Ended     Year Ended  
     June 30, 2010     December 31, 2009  

Pro forma depreciation and amortization

   $ 65      $ 129   

Less: Depreciation and amortization expense historically reported

     (94     (162

Add: Historical accelerated depreciation to remain in pro forma depreciation and amortization expense

     21        5   
                

Pro forma reduction to depreciation and amortization expense

   $ (8   $ (28
                

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION (dollars in millions)—(Continued)

 

(r) To reflect interest expense and amortization of debt issuance costs on new debt and the elimination of interest expense on old debt. Assumes certain interest expense (3.25% on $100 million) related to old debt remains based on the estimated level of working capital requirements during the periods presented.

 

     Six Months Ended     Year Ended  
     June 30, 2010     December 31, 2009  

New Debt:

    

Term Loan

   $ (8   $ (16

Senior Notes

     (18     (36

Original issuance discount accretion

     —          (1

Amortization of deferred financing costs

     (2     (4
                
     (28     (57

Old Debt:

    

Interest expense

     (129     (70

Estimated working capital financing requirements

     2        3   
                

Total interest adjustment

   $ 99      $ 10   
                

 

     With respect to the Term Loan, a 25 basis point change in interest rates would result in an approximate $1 million change in interest expense on an annual basis.

 

(s) Represents the elimination of the loss on early extinguishment of debt related to the A&R DIP Facility refinancing.

 

(t) Represents the elimination of expenses and gains directly related to the Chapter 11 proceedings (professional fees, contract rejection penalties, settlement gains).

 

(u) No tax effects were assumed for recapitalization adjustments as these adjustments impact U.S. legal entities which are expected to remain in a full valuation allowance position upon emergence. Fresh-start adjustments impact both U.S. and non-U.S. subsidiaries and a tax rate of 35% was assumed for these adjustments based upon our best estimates of forecasted tax rates in our foreign jurisdictions. Final fair value adjustments will be based upon detailed legal entity fair value allocations, which may result in a different effective tax rate if fresh-start accounting is applicable.

 

(v) Based upon the assumptions set forth in the Plan, 100 million shares of new common stock is expected to be issued and outstanding upon emergence. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors. Accordingly, the Company has assumed that the entire 100 million shares of new common stock will be outstanding.

 

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DESCRIPTION OF CAPITAL STOCK

The following is a description of the material terms of the capital stock of Chemtura that we expect to be in place immediately after the effective date of the Plan. The final terms of the capital stock of Chemtura will be set forth in our amended and restated certificate of incorporation and bylaws that will be in effect at the time we emerge from Chapter 11, which are subject to review and approval of the Bankruptcy Court. The following description relates to the forms of our amended and restated certificate of incorporation and bylaws filed as exhibits to the registration statement of which this prospectus is a part, which are subject to change based on such review. This description also summarizes certain provisions of the DGCL.

Authorized Capital Stock

Chemtura will have authority to issue a total of 500,250,000 shares of capital stock, which we refer to as Chemtura capital stock, consisting of:

 

   

500,000,000 shares of new common stock, par value $0.01 per share; and

 

   

250,000 shares of preferred stock, par value $0.01 per share.

Outstanding Capital Stock

The following capital stock is expected to be issued and outstanding:

 

   

100,000,000 shares of new common stock; and

 

   

no shares of preferred stock.

Rights and Preferences of Chemtura Capital Stock

New Common Stock

Voting Rights

All shares of our new common stock have identical rights and privileges. The holders of shares of our new common stock are entitled to vote on all matters submitted to a vote of our stockholders on which the holders of common stock are entitle to vote. Subject to any rights that may be applicable to any then outstanding preferred stock, our common stock votes as a single class on all matters relating to the election of directors on our board of directors and as provided by law. Holders of our common stock will not have cumulative voting rights. Except in matters relating to the election or removal of directors on our board of directors and as otherwise provided in our amended and restated certificate of incorporation or required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. In the case of election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the votes entitled to be cast by all shares of new common stock.

Dividend Rights

Subject to limitations under Delaware law, preferences that may apply to any outstanding shares of preferred stock and contractual restrictions, holders of our new common stock are entitled to receive ratably dividends or other distributions when and if declared by Chemtura’s board of directors. Chemtura’s Exit Financing Facilities, which will be in place at or before our emergence from Chapter 11, will impose certain restrictions on the payment of dividends. In addition to requiring a waiver or elimination of any such restrictions, the payment of any future dividends to our stockholders will depend on decisions that will be made by our board of directors and will depend on then existing conditions, including our operating results, financial condition, contractual restrictions, corporate law restrictions, capital agreements, the applicable laws of the State of Delaware and business prospects. The ability of our board of directors to declare dividends also will be subject to

 

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the rights of any holders of outstanding shares of our preferred stock and the availability of sufficient funds under the DGCL to pay dividends. For a more complete description of the dividend rights of holders of shares of our preferred stock, see “—Blank Check Preferred Stock” below. For a more complete description of our dividend policy, see “Dividend Policy.”

Liquidation Preference

In the event of a liquidation, dissolution or winding up of Chemtura (outside of the Plan), after the payment in full of all amounts owed to our creditors and holders of any outstanding shares of our preferred stock, the remaining assets of Chemtura will be distributed ratably to the holders of shares of our new common stock. The rights, preferences and privileges of holders of shares of our new common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which Chemtura may designate and issue in the future without stockholder approval.

Other Rights

Holders of our new common stock do not have pre-emptive, subscription, redemption or conversion rights.

5% Ownership Limitation

Our amended and restated certificate of incorporation will include certain restrictions of trading by certain five percent stockholders of our new common stock that are intended to avoid an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).

Blank Check Preferred Stock

Under the terms of the amended and restated certificate of incorporation, the Chemtura board of directors will be authorized to issue from time to time, without stockholder approval, up to an aggregate of 250,000 shares of preferred stock in one or more series and to fix or alter the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of each series, including the dividend rights, dividend rates, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price or prices, liquidation preferences and the number of shares constituting any series. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions. If Chemtura’s board of directors decides to issue shares to persons supportive of current management, this could render more difficult or discourage an attempt to obtain control of the company by means of a merger, tender offer, proxy contest or otherwise. Authorized but unissued shares also could be used to dilute the stock ownership of persons seeking to obtain control of Chemtura.

Anti-Takeover Effects of Provisions of the DGCL and Provisions to be Included in Our Amended and Restated Certificate of Incorporation and Bylaws

The DGCL contains, and our amended and restated certificate of incorporation and bylaws will contain, a number of provisions which may have the effect of discouraging transactions that involve an actual or threatened change of control of Chemtura. In addition, provisions of our amended and restated certificate of incorporation and bylaws may be deemed to have anti-takeover effects and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in his, her or its best interest, including those attempts that might result in a premium over the market price of the shares held by our stockholders.

Section 203

We are currently and will continue to be subject to Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested

 

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stockholder” for a period of three years from the date of the transaction in which the person became an interested stockholder, unless the interested stockholder attained this status with the approval of the board or unless the business combination was approved in a prescribed manner. A “business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years owned, 15% or more of the corporation’s voting stock. This statute could prohibit or delay the accomplishment of mergers or other takeover or change in control attempts with respect to Chemtura and, accordingly, may discourage attempts to acquire Chemtura.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions

Our certificate of incorporation and bylaws, as amended and restated, will provide for the following, which, in each case, may have the effect of discouraging transactions that involve an actual or threatened change of control of Chemtura. When available you may obtain copies of our new amended and restated certificate of incorporation and our new amended and restated bylaws at http://www.kccllc.net/chemtura. The information on this website is not deemed to be part of this prospectus. See also “Where You Can Find More Information.”

Removal of Directors; Vacancies

The amended and restated certificate of incorporation will provide that sitting directors of Chemtura may be removed only by an affirmative vote of 66 2/3% of all of the outstanding shares of capital stock entitled to vote in the election of directors, and any vacancy occurring on the board may be filled only by a majority of the directors then in office, even though less than a quorum.

No Written Consent of Stockholders

Any action to be taken by our stockholders will be required to be effected at a duly called annual or special meeting and may not be effected by written consent.

Special Meetings of Stockholders

Special meetings of our stockholders may be called only by our board of directors, the chairman of our board of directors, our chief executive officer or pursuant to a resolution adopted by the affirmative vote of at least 35% of the voting power of all outstanding shares of capital stock entitled to vote on any such matter for which the special meeting is being proposed. Business to be transacted at a special meeting will be limited by the amended and restated bylaws to the purpose or purposes stated in the notice of the meeting.

Advance Notice Requirement

Stockholders must provide timely notice as specified in our amended and restated bylaws when seeking to:

 

   

bring business before an annual meeting of stockholders;

 

   

bring business before a special meeting of stockholders (if contemplated and permitted by the notice of a special meeting); or

 

   

nominate candidates for election at an annual or special meeting of stockholders.

To be timely, a stockholder’s notice must be received at our principal executive offices.

Super-majority Provisions

The DGCL provides generally that the affirmative vote of a majority of the outstanding shares then entitled to vote at an election of directors, voting together as a single class, is required to amend a corporation’s

 

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certificate of incorporation or bylaws, unless the certificate of incorporation requires a greater percentage. The amended and restated certificate of incorporation may provide that the following provisions, among others, in the amended and restated certificate of incorporation and amended and restated bylaws may be amended only by an affirmative vote of 66 2/3% of all of the outstanding shares of capital stock entitled to vote in the election of directors:

 

   

provisions governing number of directors, removal of directors and filling vacancies on the board;

 

   

the prohibition on stockholder action by written consent;

 

   

the indemnification of directors and officers and related limitation of liability;

 

   

the trading restrictions applicable to five percent stockholders;

 

   

the ability to call a special meeting of stockholders; and

 

   

the amendment provision requiring that the above provisions be amended only with an 66 2/3% super-majority vote.

In addition, subject to the foregoing, the amended and restated certificate of incorporation will grant the board of directors the authority to amend and repeal the bylaws without a stockholder vote in any manner not inconsistent with the laws of the State of Delaware or the amended and restated certificate of incorporation.

Transfer Agent and Registrar

The transfer agent and registrar for Chemtura’s new common stock is expected to be Mellon Investor Services.

Limitations on Liability and Indemnification of Directors and Officers

The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties. Our amended and restated certificate of incorporation will limit the liability of directors to the fullest extent permitted by the DGCL. In addition, our amended and restated bylaws will provide that we must indemnify our directors and officers to the fullest extent permitted by the DGCL. Our amended and restated certificate of incorporation will include a provision that eliminates the personal liability of a director to Chemtura for monetary damages for breach of fiduciary duty as a director, except for except to the extent such exemption from liability is not permitted under the DGCL.

The limitation of liability and indemnification provisions to be included in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

 

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THE RIGHTS OFFERING

Background of the Rights Offering

On March 18, 2009, the Debtors filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The cases were consolidated for joint administration purposes only and were assigned a lead case number 09-11233 (REG). Chemtura’s non-U.S. subsidiaries and certain U.S. subsidiaries were not included in the Chapter 11 filing.

On June 17, 2010, the Debtors filed with the Bankruptcy Court a proposed Plan and related Disclosure Statement. The Plan sets forth the contemplated structure of the Debtors that are being reorganized in connection with the Chapter 11 cases at the emergence date and outlines the manner in which the prepetition creditors’ and equity holders’ various claims against and interests in the Debtors will be treated. On August 5, 2010, after filing revised versions of the Plan and Disclosure Statement, the Bankruptcy Court approved the Disclosure Statement and the procedures for the Debtors to solicit votes on the Plan. The hearing to consider confirmation of the Plan is currently scheduled to commence on September 16, 2010. The Bankruptcy Court will confirm the Plan if the requisite type and amount of creditors vote to approve the Plan, and it determines that the Plan otherwise complies with the requirements set forth in section 1129 of the Bankruptcy Code. Although the timing is uncertain and no assurances can be given, we believe that the Bankruptcy Court will confirm a plan of reorganization for the Debtors that would be substantially similar to the Plan described herein.

The proposed Plan includes the following key elements, among others:

 

   

The strengthening of the Debtors’ balance sheet through the conversion of certain prepetition debt and claims to equity, contributions to unfunded pension plans and the settlement of many tort and environmental contingencies.

 

   

The costs of emergence, including the cash required for distributions in settlement of certain prepetition claims, will be financed primarily from our exit financing facilities and our excess cash balances resulting from consummation of the Plan and related transactions, including the proceeds of the rights offering.

On August 8, 2010, Chemtura Canada Co./Cie filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court and on August 11, 2010, commenced ancillary recognition proceedings under Part IV of the CCAA in the Canadian Court. The Bankruptcy Court entered an order jointly administering Chemtura Canada’s Chapter 11 case with the current Chapter 11 cases under lead case number 09-11233 (REG) and appointed Chemtura Canada as the “foreign representative” for the purposes of the Canadian Case. On August 11, 2010, the Canadian Court entered an order recognizing the Chapter 11 cases as “foreign main proceedings” under the CCAA. These filings are designed only to address in the context of the Plan diacetyl claims asserted against Chemtura Corporation and Chemtura Canada.

To effectuate Chemtura’s restructuring and emergence from Chapter 11 as a viable company, the Plan provides for the treatment of claims of creditors and interests of equity holders. In developing the Plan, the Debtors engaged in good faith negotiations with the Creditors’ Committee, the Equity Committee and the Ad Hoc Bondholders’ Committee. In furtherance of the restructuring, Chemtura also proposes to raise new equity capital through the rights offering to be implemented under the Plan, as described herein.

The Plan organizes claims against the Debtors into classes according to their relative priority and certain other criteria. For each class, the Plan describes (a) the underlying claim or interest, (b) the recovery available to the holders of claims or interests in that class under the Plan, (c) whether the class is “impaired” under the Plan, meaning that each holder will receive less than the full value on account of its claim or interest or that the rights of holders under law will be altered in some way (such as receiving stock instead of holding a claim) and (d) the form of consideration (e.g., cash, stock or a combination thereof), if any, that such holders will receive on account of their respective claims or interests. Distributions to creditors under the Plan generally will include a

 

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combination of new common stock, cash, reinstatement or such other treatment as agreed between the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee) and the applicable creditor. Certain creditors will be eligible to elect, when voting on the Plan, to receive their recovery in the form of the maximum available amount of cash or the maximum available amount of new common stock.

The Plan provides that if eligible holders of Chemtura’s common stock in us vote as a class to accept the Plan, they will receive their pro rata share (determined with respect to all holders of interests in us) of 5% of new common stock to be issued and outstanding immediately following the effective date of the Plan, plus the right to participate in this rights offering. If, however, holders of interests in us vote as a class to reject the Plan, they will receive their pro rata share of value available for distribution, if any, after all allowed claims have been paid in full and certain disputed claims reserves have been established in accordance with the terms of the Plan. All new common stock distributed under the Plan to holders of claims and, if applicable, interests, including new common stock distributed in connection with the rights offering, shall be subject to dilution by certain of our incentive plans.

Under the rights offering, Chemtura is not required to make distributions of fractional shares of new common stock. Therefore, only eligible holders owning the requisite number of shares of common stock will be entitled to participate in the offering. The Plan is subject to approval by the Bankruptcy Court in accordance with the Bankruptcy Code as well as various other conditions and contingencies, some of which are not within our control. We cannot provide any assurance that any plan of reorganization ultimately confirmed by the Bankruptcy Court will be consistent with the terms of the Plan. Although the Plan provides for our emergence from Chapter 11 as a going concern, there can be no assurance that the Plan, or any other plan of reorganization, will be confirmed by the Bankruptcy Court or that any such plan will be implemented successfully.

The Rights Offering

Through the rights offering, eligible holders of at least 32.9383 shares of common stock will be entitled to purchase, on a pro rata basis, a portion of the 7,385,524 shares of new common stock reserved for issuance in this rights offering for an exercise price of $13.54 per share. If any of the eligible holders do not subscribe for all of their pro rata allocation of the shares of new common stock for which they are entitled to subscribe, other eligible holders may elect to subscribe for the unsubscribed shares. If the total number of shares subscribed for in this oversubscription option exceeds the number of shares being offered, the number of shares that such oversubscribing holders may purchase will be reduced on a pro rata basis.

In accordance with the settlement reached between Chemtura and certain of its major stakeholders, all of the proceeds that Chemtura receives from the rights offering, which would be up to approximately $100 million if all of the rights are exercised, will be used to partially fund distributions under the Plan. If the rights offering is undersubscribed, any shares of new common stock reserved for issuance in the rights offering that are not purchased will be reallocated to creditors in accordance with the Plan. The registration statement of which this prospectus forms a part relates to the proposed sale of new common stock offered by Chemtura pursuant to the exercise of rights in the rights offering.

Rights Offering Procedures

Each eligible holder’s pro rata share will be based upon the following equation:

 

Holder’s number of
shares of common

stock held as of the

record date

   X   

Total number of shares of new common stock

reserved for issuance in this rights offering

Total number of shares of common stock as of the record date

   =    Maximum
number of
initial rights

(Round Down
to the Nearest
Whole Number)

           

 

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If any of the eligible holders do not subscribe for all of their allocation of the shares of new common stock for which they are entitled to subscribe, other eligible holders may elect to subscribe for the unsubscribed shares. If the total number of shares subscribed for in this oversubscription option exceeds the number of shares being offered, the number of shares that such oversubscribing holder may purchase will be reduced on a pro rata basis. No eligible holder, however, will be granted or allowed to exercise any right for fractional shares of new common stock.

Any reference to a particular eligible holder’s total exercise price shall mean the exercise price multiplied by the number of shares of new common stock such eligible holder elected to purchase.

Notwithstanding anything to the contrary herein, under no circumstances shall any holder of common stock that is not entitled to vote on the Plan be eligible to participate in this rights offering. Notwithstanding anything contained in the Plan to the contrary, in the event that holders of Class 13a interests vote to reject the Plan, under no circumstances shall any holder of shares of common stock have any rights to participate in the rights offering, all rights exercise forms received by the subscription agent shall be null and void and any payments received by the subscription agent will be refunded, without interest, to the eligible holders as soon as reasonably practicable after the effective date of the Plan.

Commencement/Expiration of the Rights Offering

The rights offering will expire at 5:00 p.m. (EDT) on September 30, 2010, unless the exercise period is extended by us. We currently do not intend to extend the exercise period. Each eligible holder intending to participate in the rights offering must affirmatively elect to exercise its rights on or prior to the expiration deadline in accordance with the rights offering procedures described herein.

As promptly as practicable following the expiration deadline, Chemtura shall deliver, or cause to be delivered, to each eligible holder or, in the case of those eligible holders whose shares are held through a Subscription Nominee, DTC, that has sought to exercise rights, a written statement specifying the number of rights that were validly and effectively exercised by such eligible holder.

Exercise of Rights

For those eligible registered holders:

 

   

Each such eligible holder that intends to exercise its rights shall designate such intention on its rights exercise form and deliver the completed rights exercise form to the subscription agent prior to the expiration deadline. In addition, any eligible holder that exercises all of its rights initially allocated to it may indicate on its rights exercise form how many additional shares of new common stock such eligible holder wishes to purchase if all of the rights in the rights offering are not initially subscribed for. Along with the rights exercise form, a participating holder shall also deliver full payment (including any amount in respect to the oversubscription option) for the subscription price to the subscription agent prior to the expiration deadline. If any eligible holder fails to deliver a duly completed rights exercise form (or full payment of the subscription price) so that such form and payment is actually received by the subscription agent on or before the expiration deadline, such eligible holder shall be deemed to have relinquished and waived its rights.

For those eligible holders owning shares of common stock through a Subscription Nominee:

 

   

To exercise its rights (including pursuant to the overallotment option), such holder must provide instructions to its Subscription Nominee. The Subscription Nominee, in turn, must then convey the instruction through DTC’s ASOP on or before the expiration deadline. Full payment (including any amount in respect to the oversubscription option) for the subscription price will be made automatically through the ASOP system.

 

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If the subscription agent for any reason does not receive a duly completed rights exercise form or equivalent instructions from DTC on or prior to the expiration deadline, and immediately available funds in an amount equal to the subscription price on or prior to the expiration deadline, or payment by DTC, then each such eligible participant shall be deemed to have relinquished and waived its right to participate in the rights offering. Each eligible holder intending to participate in the rights offering must affirmatively elect to exercise its rights by the expiration deadline.

To facilitate the exercise of rights for eligible holders that hold shares of common stock through a Subscription Nominee, on the commencement date, the Debtors will deliver rights exercise forms to the record holders, including, without limitation, Subscription Nominees. Each Subscription Nominee will be entitled to receive sufficient copies of the rights exercise form for distribution to the beneficial owners of the allowed interests for whom such Subscription Nominee holds such interests. The Subscription Nominees may use the rights exercise form provided or such other form as they may customarily use for the purpose of obtaining instructions with respect to the rights offering.

Disputes, Waivers and Extensions

Any and all disputes concerning the timeliness, viability, form and eligibility of any exercise of rights shall be addressed in good faith by the Debtors (in consultation with the Creditors’ Committee and the Ad Hoc Bondholders’ Committee), subject to a final and binding determination by the Bankruptcy Court. The Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld), subject to Bankruptcy Court approval, may seek to waive any defect or irregularity, or permit a defect or irregularity to be corrected within such times as they may determine in good faith to be appropriate, or reject the purported exercise of any rights. The Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) reserve the right, but are under no obligation, to give notice to any eligible holder or nominee regarding any defect or irregularity in connection with any purported exercise of rights by such eligible holder and the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) may, but are under no obligation, permit such defect or irregularity to be cured within such time as they may determine in good faith, subject to Bankruptcy Court approval, to be appropriate; provided, however, that none of the Debtors, the Creditors’ Committee, the Ad Hoc Bondholders’ Committee or the subscription agent shall incur any liability for failure to give such notification.

The Debtors, with the approval of the Bankruptcy Court, and the Creditors’ Committee and/or the Equity Committee, may extend the duration of the rights offering or adopt additional detailed procedures to more efficiently administer the distribution and exercise of the rights.

Funds

The proceeds of the rights offering will be used to provide up to $100 million in cash (or such lesser amount of proceeds actually achieved, in the event of an under-subscription) funding to the reorganized Debtors to partially fund distributions pursuant to the Plan.

The payments made in accordance with the rights offering shall be deposited and held by Epiq Bankruptcy Solutions, as the subscription agent, in escrow pending the effective date of the Plan in an account or accounts (a) which shall be separate and apart from the subscription agent’s general operating funds and any other funds subject to any lien or any cash collateral arrangements and (b) which segregated account or accounts will be maintained for the purpose of holding the money for administration of the rights offering until the effective date of the Plan. The subscription agent shall not use the funds for any other purpose other than to release the funds as directed by the Debtors on the effective date of the Plan and shall not encumber or permit the rights offering funds to be encumbered by any lien or similar encumbrance.

 

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Issuance of New Common Stock

If an eligible holder properly exercises its rights pursuant to the terms of this rights offering procedures described herein, such holder shall be deemed to own the shares of new common stock immediately on the effective date of the Plan.

Waiver

Each eligible holder that participates in the rights offering shall be deemed by virtue of such participation, to have waived and released, to the fullest extent permitted under applicable law, all rights, claims or causes of action against the Debtors, the reorganized Debtors and the subscription agent and each of their subsidiaries, affiliates, members, officers, directors, agents, financial advisors, accountants, investment bankers, consultants, attorneys, employees, partners and representatives arising out of or related to the receipt, delivery, disbursements, calculations, transmission or segregation of cash, rights and shares of new common stock in connection with the rights offering.

Transfer Restriction; Withdrawal

Pursuant to the Plan, the rights are not transferable. Rights may be exercised only by or through the eligible holder entitled to exercise such rights as of the rights offering record date. Any independent transfer or attempted transfer of the rights will be null and void and the Debtors will not treat any purported transferee as the holder of any rights. Once the eligible holder has properly exercised its rights, such exercise will not be permitted to be withdrawn by such eligible holder.

Proration of Oversubscription Rights

If, as of the expiration deadline, eligible holders, in the aggregate, attempt to exercise more rights in the oversubscription option than are available for all eligible holders electing to exercise their oversubscription rights, then eligible holders will only be able to exercise their pro rata share of such oversubscription rights, and each properly exercising eligible holder shall have the oversubscription rights which it may exercise reduced on a pro rata basis. The difference between the price actually paid by such exercising eligible holder and the eligible holder’s exercise price for new common stock that such eligible holder is entitled to acquire after giving effect to the reduction, if any, shall be refunded, without interest, as soon as reasonably practicable after the effective date of the Plan.

Inquiries and Transmittal of Documents; Subscription Agent

The exercise instructions contained in the rights exercise form should be carefully read and strictly followed.

Questions relating to the rights offering should be directed to the subscription agent at the following address and phone number:

Epiq Bankruptcy Solutions

757 Third Avenue, 3rd Floor

New York, New York 10017

(866) 734-9387

 

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The risk of delivery of all documents and payments is on the eligible holders electing to exercise their rights, and not on the Debtors or the subscription agent. If mail is used, it is recommended that a reputable overnight courier or insured registered mail be used and that a sufficient number of days be allowed to ensure delivery to the subscription agent before the expiration deadline.

Rights Offering Conditioned Upon Confirmation and Effectiveness of the Plan; Reservation of Rights

All exercises of rights are subject to and conditioned upon the confirmation of the Plan and the occurrence of the effective date of the Plan. Furthermore, the rights offering is conditioned upon holders of Class 13a interests voting to accept the Plan. Notwithstanding anything to the contrary, the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) and the reorganized Debtors reserve the right to modify the terms of the rights offering to comply with applicable laws, including the Securities Act.

No Recommendation

Neither we nor our board of directors has made any recommendation as to whether you should exercise your rights. You should make those decisions based upon your own assessment of your best interests.

HSR Act Notice Obligations

If as a result of exercising your rights you would hold shares of our new common stock worth in excess of $63.4 million, your proposed acquisition may trigger notification obligations under the HSR Act, and all waiting periods under the HSR Act will need to have expired or otherwise been terminated before we can satisfy your exercise of rights. You should consider seeking advice of legal counsel to determine the applicability of the HSR Act to your rights.

 

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SHARES OF NEW COMMON STOCK ISSUED IN THE

REORGANIZATION ELIGIBLE FOR FUTURE SALES

Because no shares of new common stock will be issued until the effectiveness of the Plan and the completion of the rights offering, prior to this offering, there has been no public market for our new common stock. We cannot assure you that a significant public market for Chemtura’s new common stock will develop or be sustained after this offering. Future sales of substantial amounts of our new common stock, including shares issued upon exercise of options or warrants, in the public market after this offering, or the perception that those sales could occur, could adversely affect the prevailing market price of our new common stock.

Upon the completion of the rights offering and after giving effect to the confirmation order and the Plan, there will be approximately 100,000,000 shares of our new common stock outstanding. Except as set forth below, all shares of new common stock outstanding after this offering will be freely tradable without restriction or further registration under the Securities Act unless held by one of our “affiliates,” as that term is defined in Rule 144 under the Securities Act. Unless otherwise registered under the Securities Act, sales of shares of our common stock by affiliates will be subject to the volume limitations and other restrictions set forth in Rule 144.

New Common Stock Issued in Reliance on Section 1145 of the Bankruptcy Code

We will rely on section 1145(a)(1) of the Bankruptcy Code to exempt from the registration requirements of the Securities Act the offer and sale of such new common stock to be issued pursuant to the Plan other than the new common stock to be issued pursuant to the exercise of rights in the rights offering. Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of securities under a plan of reorganization from registration under Section 5 of the Securities Act and state laws if certain requirements are satisfied. In general, securities issued under section 1145 may be resold without registration unless the recipient is an “underwriter” with respect to those securities. Section 1145(b)(1) of the Bankruptcy Code defines an “underwriter” as any person who:

 

   

purchases a claim against, an interest in, or a claim for an administrative expense against the debtor, if that purchase is with a view to distributing any security received in exchange for such a claim or interest;

 

   

offers to sell securities offered under a plan of reorganization for the holders of those securities;

 

   

offers to buy those securities from the holders of the securities, if the offer to buy is:

 

   

with a view to distributing those securities; and

 

   

under an agreement made in connection with the plan of reorganization, the completion of the plan of reorganization, or with the offer or sale of securities under the plan of reorganization; or

 

   

is an issuer with respect to the securities, as the term “issuer” is defined in Section 2(a)(11) of the Securities Act.

To the extent that persons who receive new common stock are deemed to be “underwriters,” resales by those persons would not be exempted by section 1145 of the Bankruptcy Code from registration under the Securities Act or other applicable law. Those persons would, however, be permitted to sell our new common stock or other securities without registration if they are able to comply with the provisions of Rule 144 under the Securities Act.

 

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Stock Options and Other Stock Awards

The Plan contemplates the adoption of a new equity incentive plan under which shares of our new common stock, or options or other awards to purchase shares of our new common stock, can be issued to directors, management and other employees of ours. A total of 11,000,000 shares of new common stock will be reserved for issuance under the new equity incentive plan.

We expect to file registration statements on Form S-8 covering all of the shares of common stock issuable or reserved for issuance under the new equity incentive plan. Upon filing of the Forms S-8 applicable to each stock plan, the shares will be freely tradable in the public market, subject to certain limitations applicable to affiliates.

 

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PLAN OF DISTRIBUTION

We intend to distribute rights exercise forms and copies of this prospectus to eligible holders of our common stock who held their shares on the record date for the rights offering, which was August 24, 2010. Eligible holders owning at least 32.9383 shares of common stock as of the record date may be eligible to subscribe for shares of our new common stock at $13.54 per share.

We have not employed any brokers, dealers or underwriters in connection with the solicitation or exercise of rights in the rights offering and no commissions, fees or discounts will be paid by us in connection with the rights offering other than certain fees and expenses of the subscription agent. Certain of our officers and other employees may solicit responses from you, but those officers and other employees will not receive any commissions or compensation for their services other than their normal employment compensation.

We will pay all customary fees and expenses of the subscription agent related to the rights offering. We also have agreed to indemnify the subscription agent from liabilities that they may incur in connection with the rights offering.

 

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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of the certain U.S. federal income tax consequences of the receipt of the rights in the rights offering. This summary is based upon currently existing provisions of the Code, U.S. Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect.

This summary does not discuss all aspects of U.S. federal income taxation that may be important to particular recipients of rights in light of their individual investment circumstances or the U.S. federal come tax consequences to beneficial owners subject to special treatment under U.S. federal income tax laws such as banks and other financial institutions, governmental agencies, partnerships or other pass-through entities, regulated investment companies or real estate investment trusts, insurance companies, brokers, dealers in securities or foreign currency, traders that have elected mark-to-market accounting, tax-exempt organizations, certain former citizens or former long-term residents of the United States, persons subject to the alternative minimum tax, or non-U.S. persons, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any foreign, state, or local tax consequences, or any U.S. tax consequences other than U.S. federal income tax consequences.

No rulings or determinations of the IRS or any other taxing authority have been sought or obtained with respect to the tax consequences described herein, and the discussion below is not binding on the IRS or the courts. Accordingly, we cannot assure you that the IRS will not assert, or that a court will not sustain, a position different from any described herein.

This discussion is limited to U.S. holders who hold the property in respect of which they will receive rights, and who will hold the rights and the common stock into which the rights are exercisable, as a capital asset.

As used herein, the term “U.S. holder” means a recipient of rights that is, or is treated as, for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation (including any entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

   

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

   

a trust (A) if a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have authority to control all of its substantial decisions, or (B) if it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

Receipt of Rights

The distribution of the rights to holders of equity interests in Chemtura should be treated as a tax-free distribution under the Code. Such holder should not recognize gain or loss on the distribution. If you are an equity holder receiving rights under the Plan, you should consult your own tax advisor regarding the proper treatment of the rights in your particular circumstances.

Exercise or Lapse of the Rights

A holder generally will not recognize gain or loss upon the exercise of the right. A holder’s tax basis in the new common stock received upon exercise of a right will be equal to the sum of the holder’s tax basis in the right

 

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(if any) and the amount paid for the new common stock. A holder’s holding period in the new common stock received on exercise of a right will commence the day following its acquisition. Recipients of rights should consult their own tax advisors regarding the basis and holding period consequences of exercising a right.

On the lapse of a right, a holder generally would recognize a loss equal to its tax basis in the right (if any). In general, such gain or loss would be a capital gain or loss, and would be long-term gain or loss to the extent that such holder had held the existing equity interests in Chemtura for more than one year.

Information Reporting and Backup Withholding Tax

The receipt of consideration under the Plan may be subject to information reporting to the IRS and possibly to U.S. backup withholding tax. Backup withholding of taxes, currently at a rate of 28%, will apply to such payments if a holder fails to provide an accurate taxpayer identification number (certified on IRS Form W-9) or otherwise fails to comply with the applicable requirements of the backup withholding rules. Any amounts withheld under the backup withholding rules will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is provided to the IRS.

 

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LEGAL MATTERS

Kirkland & Ellis LLP, Chicago, Illinois, will pass upon the validity of the securities offered in this offering.

EXPERTS

The consolidated financial statements and financial statement schedule of Chemtura Corporation and subsidiaries (Debtor-in-Possession) as of December 31, 2009 and 2008, and for each of the years in the three-year period ended December 31, 2009, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2009 have been incorporated by reference herein and in the registration statement on Form S-1 in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

The audit report covering the December 31, 2009 consolidated financial statements contains an explanatory paragraph that states Chemtura Corporation and 26 of its subsidiaries organized in the United States filed for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code and there are uncertainties inherent in the bankruptcy process. The Company also has suffered recurring losses from continuing operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements and financial statement schedule do not include any adjustments that might result from the outcome of this uncertainty.

The audit report covering the December 31, 2009 consolidated financial statements also contains an explanatory paragraph which states that as discussed in Note 2 to Notes to Consolidated Financial Statements, the Company, due to the adoption of new accounting principles, in 2009, changed its method of accounting for fair value measurements for non-financial assets and liabilities, and non-controlling interest; in 2008, changed its method of accounting for fair value measurements for financial assets and liabilities; and in 2007, changed its method of accounting for uncertainty in income taxes.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the sale of the shares of our new common stock offered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and our new common stock offered by this prospectus, please see the registration statement and the exhibits filed with the registration statement. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits filed with the registration statement may be inspected without charge at the Public Reference Room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is http://www.sec.gov.

We are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information are available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We maintain a website at http://www.chemtura.com. You may access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed pursuant to Sections 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this prospectus.

 

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution.

Expenses payable by Chemtura in connection with the sale of the new common stock being registered are estimated as follows:

 

     Amounts to
be Paid

Securities and Exchange Commission Registration Fee

   $ 7,130

Legal Fees and Expenses

   $ 250,000

Accounting Fees and Expenses

   $ 35,000

Subscription Agent, Printing and Delivery Fees

   $ 505,000

Listing Fees

   $ 25,000

Miscellaneous Expenses

   $ 5,000
      

Total

   $ 827,130
      

 

Item 14. Indemnification of Directors and Officers.

Section 145(a) of the General Corporation Law of the State of Delaware (the “DGCL”) empowers a Delaware corporation to indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys’ fees) judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such officer, director, employee or agent acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests, and, for criminal proceedings, had no reasonable cause to believe his or her conduct was unlawful. Section 145(b) of the DGCL provides that a Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such officer or director actually and reasonably incurred.

Section 145(g) of the DGCL provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against the person in any such capacity, or arising out of the person’s status as such, whether or not the corporation would have the power to indemnify the person against such liability under the provisions of the DGCL.

In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation will provide that the directors of Chemtura shall not be personally liable to Chemtura or its stockholders for monetary damages for violations of their fiduciary duty, except (i) for any breach of the director’s fiduciary duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or (iv) for any transaction from which the director derived an improper personal benefit. Our amended and restated certificate of incorporation will contain provisions permitted by Section 102(b)(7) of the DGCL.

 

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Our amended and restated certificate of incorporation will provide for indemnification of the officers and directors of Chemtura to the fullest extent permitted by the DGCL.

The forgoing is only a general summary of certain aspects of Delaware law and the registrant’s organizational documents dealing with indemnification of directors and officers and does not purport to be complete. It is qualified in its entirety by reference to the applicable provisions of the DGCL and of the registrant’s amended and restated certificate of incorporation and bylaws.

In addition, Chemtura’s directors and officers are covered by insurance indemnifying them against certain liabilities which might be incurred by them in their capacities as such, including certain liabilities under the Securities Act.

 

Item 15. Recent Sales of Unregistered Securities.

Not applicable.

 

Item 16. Exhibits and Financial Statement Schedules.

 

  (a) See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-1, which Exhibit Index is incorporated herein by reference.

 

  (b) Financial Statement Schedules

All schedules have been omitted because they are not applicable or because the required information is shown in the financial statements or notes thereto.

 

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

 

1. to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

  (a) to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

  (b) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

  (c) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

2. that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

 

3. to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

 

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4. that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and

 

5. that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

  (a) any preliminary prospectus or prospectus of an undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

  (b) any free writing prospectus relating to the offering prepared by, or on behalf of, the undersigned registrant or used or referred to by the undersigned registrant;

 

  (c) the portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

  (d) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions set forth in response to Item 15, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Middlebury, Connecticut on August 27, 2010.

 

CHEMTURA CORPORATION

(DEBTOR-IN-POSSESSION)

(Registrant)

By:   /s/    STEPHEN C. FORSYTH        
Name:   Stephen C. Forsyth
Title:   Executive Vice President and
Chief Financial Officer

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

        *        

Craig A. Rogerson

  

Chairman of the Board, President, Chief Executive Officer and Director

(Principal Executive Officer)

  August 27, 2010.

/s/    STEPHEN C. FORSYTH        

Stephen C. Forsyth

  

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

  August 27, 2010.

        *        

Kevin V. Mahoney

  

Senior Vice President and Corporate Controller

(Principal Accounting Officer)

  August 27, 2010.

        *        

Nigel D. T. Andrews

  

Director

  August 27, 2010.

        *        

James W. Crownover

  

Director

  August 27, 2010.

        *        

Martin M. Hale

  

Director

  August 27, 2010.

        *        

Roger L. Headrick

  

Lead Director

  August 27, 2010.

        *        

Burton M. Joyce

  

Director

  August 27, 2010.

        *        

Bruce F. Wesson

  

Director

  August 27, 2010.

 

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Signature

  

Title

 

Date

        *        

John K. Wulff

  

Director

  August 27, 2010.

 

* By:  

/s/    STEPHEN C. FORSYTH        

  Attorney-in-fact

 

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Exhibit Index

 

Exhibit
No.

  

Description

2.1

   Debtors Joint Chapter 11 Plan.

3.1

   Form of Amended and Restated Certificate of Incorporation of Chemtura Corporation (the “Registrant”).

3.2

   Form of Bylaws of the Registrant.

4.1

   Indenture, dated as of February 1, 1993, between Witco Corporation and The Chase Manhattan Bank, N.A. relating to $150 million of 6.875% debentures due 2026 (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 10-K for the year ended December 31, 2008, as amended).

4.2

   Indenture, dated as of July 16, 1999, between Great Lakes Chemical Corporation and The First National Bank of Chicago relating to $400 million of 7% notes due July 15, 2009 (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 10-K for the year ended December 31, 2008, as amended).

4.3

   Rights Agreement, dated as of September 2, 1999, by and between the Registrant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-A filed September 28, 1999).

4.4

   Form of First Supplemental Indenture, dated February 1, 1996, by and among Witco Corporation, Chase Manhattan Bank, N.A., the Initial Trustee, and Fleet National Bank of Connecticut, the Note Trustee, relating to the 6 1/8% Notes due 2006 and 6 7/8% Notes due 2026 (incorporated by reference to Exhibit 4.4 to the Registrant’s Form 10-K for the year ended December 31, 2008, as amended).

4.5

   Second Supplemental Indenture, dated as of August 5, 2004, between Crompton Corporation and U.S. Bank, National Association, to the 1993 Indenture (incorporated by reference to Exhibit 4.4 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

4.6

   Fourth Supplemental Indenture, dated as of July 1, 2005. to the Indenture dated as of February 1, 1993, among the Registrant, the Guarantors signatory thereto, Manufacturers and Traders Trust Company, as trustee, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K filed July 1, 2005).

4.7

   Indenture, dated as of August 16, 2004, among Crompton Corporation, the Guarantors listed on Schedule A thereto, Wells Fargo Bank, National Association, as trustee and Deutsche Bank Trust Company Americas as Note Custodian, Paying Agent and Registrar, relating to the Registrant’s 9 7/8% Senior Notes due 2012 (incorporated by reference to Exhibit 4.5 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

4.8

   Indenture, dated as of August 16, 2004, among Crompton Corporation, the Guarantors listed on Schedule A thereto, Wells Fargo Bank, National Association, as trustee and Deutsche Bank Trust Company Americas as Note Custodian, Paying Agent and Registrar, relating to the Registrant’s Senior Floating Rate Notes due 2010 (incorporated by reference to Exhibit 4.6 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

4.9

   Supplemental Indenture dated as of May 31, 2005, by and between Crompton Corporation and Wells Fargo Bank, National Association, as Trustee, relating to Crompton Corporation Senior Floating Rate Notes due 2010 (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed June 1, 2005).

  4.10

   Supplemental Indenture dated as of May 31, 2005, by and between Crompton Corporation and Wells Fargo Bank, National Association, as Trustee, relating to Crompton Corporation 9 7/8% Senior Notes due 2012 (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K filed June 1, 2005).

 

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Exhibit
No.

  

Description

  4.11

   Indenture dated as of April 24, 2006, by and among the Registrant as Issuer, the Guarantors named therein and Wells Fargo Bank, N.A., as Trustee relating to the Registrant’s 6.875% Notes due 2016 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the period ended March 31, 2006).

  4.12

   Supplemental Indenture, dated as of February 11, 2009, among GLCC LAUREL, LLC, BIOLAB COMPANY STORE, LLC and BIOLAB FRANCHISE COMPANY, LLC, each an indirect subsidiary of Registrant, and Wells Fargo Bank, N.A., as Trustee (incorporated by reference to Exhibit 10.61 to Registrant’s Form 10-K for the year ended December 31, 2008).

  4.13

   Supplemental Indenture, dated as of July 1, 2005, to the Indenture dated as of July 16, 1999, among Great Lakes Chemical Corporation, the Registrant, the Guarantors signatory thereto and J.P. Morgan Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K filed July 1, 2005).

  4.14

   Purchase Agreement, dated as of August 13, 2010, among the Registrant, certain of the Registrant’s subsidiaries, as guarantors, Citigroup Global Markets Inc., Banc of America Securities LLC, Barclays Capital Inc., Wells Fargo Securities, LLC and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed August 17, 2010).

  4.15

  

Escrow Agreement, dated as of August 27, 2010, among the Registrant, U.S. Bank National Association and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed August 27, 2010).

  4.16

   Indenture, dated as of August 27, 2010, among the Registrant and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K filed August 27, 2010).

  4.17

   Registration Rights Agreement, dated as of August 27, 2010, among the Registrant, the subsidiaries named therein, Citigroup Global Markets Inc., Banc of America Securities LLC, Barclays Capital Inc., Wells Fargo Securities, LLC and Goldman, Sachs & Co. (incorporated by reference to Exhibit 4.3 to the Registrant’s Form 8-K filed August 27, 2010).

  5.1

   Opinion of Kirkland & Ellis LLP.

10.1  

   Supplement No. 1, dated as of March 26, 2004, to the Security Agreement dated as of December 21, 2001, among the Registrant, various subsidiaries of the Registrant, and Citicorp USA, Inc., as Collateral Agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q for the period ended March 31, 2004).

10.2  

   Credit Agreement, dated as of August 16, 2004, among Crompton Corporation, the Lenders from time to time party thereto, Deutsche Bank AG, Cayman Islands Branch, as Deposit Bank and Deutsche Bank AG New York Branch, as Administrative Agent (incorporated by reference to Exhibit 10.43 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

10.3  

   Security Agreement, dated as of August 16, 2004, among Crompton Corporation, certain of its subsidiaries from time to time party thereto and Deutsche Bank AG New York Branch as Collateral Agent (incorporated by reference to Exhibit 10.47 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

10.4  

   Pledge Agreement, dated as of August 16, 2004, among Crompton Corporation, certain of its subsidiaries from time to time party thereto and Deutsche Bank AG New York Branch, as Pledgee (incorporated by reference to Exhibit 10.48 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

 

II-7


Table of Contents

Exhibit
No.

  

Description

10.5  

   Subsidiaries Guaranty, dated as of August 16, 2004, among certain subsidiaries of Crompton Corporation and Deutsche Bank AG New York Branch, as Administrative Agent (incorporated by reference to Exhibit 10.49 of the Company’s Registration Statement on Form S-4 Registration Number 333-119641, filed October 8, 2004).

10.6+

   Form of Supplemental Savings Plan, effective January 1, 2005, by and between the Registrant and various key management personnel (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed February 28, 2005).

10.7+

   2005 Crompton Corporation Short-Term Incentive Plan, effective January 1, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed April 27, 2005).

10.8  

   Credit Agreement, dated as of July 1, 2005, among the Registrant, the Lenders listed therein, Citibank, N.A., as Agent, and Bank of America, N.A., as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed July 1, 2005).

10.9  

   Amendment No. 1 to the Credit Agreement by and among the Registrant, various lenders and Citibank, N.A., as Agent, dated as of December 12, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed December 15, 2005).

10.10

   Amended and Restated Credit Agreement by and among the Registrant, various lenders and Citibank, N.A., as Agent, dated as of December 12, 2005 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed December 15, 2005).

10.11

   Amendment No. 2, dated as of December 31, 2005, to the 2005 Credit Agreement by and among the Registrant, various lenders and Citibank N.A., as Agent, dated as of July 1, 2005, as amended and restated by Amendment No. 1 dated as of December 12, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed February 15, 2006).

10.12

   Amendment No. 3, dated as of December 31, 2005, to the Credit Agreement by and among the Registrant, various lenders and Citibank N.A., as Agent, dated as of July 1, 2005, as amended and restated by Amendment No. 1 dated as of December 12, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed March 20, 2006.)

  10.13+

   Chemtura Corporation 2006 Long-Term Incentive Plan, effective April 27, 2006 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed April 27, 2006).

10.14

   Form of Amendment No. 4 to the Credit Agreement by and among the Registrant, various lenders and Citibank, N.A., as Agent, dated as of May 9, 2006 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed May 26, 2006).

  10.15+

   Employment Agreement dated as of June 13, 2006, by and between the Registrant and Robert L. Wood (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed June 19, 2006).

10.16

   Form of Amendment No. 5 to the Credit Agreement by and among the Registrant, various lenders and Citibank, N.A., as Agent, dated as of December 14, 2006 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed December 15, 2006).

10.17

   Form of Amendment No. 6 to the Credit Agreement by and among the Registrant, various lenders and Citibank, N.A., as Agent, dated as of February 27, 2007 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed February 28, 2007).

  10.18+

   Employment of Stephen C. Forsyth was accompanied by a sign-on bonus, performance-based restricted stock, restricted stock grant, stock options, participation in the Management Incentive Plan, Key Executive and Key Employee Severance Plan, Supplemental Savings Plan, and the “Flexperq” Program (incorporated by reference to the Registrant’s Form 8-K filed April 9, 2007).

 

II-8


Table of Contents

Exhibit
No.

  

Description

  10.19+

   2007-2009 Chemtura Corporation Long-Term Incentive Plan, effective March 28, 2007 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed March 29, 2006).

  10.20+

   Agreement dated November 28, 2007 by and between the Registrant and David G. Dickey, (incorporated by reference to Exhibit 10.84 to the Registrant’s Form 10-K for the year ended December 31, 2007).

  10.21+

   Separation Agreement and General Release dated January 21, 2008, by and between Gary P. Yeaw and the Registrant (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed January 23, 2008).

  10.22+

   2008 Chemtura Corporation Management Incentive Program, effective February 28, 2008 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed March 3, 2008).

  10.23+

   2008-2010 Chemtura Corporation Long-Term Incentive Plan, effective February 28, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed March 3, 2008).

  10.24+

   The Board of Directors of the Registrant adopted a new compensation schedule (dated as of October 28, 2008) for non-employee members of the Board of Directors, (incorporated by reference to the Registrant’s Form 8-K filed October 31, 2008).

10.25

   Amendment Number 1 to Receivables Purchase Agreement (dated as of May 31, 2007), (incorporated by reference to Exhibit 10.86 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

10.26

   Letter Agreement Regarding Receivables Purchase Agreement (dated as of May 31, 2007) (incorporated by reference to Exhibit 10.87 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

10.27

   Amendment Number 2 to Amended and Restated Receivables Purchase Agreement (dated as of June 28, 2007), (incorporated by reference to Exhibit 10.88 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

10.28

   First Amendment, dated as of May 31, 2007 to Fourth Amended and Restated Receivables Sale Agreement Dated as of September 28, 2006, (incorporated by reference to Exhibit 10.89 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

10.29

   Amendment No. 2 to Fourth Amended and Restated Receivables Sale Agreement (dated as of June 28, 2007), (incorporated by reference to Exhibit 10.90 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

10.30

   Third Amendment, dated as of August 31, 2007 to Fourth Amended and Restated Receivables Sale Agreement Dated as of September 28, 2006, (incorporated by reference to Exhibit 10.91 to the Registrant’s Form 10-Q for the period ended September 30, 2008).

  10.31+

   Employment Agreement dated as of December 8, 2008, by and between the Registrant and Craig A. Rogerson (incorporated by reference to Exhibit 10.86 to the Registrant’s Form 8-K filed December 9, 2008).

  10.32+

   Separation Agreement and General Release, dated as of December 8, 2008, by and between Mr. Robert L. Wood and the Registrant (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed December 16, 2008).

  10.33+

   Separation Agreement and General Release dated January 19, 2009, by and between Lynn A. Schefsky and the Registrant (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed February 5, 2009).

 

II-9


Table of Contents

Exhibit
No.

  

Description

10.34

   Sixth Amendment and Waiver Agreement, dated as of December 30, 2008, to the Fourth Amended and Restated Receivables Sale Agreement dated as of September 28, 2006, by and among Crompton & Knowles Receivables Corporation, as seller (“Seller”), Chemtura Corporation, as the initial collection agent, The Royal Bank of Scotland plc (as successor to ABN AMRO Bank N.V.), as agent, and various other banks and liquidity providers (incorporated by reference to Exhibit 10.1 to the Registrant’s December 30, 2008 Form 8-K/A filed January 2, 2009).

10.35

   Form of Receivables Purchase Agreement, dated as of January 23, 2009, by and among Registrant, as Seller, Registrant as the Servicer, Citicorp USA, Inc., as Agent, Citigroup Global Markets Inc., as Arranger and The Royal Bank of Scotland Plc, as Syndication Agent (incorporated by reference to Exhibit 10.92 to the Registrant’s Form 8-K filed January 27, 2009).

10.36

   Form of Receivables Sale Agreement, dated as of January 23, 2009, by and among Registrant, Great Lakes Chemical Corporation, GLCC Laurel, LLC, and BioLab, Inc. as Sellers, Chemtura Receivables LLC, as Buyer, Registrant as Buyer’s Servicer, and Citicorp USA, Inc., as Agent, (incorporated by reference to Exhibit 10.93 to the Registrant’s Form 8-K filed January 27, 2009).

10.37

   Addendum, dated as of February 13, 2009, to Separation Agreement and General Release, dated as of December 8, 2008, by and between Mr. Robert L. Wood and the Registrant (Separation Agreement and General Release incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed December 16, 2008).

10.38

   Amended and Restated Pledge Agreement from the pledgors referred to therein to Citibank, N.A., as agent, dated as of July 31, 2007 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed August 6, 2007).

10.39

   Amendment No. 1, dated as of September 30, 2007, to the Amended and Restated Credit Agreement dated as of July 31, 2007, with its lenders (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed November 5, 2007).

10.40

   Waiver and Amendment No. 2, dated as of December 30, 2008, to the Amended and Restated Credit Agreement dated July 31, 2007 (the “2007 Credit Agreement”) with Citibank, N.A., as agent, and the other lenders and agents party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s December 30, 2008 Form 8-K/A filed January 2, 2009).

10.41

   Second Amended and Restated Pledge and Security Agreement, dated as of December 30, 2008, among Chemtura Corporation, certain domestic subsidiaries of Chemtura Corporation, and Citibank, N.A., as agent (incorporated by reference to Exhibit 10.3 to the Registrant’s December 30, 2008 Form 8-K/A filed January 2, 2009).

10.42+

   Chemtura Corporation Supplemental Savings Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed January 2, 2009).

10.43

   Receivables Purchase Agreement dated as of January 23, 2009 (incorporated by reference to Exhibit 10.92 to the Registrant’s Form 8-K filed January 27, 2009).

10.44

   Receivables Sales Agreement dated as of January 23, 2009 (incorporated by reference to Exhibit 10.93 to the Registrant’s Form 8-K filed January 27, 2009).

10.45

   Separation Agreement and General Release, dated as of January 19, 2009, between Chemtura Corporation and Lynn A. Schefsky (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed February 5, 2009).

  10.46+

   2009 Chemtura Corporation Management Incentive Program (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed March 10, 2009).

 

II-10


Table of Contents

Exhibit
No.

  

Description

  10.47+

   Chemtura Corporation Executive and Key Employee Severance Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed March 13, 2009).

10.48

   Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of March 18, 2009 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the period ended March 31, 2009).

10.49

   Amendment No. 1, dated as of April 29, 2009, to the Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of March 18, 2009 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q for the period ended March 31, 2009).

10.50

   Letter Agreement, dated March 18, 2009, between the Company and Alvarez & Marsal North America, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q for the period ended March 31, 2009).

10.51

   Separation Agreement and General Release, dated as of July 1, 2009, between Chemtura Corporation and Robert Wedinger (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K filed July 9, 2009).

10.52

   Amendment No. 2, dated as of July 13, 2009, to the Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of March 18, 2009 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed July 16, 2009).

10.53

   2009 Chemtura Corporation Management Incentive Program (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the period ended June 30, 2009).

10.54

   Share and Asset Purchase Agreement, dated December 23, 2009, among Chemtura Corporation, SK Atlas, LLC and SK Capital Partners II, LP (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed December 23, 2009).

10.55

   Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of March 18, 2009, including Schedules and Exhibits (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 10-Q for the period ended September 30, 2009).

10.56

   Amendment No. 3, dated as of January 15, 2010, to the Senior Secured Superpriority Debtor-in Possession Credit Agreement, dated as of March 18, 2009 (incorporated by reference to Exhibit 10.57 to the Registrant’s Form 10-K for the year ended December 31, 2009).

10.57

   Share and Asset Purchase Agreement between Chemtura Corporation and SK Atlas, LLC and SK Capital Partners II, LLP, dated December 15, 2010 (incorporated by reference to Exhibit 10.58 to the Registrant’s Form 10-K for the year ended December 31, 2009).

10.58

   Amended and Restated Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated February 3, 2010 (incorporated by reference to Exhibit 10.59 to the Registrant’s Form 10-K for the year ended December 31, 2009).

10.59

   Share and Asset Purchase Agreement by and among Artek Aterian Holding Company, LLC, Aterian Investment Partners Distressed Opportunities, LP, Artek Surfin Chemicals Ltd. and Chemtura Corporation, dated February 23, 2010 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed February 24, 2010).

  10.60+

   Crompton Corporation Directors Deferred Compensation Plan, as amended on January 30, 2001 (incorporated by reference to Exhibit 10.59 to the Registrant’s amended Form 10-K filed April 29, 2010).

  10.61+

   Great Lakes Chemical Corporation 1993 Employee Stock Compensation Plan (incorporated by reference to Exhibit 10.60 to the Registrant’s amended Form 10-K filed April 29, 2010).

 

II-11


Table of Contents

Exhibit
No.

  

Description

  10.62+

   Great Lakes Chemical Corporation 1998 Stock Compensation Plan (incorporated by reference to Exhibit 10.61 to the Registrant’s amended Form 10-K filed April 29, 2010).

  10.63+

   Amended Crompton Corporation 1998 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.21 to the Registrant’s Form 10-K for the year ended December 31, 2001).

  10.64+

   Crompton Corporation 2001 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.63 to the Registrant’s amended Form 10-K filed April 29, 2010).

  10.65+

   Great Lakes Chemical Corporation 2002 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.64 to the Registrant’s amended Form 10-K filed April 29, 2010).

10.66

   Amendment No. 1 to the Amended and Restated Credit Agreement by and among Chemtura Corporation, the guarantors named therein and Citibank, N.A., dated July 27, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed July 26, 2010 (as amended July 28, 2010)).

10.67

   Escrow Agreement, dated as of August 27, 2010, among the Registrant, Bank of America, N.A. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.4 to the Registrant’s Form 8-K filed August 27, 2010).

10.68

   Senior Secured Term Facility Agreement, dated as of August 27, 2010, among the Registrant, Bank of America, N.A., as Administrative Agent, the other agents party thereto and the Initial Lenders and other Lenders party thereto (incorporated by reference to Exhibit 4.5 to the Registrant’s Form 8-K dated August 27, 2010).

18.1  

   Independent Registered Public Accounting Firm’s Preferability Letter concerning the change in the measurement date for the Company’s defined benefit and other post-retirement benefit plans from December 31 to November 30 (incorporated by reference to Exhibit 18 to the Registrant’s Form 10-K for the year ended December 31, 2005).

21.1  

   Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to the Registrant’s Form 10-K for the year ended December 30, 2009).

23.1  

   Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).

23.2  

   Consent of KPMG LLP.

24.1  

   Powers of Attorney (included in signature page).

99.1  

   Form of Rights Offering Exercise Form—Registered Holders.

99.2  

   Form of Rights Offering Exercise Form—Beneficial Holders.

 

+ This Exhibit is a compensatory plan, contract or arrangement in which one or more directors or executive officers of the Registrant participate.

 

II-12


Exhibit 2.1

 

Richard M. Cieri
M. Natasha Labovitz
Craig A. Bruens
Dana Yankowitz
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022-4611
Telephone:    (212) 446-4800
Facsimile:    (212) 446-4900
Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

 

     )   
In re:    )    Chapter 11
   )   
CHEMTURA CORPORATION, et  al.,1   

)

   Case No. 09-11233 (REG)
   )   
Debtors.    )    Jointly Administered
     )   

 

 

JOINT CHAPTER 11 PLAN OF CHEMTURA CORPORATION, ET AL.

 

 

THIS CHAPTER 11 PLAN IS BEING SUBMITTED FOR

APPROVAL BY THE BANKRUPTCY COURT. THIS CHAPTER 11 PLAN

HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT. ACCORDINGLY, THIS IS

NOT A SOLICITATION OF AN ACCEPTANCE OR REJECTION OF THE CHAPTER 11

PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE,

11 U.S.C. § 1125. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL

A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT.

Dated: August 4, 2010

 

 

1

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal taxpayer-identification number, are: Chemtura Corporation (3153); A&M Cleaning Products, LLC (4712); Aqua Clear Industries, LLC (1394); ASCK, Inc. (4489); ASEPSIS, Inc. (6270); BioLab Company Store, LLC (0131); BioLab Franchise Company, LLC (6709); Bio-Lab, Inc. (8754); BioLab Textile Additives, LLC (4348); CNK Chemical Realty Corporation (5340); Crompton Colors Incorporated (3341); Crompton Holding Corporation (3342); Crompton Monochem, Inc. (3574); GLCC Laurel, LLC (5687); Great Lakes Chemical Corporation (5035); Great Lakes Chemical Global, Inc. (4486); GT Seed Treatment, Inc. (5292); HomeCare Labs, Inc. (5038); ISCI, Inc. (7696); Kem Manufacturing Corporation (0603); Laurel Industries Holdings, Inc. (3635); Monochem, Inc. (5612); Naugatuck Treatment Company (2035); Recreational Water Products, Inc. (8754); Uniroyal Chemical Company Limited (Delaware) (9910); Weber City Road LLC (4381); and WRL of Indiana, Inc. (9136).


TABLE OF CONTENTS

 

ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW

   1

1.1

     Defined Terms    1

1.2

     Additional Defined Terms    13

1.3

     Rules of Interpretation    14

1.4

     Computation of Time    14

1.5

     Governing Law    14

1.6

     Reference to Monetary Figures    14

1.7

     Reference to the Debtors or the Reorganized Debtors    14

ARTICLE II ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS, DIP CLAIMS AND STATUTORY FEES

   15

2.1

     Administrative Claims    15

2.2

     Priority Tax Claims    16

2.3

     DIP Claims    16

2.4

     Statutory Fees    16

2.5

     Administrative Claims, Priority Tax Claims and DIP Claims Against Chemtura Canada    16

ARTICLE III CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

   17

3.1

     Classification of Claims and Interests    17

3.2

     Summary of Classification    17

3.3

     Treatment of Claims and Interests    18

3.4

     Treatment of Claims Against and Interests in Chemtura Canada    25

ARTICLE IV ACCEPTANCE REQUIREMENTS

   25

4.1

     Acceptance or Rejection of the Plan    25

4.2

     Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code    26

ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN

   26

5.1

     General Settlement of Claims and Interests    26

5.2

     The Creditors’ Committee Action    26

5.3

     The PBGC Settlement    26

5.4

     The CHCI Preferred Stock Settlement    26

5.5

     The Make-Whole Settlement and the No-Call Settlement    27

5.6

     The Settlement Regarding the Fees of the Ad Hoc Bondholders’ Committee    27

5.7

     Environmental Matters    28

5.8

     The Unsecured Distribution Pool    28

5.9

     Election of Cash and New Common Stock    29

5.10

     Exit Financing/Incurrence of New Indebtedness    29

5.11

     Sources of Consideration for Plan Distributions    29

5.12

     The Rights Offering    30

5.13

     Cancellation of Securities and Agreements    30

5.14

     Surrender of Existing Securities    30

5.15

     Section 1145 Exemption    31

5.16

     Corporate Existence    31

5.17

     New Certificate of Incorporation and New By-Laws    31

5.18

     New Chemtura’s and Reorganized Debtors’ Boards of Directors    31

5.19

     Officers of New Chemtura and Reorganized Debtors    32

5.20

     Employee Benefits    32

5.21

     Retiree Benefits    32

5.22

     The Incentive Plans    33

5.23

     Vesting of Assets in the Reorganized Debtors    33


5.24

     Restructuring Transactions    33

5.25

     Corporate Action    33

5.26

     Effectuating Documents; Further Transactions    34

5.27

     Section 1146 Exemption from Certain Taxes and Fees    34

5.28

     D&O Liability Insurance Policies    34

5.29

     Preservation of Rights of Action    34

5.30

     Single Satisfaction of Claims    35

ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

   35

6.1

     Assumption and Rejection of Executory Contracts and Unexpired Leases    35

6.2

     Claims Based on Rejection of Executory Contracts or Unexpired Leases    35

6.3

     Cure of Defaults for Executory Contracts and Unexpired Leases Assumed    36

6.4

     Modifications, Amendments, Supplements, Restatements or Other Agreements    36

6.5

     Reservation of Rights    36

6.6

     Contracts and Leases Entered Into After the Petition Date    37

6.7

     Assumption of Insurance Policies    37

ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS

   37

7.1

     Total Enterprise Value    37

7.2

     Record Date for Distributions    37

7.3

     Timing and Calculation of Amounts to Be Distributed    37

7.4

     Disbursing Agent    37

7.5

     Rights and Powers of Disbursing Agent    38

7.6

     Distributions on Account of Claims Allowed After the Effective Date    38

7.7

     Delivery of Distributions and Undeliverable or Unclaimed Distributions    38

7.8

     Compliance with Tax Requirements and Allocations    39

7.9

     Setoffs    39

7.10

     Claims Paid or Payable by Third Parties    40

ARTICLE VIII PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED AND DISPUTED CLAIMS OTHER THAN DIACETYL CLAIMS

   40

8.1

     Prosecution of Objections to Claims    40

8.2

     Allowance of Claims and Interests    41

8.3

     Disputed Claims Reserve    41

8.4

     Distributions After Allowance    41

8.5

     Distribution of Excess Amounts in the Disputed Claims Reserve    41

8.6

     Property Held in the Disputed Claims Reserve    42

8.7

     Estimation of Claims    42

8.8

     Deadline to File Objections to Claims    42

ARTICLE IX PROCEDURES FOR RESERVING FOR ENVIRONMENTAL CLAIMS

   42

9.1

     Formation of Environmental Trust    42

9.2

     Environmental Reserve    42

9.3

     Distributions from the Environmental Reserve    43

9.4

     Distribution of Excess Amounts in the Environmental Reserve    43

9.5

     Property Held in the Environmental Reserve    43

ARTICLE X PROCEDURES FOR RESERVING FOR AND RESOLVING DIACETYL CLAIMS

   43

10.1

     Formation of Diacetyl Trust    43

10.2

     Objections to Diacetyl Claims    43

10.3

     Diacetyl Reserve    44

10.4

     Distributions from the Diacetyl Reserve    44

10.5

     Distribution of Excess Amounts in the Diacetyl Reserve    44

10.6

     Property Held in the Diacetyl Reserve    45


ARTICLE XI SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS

   45

11.1

     Compromise and Settlement of Claims, Interests and Controversies    45

11.2

     Releases by the Debtors    45

11.3

     Releases by Holders of Claims and Interests    46

11.4

     Releases by Holders of Diacetyl Claims    46

11.5

     Exculpation    46

11.6

     Discharge of Claims and Termination of Interests    46

11.7

     Injunction    47

11.8

     Term of Injunctions or Stays    48

11.9

     Protection Against Discriminatory Treatment    48

11.10

     Release of Liens    48

ARTICLE XII CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE EFFECTIVE DATE

   48

12.1

     Conditions Precedent to Confirmation    48

12.2

     Additional Condition Precedent to Confirmation    49

12.3

     Conditions Precedent to the Effective Date    49

12.4

     Additional Conditions Precedent to the Effective Date    49

12.5

     Waiver of Conditions    49

12.6

     Effect of Failure of Conditions    50

ARTICLE XIII MODIFICATION, REVOCATION OR WITHDRAWAL OF THE PLAN

   50

13.1

     Modification and Amendments    50

13.2

     Effect of Confirmation on Modifications    50

13.3

     Revocation or Withdrawal of the Plan    50

ARTICLE XIV RETENTION OF JURISDICTION

   50

14.1

     Jurisdiction of the Bankruptcy Court    50

14.2

     Jurisdiction of the Bankruptcy Court in the Event Chemtura Canada Becomes a Debtor    52

ARTICLE XV MISCELLANEOUS PROVISIONS

   52

15.1

     Immediate Binding Effect    52

15.2

     Additional Documents    53

15.3

     Dissolution of Creditors’ Committee and Equity Committee    53

15.4

     Payment of Fees and Expenses of the Creditors’ Committee, the Equity Committee, the Prepetition Administrative Agent and the Indenture Trustees    53

15.5

     Reservation of Rights    53

15.6

     Successors and Assigns    54

15.7

     Service of Documents    54

15.8

     Entire Agreement    54

15.9

     Severability of Plan Provisions    54

15.10

     Exhibits    54

15.11

     Votes Solicited in Good Faith    55

15.12

     Closing of Chapter 11 Cases    55

15.13

     Conflicts    55

15.14

     Insurance Neutrality    55

 


INTRODUCTION

Chemtura Corporation and its affiliated debtors and debtors in possession in the above-captioned Chapter 11 Cases respectfully propose the following joint chapter 11 plan of reorganization. Capitalized terms used in the Plan and not otherwise defined shall have the meanings ascribed to such terms in Section 1.1 hereof.

ARTICLE I

DEFINED TERMS, RULES OF INTERPRETATION,

COMPUTATION OF TIME AND GOVERNING LAW

 

1.1 Defined Terms

Unless the context otherwise requires, the following terms shall have the following meanings when used in capitalized form:

1. “2009 Notes” means the approximately $370 million in principal amount outstanding of 7% unsecured notes, issued by Great Lakes Chemical Corporation pursuant to the 2009 Notes Indenture.

2. “2009 Notes Claims” means any Claim arising under the 2009 Notes.

3. “2009 Notes Indenture” means the Indenture, dated as of July 16, 1999, between Great Lakes Chemical Corporation, as issuer and the 2009 Notes Indenture Trustee, as well as any guarantees and other documents entered into in connection therewith, and as amended by a Supplemental Indenture, dated as of July 1, 2005.

4. “2009 Notes Indenture Trustee” means The Bank of New York Mellon Trust Company and/or its duly appointed successor, in its capacity as indenture trustee under the 2009 Notes Indenture.

5. “2016 Notes” means the approximately $500 million in principal amount outstanding of 6.875% unsecured notes, issued by Chemtura Corporation pursuant to the 2016 Notes Indenture.

6. “2016 Notes Claims” means any Claim arising under the 2016 Notes.

7. “2016 Notes Indenture” means the Indenture, dated as of April 24, 2006 between Chemtura Corporation, as issuer, each of the guarantors named therein and the 2016 Notes Indenture Trustee, as well as any guarantees and other documents entered into in connection therewith, and as amended by a Supplemental Indenture, dated as of February 11, 2009.

8. “2016 Notes Indenture Trustee” means U.S. Bank National Association and/or its duly appointed successor, in its capacity as indenture trustee under the 2016 Notes Indenture.

9. “2026 Notes” means the approximately $150 million in principal amount outstanding of 6.875% unsecured debentures, issued by Witco Corporation, predecessor in interest to Chemtura Corporation, pursuant to the 2026 Notes Indenture.

10. “2026 Notes Claims” means any Claim arising under the 2026 Notes.

11. “2026 Notes Indenture” means the Indenture, dated as of February 1, 1993, between Chemtura Corporation (as successor to Witco Corporation), as issuer and the 2026 Notes Trustee, as well any guarantees and other documents entered into in connection therewith, and as amended by a First Supplemental Indenture, dated as of February 1, 1996, a Second Supplemental Indenture, dated as of August 31, 1999, a Third Supplemental Indenture, dated as of August 5, 2004, and a Fourth Supplemental Indenture, dated as of July 1, 2005.


12. “2026 Notes Indenture Trustee” means Manufacturers & Traders Trust Co. and/or its duly appointed successor, in its capacity as indenture trustee under the 2026 Notes Indenture.

13. “Accrued Professional Compensation” means, at any given moment, all accrued, contingent and/or unpaid fees (including success fees) for legal, financial advisory, accounting and other services and obligations for reimbursement of expenses rendered or incurred before the Effective Date that are awardable and allowable under sections 328, 330(a) or 331 of the Bankruptcy Code by any retained Professional in the Chapter 11 Cases, or that are awardable and allowable under section 503 of the Bankruptcy Code, that has not been denied by a Final Order, all to the extent that any such fees and expenses have not been previously paid. To the extent that the Bankruptcy Court or any higher court denies or reduces by a Final Order any amount of a Professional’s fees or expenses, then those reduced or denied amounts shall no longer constitute Accrued Professional Compensation. For the avoidance of doubt, Accrued Professional Compensation shall not include any accrued, contingent and/or unpaid fees for services and obligations for reimbursement of expenses rendered or incurred before the Effective Date by any Entity retained pursuant to the Ordinary Course Professional Order and authorized to be compensated thereunder without filing a fee application.

14. “Ad Hoc Bondholders’ Committee” means the ad hoc committee representing certain holders of Notes Claims and Prepetition Unsecured Lender Claims.

15. “Administrative Claim” means a Claim for costs and expenses of administration pursuant to sections 503(b), 507(a)(2), 507(b) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of preserving the Estates and operating the businesses of the Debtors; (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses Allowed pursuant to sections 328, 330(a), 331 or 363 of the Bankruptcy Code or otherwise for the period commencing on the Petition Date and through the Effective Date; (c) all fees and charges assessed against the Estates pursuant to chapter 123 of title 28 of the United States Code, 28 U.S.C. §§ 1–4001; and (d) all requests for compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to sections 503(b)(3), (4) and (5) of the Bankruptcy Code.

16. “Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code.

17. “Allowed” means, (a) with respect to Claims, and including applicable premiums and penalties to the extent allowable: (i) any Claim proof of which is timely filed by the applicable Claims Bar Date; (ii) any Claim that is listed in the Schedules as not contingent, not unliquidated and not disputed, and for which no Proof of Claim has been timely filed; or (iii) any Claim that is allowed pursuant to the Plan; provided, however, that with respect to any Claim described in clauses (i) and (ii) above, such Claim shall be considered Allowed only if and to the extent that no objection to the allowance of such Claim has been filed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court, or such an objection is filed and the Claim shall have been Allowed by a Final Order, and (b) with respect to Interests: (i) any Interest reflected in the Debtors’ books and records; (ii) any Interest in Chemtura Corporation reflected in files maintained by Chemtura Corporation’s stock transfer agent; (iii) any Interest that is allowed pursuant to the Plan; or (iv) any other Interest that has been allowed by a Final Order of the Bankruptcy Court.

18. “Bankruptcy Code” means title 11 of the United States Code, as amended from time to time.

19. “Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York having jurisdiction over the Chapter 11 Cases or any other court having jurisdiction over the Chapter 11 Cases, including, to the extent of the withdrawal of any reference under 28 U.S.C. § 157, the United States District Court for the Southern District of New York.

20. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as applicable to the Chapter 11 Cases, promulgated under section 2075 of title 28 of the United States Code, 28 U.S.C. §§ 1–4001, as well as the general and local rules of the Bankruptcy Court and Case Management Order #2 (Docket No. 351).

21. “Cash” means the legal tender of the United States of America or the equivalent thereof.

 

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22. “Causes of Action” means any action, claim, cause of action, controversy, demand, right, action, Lien, indemnity, guaranty, suit, obligation, liability, damage, judgment, account, defense, offset, power, privilege, license and franchise of any kind or character whatsoever, known, unknown, contingent or non-contingent, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured, assertable directly or derivatively, whether arising before, on, or after the Petition Date, in contract or in tort, in law or in equity or pursuant to any other theory of law. Causes of Action also include: (a) any right of setoff, counterclaim or recoupment and any claim on contracts or for breaches of duties imposed by law or in equity; (b) the right to object to Claims or Interests; (c) any claim pursuant to section 362 or chapter 5 of the Bankruptcy Code; (d) any claim or defense including fraud, mistake, duress and usury and any other defenses set forth in section 558 of the Bankruptcy Code; (e) any state law fraudulent transfer claim; and (f) any claim listed in the Plan Supplement.

23. “Chapter 11 Cases” means (a) when used with reference to a particular Debtor, the chapter 11 case pending for that Debtor under chapter 11 of the Bankruptcy Code in the Bankruptcy Court and (b) when used with reference to all Debtors, the procedurally consolidated chapter 11 cases pending for the Debtors in the Bankruptcy Court under Case No. 09-11233 (REG).

24. “CHCI” means the Non-Debtor Affiliate Chemtura Holding Company, Inc.

25. “CHCI Preferred Stock” means the 500 shares of preferred stock in CHCI, with a face preference value at issuance of $1.1 billion, issued in favor of Great Lakes Chemical Corporation.

26. “Chemtura Canada” means the Non-Debtor Affiliate Chemtura Canada Company/Cie.

27. “Claim” means any claim against a Debtor or, to the extent specifically referenced in the Plan, a Non-Debtor Affiliate, as defined in section 101(5) of the Bankruptcy Code.

28. “Claims Bar Date” means, as applicable, (a) October 30, 2009 or (b) such other period of limitation as may be specifically fixed by an order of the Bankruptcy Court for the filing of certain Claims.

29. “Claims Objection Bar Date” means, for each Claim, the later of (a) the Confirmation Date and (b) such other period of limitation as may be specifically fixed by an order of the Bankruptcy Court for objecting to certain Claims.

30. “Claims Register” means the official register of Claims maintained by the Notice and Claims Agent.

31. “Class” means a category of Claims or Interests as set forth in Article III.

32. “Company” means, collectively, Chemtura Corporation and all of its direct and indirect affiliates and subsidiaries, including Subsidiary Debtors and Non-Debtor Affiliates.

33. “Confirmation” means the entry of the Confirmation Order on the docket of the Chapter 11 Cases.

34. “Confirmation Date” means the date upon which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and 9021.

35. “Confirmation Hearing” means the hearing held by the Bankruptcy Court on Confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code, as such hearing may be continued from time to time.

36. “Confirmation Order” means the order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.

37. “Consummation” means the occurrence of the Effective Date.

 

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38. “Contract Interest Rate Procedures” means certain procedures by which any holder of an Unsecured Claim may substantiate the existence of an existing contract that specifies the payment of interest, in substantially the form approved by the Bankruptcy Court before the Confirmation Hearing.

39. “Corporate Governance Documents” means the New Certificates of Incorporation and the New By-Laws, each of which shall be filed with the Bankruptcy Court in the Plan Supplement.

40. “Creditors’ Committee” means the statutory committee of unsecured creditors of the Debtors appointed in the Chapter 11 Cases pursuant to section 1102 of the Bankruptcy Code by the U.S. Trustee on March 26, 2009, membership of which was reconstituted on August 10, 2009 (Docket Nos. 895 and 897) and as may be further reconstituted from time to time.

41. “Creditors’ Committee Action” means the adversary proceeding [Adv. Case. No. 09-01394] commenced by the Creditors’ Committee against the Prepetition Administrative Agent, as such complaint and the parties thereto may be amended from time to time, seeking, among other things, to avoid certain transfers as preferences and seeking certain declaratory relief related to the Prepetition Secured Lender Claims requiring, among other things, disgorgement of certain payments made to the Prepetition Administrative Agent and unwinding the postpetition refinancing of certain amounts outstanding under the Prepetition Security Agreement.

42. “Cure Claim” means a Claim based upon a monetary default, if any, by any Debtor on an Executory Contract or Unexpired Lease at the time such contract or lease is assumed by such Debtor pursuant to sections 365 or 1123 of the Bankruptcy Code.

43. “D&O Liability Insurance Policies” means all insurance policies of any of the Debtors or Reorganized Debtors for directors’, managers’ and officers’ liability.

44. “Debtor” means one of the Debtors, in its individual capacity as a debtor and debtor in possession in the Chapter 11 Cases.

45. “Debtors” means, collectively: Chemtura Corporation; A&M Cleaning Products, LLC; Aqua Clear Industries, LLC; ASCK, Inc.; ASEPSIS, Inc.; BioLab Company Store, LLC; BioLab Franchise Company, LLC; BioLab, Inc.; BioLab Textile Additives, LLC; CNK Chemical Realty Corporation; Crompton Colors Incorporated; Crompton Holding Corporation; Crompton Monochem, Inc.; GLCC Laurel, LLC; Great Lakes Chemical Corporation; Great Lakes Chemical Global, Inc.; GT Seed Treatment, Inc.; HomeCare Labs, Inc.; ISCI, Inc.; Kem Manufacturing Corporation; Laurel Industries Holdings, Inc.; Monochem, Inc.; Naugatuck Treatment Company; Recreational Water Products, Inc.; Uniroyal Chemical Company Limited (Delaware); Weber City Road LLC; WRL of Indiana, Inc; and, in the event it files a voluntary petition for relief under chapter 11 of the Bankruptcy Code before the Confirmation Date, Chemtura Canada.

46. “Diacetyl Claim Value” means (a) the estimated aggregate liability of the Debtors in respect of Diacetyl Claims as determined by the Bankruptcy Court through an estimation proceeding before the Effective Date minus (b) Insurance Proceeds, if any, available in respect of Diacetyl Claims as of the Effective Date pursuant to (i) a separate settlement or agreement that has been approved by the Bankruptcy Court as of the Effective Date or (ii) a Final Order by the Bankruptcy Court or other court of competent jurisdiction.

47. “Diacetyl Claims” means, collectively, all Claims against any Debtor or any Non-Debtor Affiliate resulting, directly or indirectly, from alleged injury from exposure to diacetyl, acetoin and/or acetaldehyde, including all Claims for indemnification or contribution relating to alleged injury from exposure to diacetyl, acetoin and/or acetaldehyde.

48. “Diacetyl Recovery Ratio” means the Pro Rata share of the Diacetyl Reserve of: (a) each Allowed Insured Deficiency Claim that is a Diacetyl Claim which is also an Insured Claim or (b) each Allowed Diacetyl Claim that is not an Insured Claim; provided, however, that in no event shall the recovery of any holder of an Allowed Diacetyl Claim exceed 100% through any combination of payments under Insurance Policies or distributions pursuant to this Plan.

 

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49. “Diacetyl Reserve” means the reserve to be created by the Debtors to hold a contribution of Cash from Chemtura Corporation and Chemtura Canada in the amount of the Diacetyl Claim Value, which reserve shall be held for the benefit of holders of Allowed Diacetyl Claims for distribution according to the procedures set forth in Article X.

50. “Diacetyl Trust” means a trust that the Debtors may, at their option, establish for the exclusive benefit of the holders of Diacetyl Claims.

51. “DIP Agent” means Citibank, N.A. or its duly appointed successor, in its capacity as administrative agent under the DIP Loan Agreement.

52. “DIP Claims” means any Claim derived from or based upon the DIP Loan Agreement, including the DIP Revolver Claims and the DIP Term Claims.

53. “DIP Lenders” means the banks, financial institutions and other lender parties to the DIP Loan Agreement from time to time, each in their capacity as such.

54. “DIP Loan Agreement” means that certain Amended and Restated Senior Secured Superpriority Debtor-in-Possession Credit Agreement, dated as of February 3, 2010, among Chemtura Corporation, as borrower, each of the other Debtors, as guarantors, the DIP Agent and the DIP Lenders, as well as any other documents entered into in connection therewith.

55. “DIP Revolver Claims” means any Claim derived from or based upon the DIP Revolver Loan under the DIP Loan Agreement.

56. “DIP Revolver Loan” means the superpriority priming revolver loan and letter of credit facility up to an aggregate principal amount of $150 million made available to the Debtors under section 2.01(b) of the DIP Loan Agreement.

57. “DIP Term Claims” means any Claim derived from or based upon the DIP Term Loan under the DIP Loan Agreement.

58. “DIP Term Loan” means the superpriority priming term loan facility in an aggregate principal amount of up to $300 million made available to the Debtors under section 2.01(a) of the DIP Loan Agreement.

59. “Disbursing Agent” means the Reorganized Debtors or the Entity or Entities chosen by the Reorganized Debtors to make or facilitate distributions pursuant to the Plan, including each of the Indenture Trustees.

60. “Disclosure Statement” means the Disclosure Statement for the Joint Chapter 11 Plan of Chemtura Corporation et al., dated June 17, 2010, including all exhibits and schedules thereto and references therein that relate to the Plan that is prepared, approved by order of the Bankruptcy Court and distributed in accordance with such order of approval.

61. “Disputed” means, with respect to any Claim or Interest, any Claim or Interest that is not yet Allowed.

62. “Disputed Claims Reserve” means the reserve to be created by the Debtors to hold a contribution of Cash and New Common Stock, which reserve shall be held for the benefit of holders of subsequently Allowed Claims for distribution according to the procedures set forth in Article VIII.

63. “Distribution Date” means any of the Initial Distribution Date or the Periodic Distribution Dates.

64. “Distribution Record Date” means, except with respect to publicly traded debt securities, the date that the Confirmation Order is entered by the Bankruptcy Court.

 

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65. “DTC” means The Depository Trust Company.

66. “Effective Date” means the first business day after which all provisions, terms and conditions specified in Section 12.3 have been satisfied or waived pursuant to Section 12.5.

67. “Electing Creditors” means the holders of Allowed Claims in the Participating Creditor Classes who, at the time of voting on the Plan, make a binding election to seek to receive the maximum available percentage of their recovery in the form of Cash or the maximum available percentage of their recovery in the form of New Common Stock.

68. “Electing Creditors’ Pool” means the pool of Cash and New Common Stock that otherwise would be distributable to the Electing Creditors.

69. “Emergence Deadline” means October 15, 2010.

70. “Emergence Incentive Plan” means payments on account of (a) any awards earned under the Bankruptcy Court’s Order (A) Approving the Debtors’ Key Employee Incentive Plan and (B) Authorizing the Debtors to Honor Certain Prepetition Bonus Programs (Docket No. 847), as such awards may be modified or implemented with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld, on terms set forth in the Plan Supplement, and (b) any awards earned under the Bankruptcy Court’s Order Approving the Debtors’ 2010 Key Employee Incentive Plan (Docket No. 2707), as such awards may be modified or implemented with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld, on terms set forth in the Plan Supplement.

71. “Entity” has the meaning set forth in section 101(15) of the Bankruptcy Code.

72. “Environmental Claim” means any Claim by a Governmental Unit against Chemtura Corporation or any of the Subsidiary Debtors arising out of, related to or based upon federal or state environmental laws or regulations, environmental orders, consent decrees and other obligations in connection with (a) sites that are not part of the Debtors’ bankruptcy estates, including previously owned or operated sites that are no longer owned or operated by the Debtors and third-party sites that have never been owned or operated by the Debtors to which the Debtors or their predecessors are alleged to have sent waste or other materials and (b) the Debtors’ owned or operated sites solely to the extent that such Claims arise out of, relate to or are based upon costs expended or paid by a Governmental Unit before the Petition Date or penalties owing to a Governmental Unit for violations of environmental laws or regulations that occurred before the Petition Date.

73. “Environmental Reserve” means the reserve to be created by Chemtura Corporation and the Subsidiary Debtors to hold a contribution of Cash from Chemtura Corporation and the Subsidiary Debtors in an amount to be determined by the Bankruptcy Court or agreed to by the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) and the holders of Disputed Environmental Claims, which reserve shall be held for the benefit of holders of Allowed Environmental Claims for distribution according to the procedures set forth in Article IX.

74. “Environmental Trust” means a trust that the Debtors may, at their option, establish for the exclusive benefit of the holders of Environmental Claims.

75. “Equity Committee” means the official committee of equity security holders of the Debtors appointed in the Chapter 11 Cases pursuant to section 1102 of the Bankruptcy Code by the U.S. Trustee on December 29, 2009 (Docket No. 1676), membership of which was reconstituted on January 7, 2010 and January 12, 2010 (Docket Nos. 1718 and 1748) and as may be further reconstituted from time to time.

76. “Estate” means, as to each Debtor, the estate created for the Debtor in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.

 

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77. “Exculpated Claim” means any claim related to any act or omission in connection with, relating to or arising out of the Debtors’ in or out of court restructuring efforts, the Chapter 11 Cases, formulation, preparation, dissemination, negotiation or filing of the Disclosure Statement or the Plan or any contract, instrument, release or other agreement or document created or entered into in connection with the Disclosure Statement or the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Plan securities, or the distribution of property under the Plan or any other related agreement; provided, however, that Exculpated Claims shall not include any act or omission that is determined in a Final Order to have constituted gross negligence, willful misconduct or fraud. For the avoidance of doubt, no Cause of Action, obligation or liability expressly set forth in or preserved by the Plan or the Plan Supplement constitutes an Exculpated Claim.

78. “Exculpated Party” means each of: (a) the Debtors, the Reorganized Debtors and their Affiliates, (b) the Creditors’ Committee and the current and former members thereof, in their capacity as such; (c) the Indenture Trustees in their capacity as such; (d) the Ad Hoc Bondholders’ Committee and the members thereof, in their capacity as such; (e) with respect to each of the foregoing Entities in clauses (a) through (d), such Entities’ subsidiaries, affiliates, members, officers, directors, agents, financial advisors, accountants, investment bankers, consultants, attorneys, employees, partners, affiliates and representatives, in each case only in their capacity as such; and (f) the PBGC and its agents, attorneys and financial advisors.

79. “Exculpation” means the exculpation provision set forth in Section 11.5 hereof.

80. “Executory Contract” means a contract to which one or more of the Debtors is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code.

81. “Exit Credit Facility Agreement” means one or more financing agreements to be executed by the Reorganized Debtors on or before the Effective Date, providing for a senior secured revolving credit facility and, if entered into, a senior secured or unsecured term loan or notes, including any agreements, amendments, supplements or documents related thereto, the substantially final form of which shall be filed as part of the Plan Supplement.

82. “Exit Financing” means, together, (a) a senior secured or unsecured term loan and/or the issuance of senior secured or unsecured notes which, in the aggregate, have a principal amount of $750 million and (b) a senior secured revolver facility up to a principal amount of $250 million entered into pursuant to an Exit Credit Facility Agreement.

83. “Final Order” means, as applicable, an order or judgment of the Bankruptcy Court or other court of competent jurisdiction with respect to the relevant subject matter, which has not been reversed, stayed, modified or amended, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the order or judgment could be appealed or from which certiorari could be sought or the new trial, reargument or rehearing shall have been denied, resulted in no modification of such order or has otherwise been dismissed with prejudice.

84. “General Unsecured Claims” means any Unsecured Claim against any Debtor, unless such Claim is: (a) a 2009 Notes Claim, (b) a 2016 Notes Claim, (c) a 2026 Notes Claim, (d) a Diacetyl Claim, (e) an Environmental Claim, (f) a Prepetition Unsecured Lender Claim, (g) an Unsecured Convenience Claim, (h) an Intercompany Claim (i) an Administrative Claim, (j) a Priority Tax Claim, (k) an Other Priority Claim, (l) a Claim Accrued for Professional Compensation or (m) the portion of any Insured Claim that is not an Insured Deficiency Claim.

85. “Governmental Unit” means any domestic, foreign, provincial, federal, state, local or municipal (a) government, (b) governmental agency, commission, department, bureau, ministry or other governmental entity, (c) natural resource trustee agency or (d) any other governmental unit as defined in section 101(27) of the Bankruptcy Code.

86. “Impaired” means any Claim or Interest in an Impaired Class.

 

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87. “Impaired Class” means a Class that is impaired within the meaning of section 1124 of the Bankruptcy Code. For the avoidance of doubt, Impaired Classes are Class 4a for Chemtura Corporation, Class 4b for each of the applicable Subsidiary Debtors, Classes 5, 6 and 11 for Chemtura Corporation and each of the applicable Subsidiary Debtors, Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation, Classes 8 and 13a for Chemtura Corporation and Class 10 for Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date). For the avoidance of doubt, the only Impaired Class with respect to Chemtura Canada, in the event it becomes a Debtor before the Confirmation Date, will be Class 10.

88. “Incentive Plans” means the Emergence Incentive Plan and the New Incentive Plan.

89. “Indemnification Provision” means each of the indemnification provisions, agreements or obligations currently in place, whether in the bylaws, certificates of incorporation or other formation documents in the case of a limited liability company, board resolutions or employment contracts, for the Debtors and the current and former directors, officers, members (including ex officio members), employees, attorneys, other professionals and agents of the Debtors and such current and former directors, officers and members’ respective Affiliates.

90. “Indemnified Parties” means, collectively, any Debtor and current and former director, officer, member (including ex officio members), employee, attorney, other professional and agent of the Debtors and such current and former directors, officers and members’ respective Affiliates who is the beneficiary of an Indemnification Provision.

91. “Indenture Trustees” means, collectively, the 2009 Notes Indenture Trustee, the 2016 Notes Indenture Trustee and the 2026 Notes Indenture Trustee.

92. “Indentures” means, collectively, the 2009 Notes Indenture, the 2016 Notes Indenture and the 2026 Notes Indenture.

93. “Initial Distribution Date” means the date occurring as soon as reasonably practicable after the Effective Date when distributions under the Plan shall commence.

94. “Insurance Policies” means, collectively, all of the Debtors’ insurance policies.

95. “Insurance Proceeds” the insurance proceeds available to the Debtors or holders of Claims under any of the Insurance Policies.

96. “Insured Claim” means any Claim asserted against a Debtor that is payable or subject to indemnification, in whole or in part, from Insurance Proceeds under one or more of the Insurance Policies.

97. “Insured Deficiency Claim” means the unsecured balance, if any, of an Insured Claim that remains after deducting the amount of Insurance Proceeds available on account of such Insured Claim.

98. “Intercompany Claim” means (a) any Claim held by a Debtor against another Debtor or (b) any Claim held against a Debtor by a Non-Debtor Affiliate that is a direct or indirect subsidiary of Chemtura Corporation.

99. “Interest” means any share of common stock, preferred stock or other instrument evidencing an ownership interest in any of the Debtors, whether or not transferable, and any option, warrant or other right, contractual or otherwise, to acquire any such interest in a Debtor that existed before the Effective Date, any phantom stock or other similar stock unit provided pursuant to the Debtors’ prepetition employee compensation programs and any Claim related to the purchase of interests subject to subordination pursuant to section 510(b) of the Bankruptcy Code.

100. “Interim Compensation Order” means the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals (Docket No. 112).

 

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101. “Lien” has the meaning set forth in section 101(37) of the Bankruptcy Code.

102. “Lien Claim” means any Secured Claim that is not: (a) a DIP Claim or (b) a Prepetition Secured Lender Claim.

103. “Make-Whole Premium” means the claim asserted by certain holders of 2016 Notes and the 2016 Notes Indenture Trustee for obligations, if any, for payment of a make-whole premium or similar damages or prepayment penalties as required in connection with the 2016 Notes Indenture.

104. “Make-Whole Settlement Amount” is $50 million.

105. “New Board” means, with respect to each Reorganized Debtor and New Chemtura, the initial board of directors of such Entity appointed as of the Effective Date, the members of which shall be determined in accordance with Section 5.18.

106. “New By-Laws” means, with respect to each Reorganized Debtor and New Chemtura, the new by-laws of such Entity, the form of which shall be included in the Plan Supplement.

107. “New Certificate of Incorporation” means, with respect to each Reorganized Debtor and New Chemtura, the form of the initial certificate of incorporation of each such Entity, the form of which shall be included in the Plan Supplement.

108. “New Chemtura” means Reorganized Chemtura.

109. “New Chemtura Total Enterprise Value” is $2.05 billion plus, except as otherwise agreed among the Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee in their discretion, total Cash available to satisfy Allowed Unsecured Claims plus the amount of Cash to be retained following the Effective Date (which is expected to be approximately $125 million).

110. “New Common Stock” means a certain number of common shares in the capital of New Chemtura authorized pursuant to the Plan, of which up to 100 million shares shall be initially issued and outstanding pursuant to the Plan as of the Effective Date.

111. “New Employment Agreements” means employment agreements between the Debtors and certain individuals in the Debtors’ senior management, the terms of which shall be included in the Plan Supplement. The individuals and terms are to be agreed to prior to the hearing on the Disclosure Statement.

112. “New Incentive Plan” means the compensation program that will be implemented by the New Board of Chemtura Corporation and will become effective upon the Effective Date, which shall include a stock-based long-term incentive plan and may include other stock-based compensation consistent with the New Employment Agreements that will be adopted and become effective upon the Effective Date as well as a cash-based annual incentive plan consistent with past practice, as to which awards are subject to the approval of the New Board. Certain New Common Stock shall be reserved for issuance under the New Incentive Plan, in addition to shares reserved that may be issued pursuant to the Emergence Incentive Plan, as the Emergence Incentive Plan may be modified, with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld, and which modification shall be disclosed in the Plan Supplement. The terms of the New Incentive Plan shall be included in the Plan Supplement. The reserve number and New Incentive Plan terms are to be agreed to prior to the hearing on the Disclosure Statement.

113. “No-Call Penalty” means the claim asserted by certain holders of 2026 Notes and the 2026 Notes Indenture Trustee for obligations, if any, for payment of damages or prepayment penalties in connection with the 2026 Notes Indenture.

114. “No-Call Settlement Amount” is $20 million.

 

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115. “Non-Debtor Affiliate” means any Entity that is either directly or indirectly a wholly-owned subsidiary of Chemtura Corporation that is not or does not become, before the Confirmation Date, a Debtor in the Chapter 11 Cases.

116. “Non-Qualified Pension Arrangements” means the non-qualified pension and other deferred compensation arrangements pursuant to which the Debtors provided benefits to certain executive officers and former executive officers of the Debtors, predecessor companies and other legacy entities whose liabilities and obligations were assumed by the Debtors either contractually or by law, including through past merger and acquisition activity, before the Petition Date.

117. “Notes” means, collectively, the 2009 Notes, the 2016 Notes and the 2026 Notes.

118. “Notes Claims” means, collectively, the 2009 Notes Claims, the 2016 Notes Claims and the 2026 Notes Claims.

119. “Notice and Claims Agent” means Kurtzman Carson Consultants LLC, located at 2335 Alaska Avenue, El Segundo, California 90245, (866) 967-0678, retained as the Debtors’ notice, claims and solicitation agent.

120. “Ordinary Course Professional Order” means the Order Authorizing the Debtors’ Retention and Compensation of Certain Professionals Utilized in the Ordinary Course of Business (Docket No. 181).

121. “Other Priority Claim” means any Claim accorded priority in right of payment under section 507(a) of the Bankruptcy Code, other than: (a) an Administrative Claim or (b) a Priority Tax Claim.

122. “Participating Creditor Classes” means the Classes of Prepetition Unsecured Lender Claims, Notes Claims and General Unsecured Claims (other than General Unsecured Claims against Chemtura Canada, in the event it becomes a Debtor before the Confirmation Date), the holders of which Claims shall receive distributions from the Unsecured Distribution Pool.

123. “PBGC” means the Pension Benefit Guaranty Corporation.

124. “Periodic Distribution Date” means, unless otherwise ordered by the Bankruptcy Court, the first business day that is 120 days after the Initial Distribution Date, and for the first year thereafter, the first business day that is 120 days after the immediately preceding Periodic Distribution Date. After one year following the Distribution Date, the Periodic Distribution Date will occur on the first business day that is 180 days after the immediately preceding Periodic Distribution Date.

125. “Person” has the meaning set forth in section 101(41) of the Bankruptcy Code.

126. “Petition Date” means March 18, 2009.

127. “Plan” means this Joint Chapter 11 Plan of Chemtura Corporation et al., including the Plan Supplement, which is incorporated herein by reference.

128. “Plan Supplement” means the compilation of documents and forms of documents, schedules and exhibits to the Plan to be filed by the Debtors no later than fourteen days before the Confirmation Hearing or such later date as may be approved by the Bankruptcy Court, and additional documents filed with the Bankruptcy Court before the Effective Date as amendments, modifications or supplements to the Plan Supplement, including the following: (a) to the extent known, the identity of the members of the New Boards of New Chemtura and each of the other Reorganized Debtors, as well as the nature and amount of compensation for any member of a New Board who is an “insider” under section 101(31) of the Bankruptcy Code; (b) a list of Executory Contracts and Unexpired Leases to be assumed, together with the proposed Cure Claim amount for each such contract or lease; (c) a list of retained Causes of Action; (d) the form of the Exit Credit Facility Agreement and any other indenture or similar operative credit document setting forth the terms of the Exit Financing; (e) the Corporate Governance Documents;

 

10


(f) the elected treatment of Intercompany Claims; (g) the terms of the New Incentive Plan and the terms of the New Employment Agreements; (h) the terms of the coverage under any new D&O Liability Insurance Policies, including the policy or policies providing tail coverage; and (i) to the extent the Disbursing Agent includes an Entity or Entities other than the Reorganized Debtors, the identity of such Entity or Entities.

129. “Prepetition Administrative Agent” means Citibank, N.A. and/or its duly appointed successor, as administrative agent under the Prepetition Credit Agreement.

130. “Prepetition Credit Agreement” means the Credit Agreement, dated as of July 1, 2005, among Chemtura Corporation, as borrower, each of the guarantors named therein, the lenders party thereto and the Prepetition Administrative Agent, as amended by the Amended and Restated Credit Agreement, dated as of July 31, 2007, together with any guarantees and other documents entered into in connection therewith including the Prepetition Security Agreement.

131. “Prepetition Lenders” means those lenders party to the Prepetition Credit Agreement from time to time.

132. “Prepetition Secured Lender Claims” means any Claim derived from or based upon the Prepetition Credit Agreement that is Secured by the “collateral,” as such term is defined in section 2 of the Prepetition Security Agreement, including unpaid reasonable, documented and necessary out-of-pocket fees and expenses of the Prepetition Administrative Agent through and including the Effective Date, all to the extent not previously paid by any of the Debtors.

133. “Prepetition Security Agreement” means the Second Amended and Restated Pledge and Security Agreement, dated as of December 30, 2008, among certain of the Debtors, as grantors, and Citibank, N.A., as agent.

134. “Prepetition Unsecured Lender Claims” means any Claim derived from or based upon the Prepetition Credit Agreement other than the Prepetition Secured Lender Claims.

135. “Priority Tax Claim” means any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.

136. “Pro Rata” means, as applicable, the proportion that an Allowed Claim or Interest in a particular Class bears to the aggregate amount of Allowed Claims or Interests in that Class, or the proportion that all Allowed Claims or Interests in a particular Class bear to the aggregate amount of Allowed Claims or Interests in such Class and other Classes entitled to share in the same recovery under the Plan.

137. “Professional” means an Entity: (a) retained pursuant to a Final Order in accordance with sections 327, 363 or 1103 of the Bankruptcy Code and to be compensated for services rendered before or on the Confirmation Date, pursuant to sections 327, 328, 329, 330, 363 and 331 of the Bankruptcy Code or (b) awarded compensation and reimbursement by the Bankruptcy Court pursuant to section 503(b)(4) of the Bankruptcy Code.

138. “Proof of Claim” means a proof of Claim filed against any of the Debtors in the Chapter 11 Cases.

139. “Reinstated” means, with respect to Claims and Interests, the treatment provided for in section 1124 of the Bankruptcy Code.

140. “Rejection Claim” means a Claim arising from the rejection of an Executory Contract or Unexpired Lease pursuant to section 365 of the Bankruptcy Code.

141. “Releasing Parties” means all Entities who have held, hold or may hold Claims or Interests that have been released pursuant to Sections 11.2, 11.3 or 11.4, discharged pursuant to Section 11.6 or are subject to exculpation pursuant to Section 11.5.

 

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142. “Released Party” means each of: (a) the Debtors, New Chemtura and the other Reorganized Debtors; (b) the current and former directors and officers of the Debtors; (c) the Creditors’ Committee and the current and former members thereof, in their capacity as such; (d) the Indenture Trustees; (e) the Ad Hoc Bondholders’ Committee and the current members thereof, in their capacity as such; (f) the DIP Agent; (g) the DIP Lenders; and (h) with respect to each of the foregoing Entities in clauses (a) through (g), such Entities’ subsidiaries, affiliates, members, officers, directors, agents, financial advisors, accountants, investment bankers, consultants, attorneys, employees, partners and representatives, in each case, only in their capacity as such; and (i) the PBGC and its agents, attorneys and financial advisors.

143. “Reorganized” means, with respect to the Debtors, any Debtor or any successor thereto, by merger, consolidation or otherwise, on or after the Effective Date.

144. “Rights” means the rights to subscribe for and acquire on the Effective Date New Common Stock in exchange for $100 million in Cash, with such subscription and acquisition to be at a price consistent with the New Chemtura Total Enterprise Value, and in accordance with the other terms and conditions of the Rights Offering as set forth in the Rights Offering Procedures.

145. “Rights Offering” means the offering of the Rights by the Debtors to the holders of Interests in Class 13a for Chemtura Corporation, to the extent such Class votes to accept the Plan.

146. “Rights Offering Deadline” means 5:00 p.m. (EDT) on the date that is 30 days after the Debtors commence the Rights Offering in accordance with the Rights Offering Procedures.

147. “Rights Offering Procedures” means certain procedures setting forth the terms and conditions of the Rights Offering, in substantially the form annexed hereto as Exhibit 1.

148. “Rights Offering Record Date” means [DATE], 2010.

149. “Schedules” means, collectively, the schedules of assets and liabilities, schedules of Executory Contracts and Unexpired Leases and statements of financial affairs filed by the Debtors pursuant to section 521 of the Bankruptcy Code and in substantial accordance with the Official Bankruptcy Forms.

150. “Secured” means, when referring to a Claim: (a) secured by a Lien on property in which the Estate of the Debtor against which the Claim is asserted has an interest, which Lien is valid, perfected and enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, to the extent of the value of the creditor’s interest in the Estate’s interest in such property as determined pursuant to section 506(a) of the Bankruptcy Code; (b) subject to setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the property subject to setoff; or (c) otherwise Allowed pursuant to the Plan as a Secured Claim.

151. “Shortfall Adjustment” means the reduction to the distributions to certain Classes pursuant to the Plan, in the following order: (a) first, distributions to the holders of 2026 Notes Claims on account of the No-Call Settlement Amount; (b) second, distributions to the holders of 2016 Notes Claims on account of the Make-Whole Settlement Amount; (c) third, on a pro rata basis, postpetition interest payments payable to the General Unsecured Claims against Chemtura Corporation and the 2026 Notes Claims, and (d) fourth, on a pro rata basis, payments payable on account of the General Unsecured Claims against Chemtura Corporation and 2026 Notes Claims.

152. “Shortfall Readjustment” means the increase in the distributions to certain Classes pursuant to the Plan, in the following order: (d) first, on a pro rata basis, payments payable on account of the General Unsecured Claims against Chemtura Corporation and 2026 Notes Claims; (b) second, on a pro rata basis, postpetition interest payments payable to the General Unsecured Claims against Chemtura Corporation and the 2026 Notes Claims; (c) third, distributions to the holders of 2016 Notes Claims on account of the Make-Whole Settlement Amount; and (d) fourth, distributions to the holders of 2026 Notes Claims on account of the No-Call Settlement Amount.

153. “Subsidiary Debtors” means all of the Debtors other than Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date).

 

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154. “Unexpired Lease” means a lease to which one or more of the Debtors is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code.

155. “Unimpaired” means any Claim or Interest that is not designated as Impaired. For the avoidance of doubt, Unimpaired Classes are Classes 1, 2, 3 and 9 for each of the applicable Debtors and Class 4c for Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date).

156. “Unsecured Claims” means any unsecured claim against any Debtor including (a) a General Unsecured Claim, (b) a Prepetition Unsecured Lender Claim, (c) a 2009 Notes Claim, (d) a 2016 Notes Claim, (e) a 2026 Notes Claim, (f) a Diacetyl Claim, (g) an Environmental Claim, (h) an Unsecured Convenience Claim or (i) an Insured Deficiency Claim.

157. “Unsecured Convenience Claims” means any Unsecured Claim against any of the Debtors, except Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date), that, but for being defined as an Unsecured Convenience Claim, would be a General Unsecured Claim, and either (a) is Allowed in an amount of $50,000 or less or (b) is Allowed in an amount greater than $50,000, but is subject to an irrevocable election by the holder thereof to reduce the Allowed amount of the Claim to $50,000 for the purpose of rendering the Claim an Unsecured Convenience Claim.

158. “Unsecured Distribution Pool” means the pool from which distributions shall be made to the Participating Creditor Classes, which pool shall be funded with: (a) available distributable Cash following funding of the Diacetyl Reserve and payment to all holders of Allowed Unsecured Convenience Claims, (b) all proceeds of the Rights Offering, to the extent that Class 13a for Chemtura Corporation votes to accept the Plan and holders of Interests in such Class elect to participate in the Rights Offering and (c) the New Common Stock, subject to reduction solely to the extent that Class 13a for Chemtura Corporation votes to accept the Plan in the amount of the 5% of the New Common Stock made available to holders of Interests in such Class and up to $100 million in value of New Common Stock made available to holders of Interests in such Class in the form of the Rights Offering, and subject to dilution for the Incentive Plans.

159. “U.S. Pension Plans” means the tax-qualified defined benefit pension plans maintained by Chemtura Corporation.

160. “U.S. Trustee” means the United States Trustee for the Southern District of New York.

161. “Waiver Rate” means the interest rate applicable with respect to the Prepetition Credit Agreement as determined pursuant to section 2 of the Waiver and Amendment No. 2 to the Amended and Restated Credit Agreement, dated December 30, 2008, by and among Chemtura Corporation, as borrower, each of the guarantors named therein, the lenders party thereto and the Prepetition Administrative Agent.

 

1.2 Additional Defined Terms

In the event Chemtura Canada becomes a Debtor before the Confirmation Date, the following defined terms shall apply in addition to (or, where applicable, in the stead of) the defined terms set forth in Section 1.1:

1. “Canadian Case” means the recognition proceedings commenced by Chemtura Canada under Part IV of the Companies’ Creditors Arrangement Act in the Canadian Court.

2. “Canadian Confirmation Order” means the order of the Canadian Court, which shall, among other things, order and declare that the Confirmation Order and this Plan, as they relate to Chemtura Canada, are recognized and shall be implemented and effective in Canada in accordance with their terms.

3. “Canadian Court” means the Ontario Superior Court of Justice (Commercial List).

 

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4. “Canadian Recognition Order” means the order of the Canadian Court, which shall, among other things, order and declare that the Chapter 11 Case for Chemtura Canada is recognized and given full force and effect in Canada.

5. “Chemtura Canada” means Chemtura Canada Company/Cie, in its capacity as a Debtor.

 

1.3 Rules of Interpretation

For purposes of this Plan: (a) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and the neuter gender; (b) any reference herein to a contract, lease, instrument, release, indenture or other agreement or document being in a particular form or on particular terms and conditions means that the referenced document shall be substantially in that form or substantially on those terms and conditions; (c) any reference herein to an existing document or exhibit having been filed or to be filed shall mean that document or exhibit, as it may thereafter be amended, modified or supplemented; (d) unless otherwise specified, all references herein to “Articles” are references to Articles hereof or hereto; (e) unless otherwise stated, the words “herein,” “hereof” and “hereto” refer to the Plan in its entirety rather than to a particular portion of the Plan; (f) captions and headings to Articles are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation hereof; (g) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; and (h) any immaterial effectuating provisions may be interpreted by the Reorganized Debtors in a manner that is consistent with the overall purpose and intent of the Plan all without further Bankruptcy Court order.

 

1.4 Computation of Time

The provisions of Bankruptcy Rule 9006(a) shall apply in computing any period of time prescribed or allowed herein.

 

1.5 Governing Law

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated, the laws of the State of New York, without giving effect to the principles of conflict of laws, shall govern the rights, obligations, construction and implementation of the Plan, any agreements, documents, instruments or contracts executed or entered into in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control); provided, however, that corporate governance matters relating to the Debtors or the Reorganized Debtors, as applicable, not incorporated in New York shall be governed by the laws of the jurisdiction of incorporation of the applicable Debtor or Reorganized Debtor, as applicable.

 

1.6 Reference to Monetary Figures

All references in the Plan to monetary figures shall refer to currency of the United States of America, unless otherwise expressly provided.

 

1.7 Reference to the Debtors or the Reorganized Debtors

Except as otherwise specifically provided in the Plan to the contrary, references in the Plan to the Debtors or to the Reorganized Debtors shall mean the Debtors and the Reorganized Debtors, as applicable, to the extent the context requires.

 

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ARTICLE II

ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS, DIP CLAIMS AND STATUTORY FEES

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Priority Tax Claims and DIP Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests set forth in Article III and shall receive the following treatment:

 

2.1 Administrative Claims

 

  (a) Administrative Claims

Except with respect to Administrative Claims that are Claims for Accrued Professional Compensation and except to the extent that a holder of an Allowed Administrative Claim and the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) or Reorganized Debtor agrees to less favorable treatment to such holder, each holder of an Allowed Administrative Claim shall be paid in full, in Cash, on the later of: (a) the Initial Distribution Date; (b) the first date such Administrative Claim is Allowed or as soon as reasonable practicable thereafter; and (c) the date such Allowed Administrative Claim becomes due and payable by its terms, or as soon thereafter as is practicable.

 

  (b) Professional Compensation

 

  (i) Claims for Accrued Professional Compensation

Professionals or other Entities asserting a Claim for Accrued Professional Compensation for services rendered before the Effective Date must file and serve on the Debtors and such other Entities who are designated by the Bankruptcy Rules, the Confirmation Order, the Interim Compensation Order or other order of the Bankruptcy Court an application for final allowance of such Claim for Accrued Professional Compensation no later than 45 days after the Effective Date; provided that the Reorganized Debtors may pay retained Professionals or other Entities in the ordinary course of business after the Effective Date without the need to file a final fee application. Objections to any Claim for Accrued Professional Compensation must be filed and served on the Reorganized Debtors, the Creditors’ Committee, the U.S. Trustee and the requesting party no later than 75 days after the Effective Date.

 

  (ii) Post- Effective Date Fees and Expenses

Upon the Effective Date, any requirement that Professionals comply with sections 327 through 331 and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Reorganized Debtors may employ and pay any Professional for services rendered or expenses incurred after the Effective Date in the ordinary course of business, including fees and expenses for the Creditors’ Committee’s Professionals for services rendered post-Effective Date as contemplated by the Plan, if any, without any further notice to any party or action, order or approval of the Bankruptcy Court.

 

  (c) Administrative Claim Bar Date

Except as otherwise provided in this Section 2.1, requests for payment of Administrative Claims must be filed and served on the Reorganized Debtors pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order no later than 60 days after the Effective Date. Holders of Administrative Claims that are required to, but do not, file and serve a request for payment of such Administrative Claims by such date shall be forever barred, estopped and enjoined from asserting such Administrative Claims against the Debtors or Reorganized Debtors or their property and such Administrative Claims shall be deemed discharged as of the Effective Date. Objections to such requests, if any, must be filed and served on the Reorganized Debtors and the requesting party no later than 90 days after the Effective Date. Notwithstanding the foregoing, no request for payment of an Administrative Claim need be filed with respect to an Administrative Claim previously Allowed by Final Order, including all Administrative Claims expressly Allowed under this Plan.

 

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2.2 Priority Tax Claims

Each holder of an Allowed Priority Tax Claim due and payable on or before the Effective Date shall receive, on the Distribution Date, at the option of the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld), one of the following treatments: (1) Cash in an amount equal to the amount of such Allowed Priority Tax Claim; (2) Cash in an aggregate amount of such Allowed Priority Tax Claim payable in installment payments over a period of time not to exceed five years after the Petition Date, pursuant to section 1129(a)(9)(C) of the Bankruptcy Code; or (3) such other treatment as may be agreed upon by such holder and the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) or otherwise determined upon an order of the Bankruptcy Court.

 

2.3 DIP Claims

 

  (a) DIP Revolver Claims

The DIP Revolver Claims shall be Allowed and deemed to be Allowed Claims in the full amount due and owing under the DIP Revolver Loan, including principal, interest, reasonable fees, reasonable expenses and issued, outstanding and undrawn letters of credit, in each case to the extent required to be paid under the terms of the DIP Loan Agreement. Holders of DIP Revolver Claims will receive, on or as soon as practicable after the Initial Distribution Date, as indefeasible payment in full and final satisfaction of the DIP Revolver Claims, Cash in the full Allowed amount of their Claims, provided, however, that any DIP Revolver Claims representing unfunded letters of credit shall be deemed fully satisfied without any payment in Cash upon such letters of credit being replaced by new letters of credit issued under the Exit Financing.

 

  (b) DIP Term Claims

The DIP Term Claims shall be Allowed and deemed to be Allowed Claims in the amount of $300 million, plus contingent and unliquidated claims arising under the DIP Refinancing Facility. Holders of DIP Term Claims will receive, on or as soon as practicable after the Initial Distribution Date, as indefeasible payment in full and final satisfaction of the DIP Term Claims, Cash in the full Allowed amount of their Claims.

 

2.4 Statutory Fees

The Debtors shall pay in full, in Cash, any fees due and owing to the U.S. Trustee, including quarterly fees payable under 28 U.S.C. §1930(a)(6), plus interest due and payable under 31 U.S.C. § 3717 (if any), on all disbursements, including Plan payments and disbursements in and outside the ordinary course of the Debtors’ business at the time of Confirmation. On and after the Effective Date, the Reorganized Debtors shall pay the applicable U.S. Trustee fees for each of the Reorganized Debtors when due in the ordinary course until such time as the Bankruptcy Court enters a final decree in such Reorganized Debtor’s Chapter 11 Case.

 

2.5 Administrative Claims, Priority Tax Claims and DIP Claims Against Chemtura Canada

This Plan constitutes a pre-arranged Plan for Chemtura Canada in the event it becomes a Debtor before the Confirmation Date. For the avoidance of doubt, in the event Chemtura Canada becomes a Debtor before the Confirmation Date, each holder of an Administrative Claim, Priority Tax Claim or DIP Claim against Chemtura Canada (to the extent there are any such Claims against Chemtura Canada) shall receive the same treatment as the treatment for holders of Administrative Claims, Priority Tax Claims and DIP Claims, respectively, as set forth in this Article II.

 

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ARTICLE III

CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

 

3.1 Classification of Claims and Interests

Pursuant to section 1122 of the Bankruptcy Code, set forth below is a designation of Classes of Claims and Interests. A Claim or Interest is placed in a particular Class for the purposes of voting on the Plan and receiving distributions pursuant to the Plan only to the extent that such Claim or Interest has not been paid, released, withdrawn or otherwise settled before the Effective Date.

 

3.2 Summary of Classification

This Plan constitutes a separate chapter 11 plan of reorganization for each Debtor, each of which shall include the classifications set forth below (and described in more detail in Section 3.3 below), except that Class 7 shall be applicable only to Chemtura Corporation and Great Lakes Chemical Corporation, Class 8 shall be applicable only to Chemtura Corporation and Class 10 shall be applicable only to Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date). For the avoidance of doubt, to the extent a Class contains Allowed Claims or Interests with respect to a particular Debtor, such Class is designated with respect to such Debtor. To the extent there are no Allowed Claims or Interests with respect to a particular Debtor, such Class is deemed to be omitted with respect to such Debtor.

The following chart represents the general classification of Claims and Interests for each Debtor pursuant to the Plan:

 

Class

  

Claim

  

Status

  

Voting Rights

1    Prepetition Secured Lender Claims    Unimpaired    Permitted to Vote on a Provisional Basis1
2    Lien Claims    Unimpaired    Deemed to Accept
3    Other Priority Claims    Unimpaired    Deemed to Accept
4a    General Unsecured Claims Against Chemtura Corporation    Impaired    Entitled to Vote
4b    General Unsecured Claims Against the Subsidiary Debtors    Impaired    Entitled to Vote
4c    General Unsecured Claims Against Chemtura Canada    Unimpaired    Deemed to Accept
5    Prepetition Unsecured Lender Claims    Impaired    Entitled to Vote
6    2016 Notes Claims    Impaired    Entitled to Vote
7    2009 Notes Claims    Impaired    Entitled to Vote
8    2026 Notes Claims    Impaired    Entitled to Vote
9    Unsecured Convenience Claims    Unimpaired    Deemed to Accept
10    Diacetyl Claims    Impaired    Entitled to Vote
11    Environmental Claims    Impaired    Entitled to Vote
12    Intercompany Claims    Impaired    Deemed to Accept
13a    Interests in Chemtura Corporation    Impaired    Entitled to Vote
13b    Interests in the Subsidiary Debtors and Chemtura Canada    Unimpaired / Impaired    Deemed to Accept

 

1

Although the Debtors believe that Class 1 holders of Prepetition Secured Lender Claims are Unimpaired by the terms of the Plan and therefore are deemed to accept the Plan pursuant to 1126(f) of the Bankruptcy Code, such Class shall be permitted to vote to accept or reject the Plan on a provisional basis. The Debtors, the Creditors’ Committee, the Ad Hoc Bondholders’ Committee and the Prepetition Administrative Agent reserve all rights with respect to whether holders of Class 1 Prepetition Secured Lender Claims are in fact Unimpaired by the terms of the Plan.

 

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3.3 Treatment of Claims and Interests

To the extent a Class contains Allowed Claims or Interests with respect to any Debtor, the classification of Allowed Claims and Interests is specified below.

 

  (a) Treatment of Class 1 - Prepetition Secured Lender Claims.

 

  (i) Allowance: The Prepetition Secured Lender Claims against Chemtura Corporation and each of the Subsidiary Debtors shall be Allowed in the amount of $52.7 million less any amounts attributable to letters of credit that expire undrawn before the Effective Date, plus unpaid postpetition interest, if any, at the Waiver Rate and unpaid reasonable, documented and necessary out-of-pocket fees and expenses of the Prepetition Administrative Agent through and including the Effective Date. Holders of Class 1 Prepetition Secured Lender Claims are not entitled to and will not receive default interest in addition to interest at the Waiver Rate.

 

  (ii) Treatment: Each holder of a Prepetition Secured Lender Claim will receive, on the Effective Date, in full and final satisfaction of its Prepetition Secured Lender Claim, payment in full in Cash.

 

  (iii) Voting: Class 1 for Chemtura Corporation and each of the Subsidiary Debtors is Unimpaired; however, holders of Class 1 Prepetition Secured Lenders Claims shall be permitted to vote to accept or reject the Plan on a provisional basis. The Debtors, the Creditors’ Committee, the Ad Hoc Bondholders’ Committee and the Prepetition Administrative Agent reserve all rights with respect to whether holders of Class 1 Prepetition Secured Lender Claims are in fact Unimpaired by the terms of the Plan.

 

  (b) Treatment of Class 2 - Lien Claims.

 

  (i) Treatment: On or as soon as practicable after the Initial Distribution Date, each holder of an Allowed Claim in Class 2 for each of the applicable Debtors, in full and final satisfaction of its Secured Claim, shall receive one of the following treatments at the option of the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld):

 

  A. payment of the Allowed Claim in full in Cash on the later of the Initial Distribution Date or as soon as practicable after a particular Claim becomes Allowed and, to the extent such allowed Lien Claim is oversecured, interest as applicable pursuant to Section 3.3(n)(i) from and after the later of the date such Lien Claim (I) became due in the ordinary course of business or (II) was invoiced to the applicable Debtor;

 

  B. such other treatment as may be agreed to by the applicable Debtor and the holder; or

 

  C. the holder shall retain its Lien on such property and be Reinstated.

 

  (ii) Voting: Class 2 for each of the applicable Debtors is Unimpaired, and holders of Class 2 Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, holders of Class 2 Lien Claims are not entitled to vote to accept or reject the Plan.

 

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  (c) Treatment of Class 3 - Other Priority Claims.

 

  (i) Treatment: Each holder of an Allowed Claim in Class 3 for each of the applicable Debtors shall receive, on or as soon as reasonably practicable after the Initial Distribution Date, in full and final satisfaction of its Claim, one of the following treatments on account of such Claim, determined at the option of the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld):

 

  A. payment of the Allowed Claim in full in Cash, plus interest as applicable pursuant to Section 3.3(n)(i), on the later of the Initial Distribution Date or as soon as practicable after such claim becomes Allowed or

 

  B. such other treatment as may be agreed to by the applicable Debtor.

 

  (ii) Voting: Class 3 for each of the applicable Debtors is Unimpaired, and holders of Class 3 Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, holders of Class 3 Other Priority Claims are not entitled to vote to accept or reject the Plan.

 

  (d) Treatment of Class 4 - General Unsecured Claims.

 

  (i) Treatment of Class 4a for Chemtura Corporation: Each holder of an Allowed Claim in Class 4a for Chemtura Corporation, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date: (A) shall receive its Pro Rata share (determined with respect to all Claims in Class 4a for Chemtura Corporation and all Claims in Class 8) of the Cash and New Common Stock available in the Unsecured Distribution Pool following payment in full of (or appropriate funding of the Disputed Claims Reserve for) all Claims in Classes 4, 5, 6 and 7 for each of the Subsidiary Debtors, with the distribution of New Common Stock subject to dilution for the Incentive Plans, up to the full amount of its Allowed Claim, plus postpetition interest as applicable pursuant to Section 3.3(n)(i); or (B) will be Reinstated, unless the holder and Chemtura Corporation (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) otherwise agree to a different treatment. Each payment of Cash and New Common Stock shall have an aggregate value equal to the full amount of such holder’s Allowed Claim plus postpetition interest, as applicable, in each case, subject to the applicable Shortfall Adjustment, if any, or the applicable Shortfall Readjustment, if any.

To the extent that insufficient value is available in the Unsecured Distribution Pool to pay all holders of Allowed Claims in Class 4a for Chemtura Corporation, in full, plus postpetition interest as applicable pursuant to Section 3.3(n)(i), each holder shall be entitled to payment pursuant to Section 8.5 of its Pro Rata share (determined with respect to all Claims in Class 4a for Chemtura Corporation and in Class 8), in accordance with the Shortfall Adjustment and Shortfall Readjustment, if any, of the excess amounts of Cash and New Common Stock, if any, held in the Disputed Claims Reserve, Diacetyl Reserve and Environmental Reserve following liquidation of all Disputed Claims, Diacetyl Claims and Environmental Claims and payment of all formerly Disputed Claims that have become Allowed.

 

  (ii)

Treatment of Class 4b for each of the applicable Subsidiary Debtors: Each holder of an Allowed Claim in Class 4b for each of the applicable Subsidiary Debtors, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date: (A) shall receive payment from the Cash and New Common Stock available in the Unsecured Distribution Pool, with the distribution of New Common Stock subject to dilution for the Incentive Plans, in the full amount of its Allowed Claim,

 

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plus postpetition interest as applicable pursuant to Section 3.3(n)(i); or (B) will be Reinstated, unless the holder and the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) otherwise agree to a different treatment.

 

  (iii) Treatment of Class 4c for Chemtura Canada: Each holder of a Claim in Class 4c for Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) shall, unless the holder of such Claim and Chemtura Canada (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) otherwise agree to a different treatment, and unless otherwise satisfied pursuant to an order of the Bankruptcy Court before the Initial Distribution Date, be paid in full, in Cash, on the later of: (A) the Initial Distribution Date; (B) the first date such Claim is Allowed or as soon as reasonable practicable thereafter; and (C) the date such Allowed Claim becomes due and payable by its terms, or as soon thereafter as is practicable.

 

  (iv) Voting for Class 4a for Chemtura Corporation: Class 4a for Chemtura Corporation is Impaired. Therefore, holders of Class 4a General Unsecured Claims are entitled to vote to accept or reject the Plan.

 

  (v) Voting for Class 4b for each of the applicable Subsidiary Debtors: Class 4b for each of the applicable Subsidiary Debtors is Impaired. Therefore, holders of Class 4b General Unsecured Claims are entitled to vote to accept or reject the Plan.

 

  (vi) Voting for Class 4c for Chemtura Canada: Class 4c for Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) is Unimpaired, and holders of Class 4c Claims against Chemtura Canada are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, holders of Class 4c General Unsecured Claims against Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are not entitled to vote to accept or reject the Plan.

 

  (vii) Election for Class 4a for Chemtura Corporation and for Class 4b for each of the applicable Subsidiary Debtors: Each holder of an Allowed Claim in Class 4a for Chemtura Corporation and Class 4b for each of the applicable Subsidiary Debtors shall have the right to make a binding election to seek to receive its recovery in the form of the maximum available percentage of Cash or the maximum available percentage of New Common Stock, to the extent such recovery is available from the Electing Creditors’ Pool, as described in Section 5.9.

 

  (e) Treatment of Class 5 - Prepetition Unsecured Lender Claims.

 

  (i) Allowance: The Prepetition Unsecured Lender Claims against Chemtura Corporation and each of the Subsidiary Debtors shall be Allowed in the amount of $118.1 million less any amounts attributable to letters of credit that expire undrawn before the Effective Date, plus unpaid postpetition interest, if any, at the Waiver Rate. Holders of Class 5 Prepetition Unsecured Lender Claims are not entitled to and will not receive default interest in addition to interest at the Waiver Rate.

 

  (ii) Treatment: Each holder of an Allowed Claim in Class 5 for Chemtura Corporation and each of the Subsidiary Debtors, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date shall receive payment from the Cash and New Common Stock available in the Unsecured Distribution Pool, with the distribution of New Common Stock subject to dilution for the Incentive Plans, in the full amount of its Allowed Claim, plus postpetition interest as applicable pursuant to Section 3.3(n)(i), provided, however, that any Prepetition Unsecured Lender Claims representing unfunded letters of credit shall be deemed fully satisfied without any payment in the form of Cash or New Common Stock upon such letters of credit being replaced by new letters of credit issued under the Exit Financing.

 

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  (iii) Election: Each holder of an Allowed Claim in Class 5 shall have the right to make a binding election to seek to receive its recovery in the form of the maximum available percentage of Cash or the maximum available percentage of New Common Stock, to the extent such recovery is available from the Electing Creditors’ Pool, as described in Section 5.9.

 

  (iv) Voting: Class 5 for Chemtura Corporation and each of the Subsidiary Debtors is Impaired. Therefore, holders of Class 5 Prepetition Unsecured Lender Claims are entitled to vote to accept or reject the Plan.

 

  (f) Treatment of Class 6 - 2016 Notes Claims.

 

  (i) Allowance: The 2016 Notes Claims against Chemtura Corporation and each of the Subsidiary Debtors shall be Allowed in the amount of $508,263,159 on account of principal and prepetition interest, plus postpetition interest at the contract rate, including amortization of original issue discount, as provided in the 2016 Notes Indenture, plus the Make-Whole Settlement Amount of $50 million, provided, however, that interest shall not apply to or accrue on the Make-Whole Settlement Amount.

 

  (ii) Treatment: Each holder of an Allowed Claim in Class 6 for Chemtura Corporation and each of the Subsidiary Debtors, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date shall receive payment from the Cash and New Common Stock available in the Unsecured Distribution Pool, with the distribution of New Common Stock subject to dilution for the Incentive Plans, in the amount of its Allowed Claim, plus postpetition interest as applicable pursuant to Section 3.3(n)(i), with such payment of Cash and New Common Stock having an aggregate value equal to the full amount of such holder’s Allowed Claim plus postpetition interest, as applicable, in each case, subject to the applicable Shortfall Adjustment, if any, or the applicable Shortfall Readjustment, if any.

 

  (iii) Election: Each holder of an Allowed Claim in Class 6 shall have the right to make a binding election to seek to receive its recovery in the form of the maximum available Cash or the maximum available New Common Stock, to the extent such recovery is available from the Electing Creditors’ Pool, as described in Section 5.9.

 

  (iv) Voting: Class 6 for Chemtura Corporation and each of the Subsidiary Debtors is Impaired. Therefore, holders of Class 6 2016 Notes Claims are entitled to vote to accept or reject the Plan.

 

  (g) Treatment of Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation - 2009 Notes Claims.

 

  (i) Allowance: The 2009 Notes Claims against Chemtura Corporation and Great Lakes Chemical Corporation shall be Allowed in the amount of $374,508,524 on account of principal and pre petition interest, plus all postpetition interest at the contract rate as provided in the 2009 Notes Indenture, and, for the avoidance of doubt, the amount of any original issue discount amortized post petition, which is estimated in the amount of $23,976 as of July 15, 2009.

 

  (ii)

Treatment: Each holder of an Allowed Claim in Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date shall receive payment

 

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from the Cash and New Common Stock available in the Unsecured Distribution Pool, with the distribution of New Common Stock subject to dilution for the Incentive Plans, in the full amount of its Allowed Claim, plus postpetition interest as applicable pursuant to Section 3.3(n)(i).

 

  (iii) Election: Each holder of an Allowed Claim in Class 7 shall have the right to make a binding election to seek to receive its recovery in the form of the maximum available Cash or the maximum available New Common Stock, to the extent such recovery is available from the Electing Creditors’ Pool, as described in Section 5.9.

 

  (iv) Voting: Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation is Impaired. Therefore, holders of Class 7 2009 Notes Claims are entitled to vote to accept or reject the Plan.

 

  (h) Treatment of Class 8 for Chemtura Corporation - 2026 Notes Claims.

 

  (i) Allowance: Allowance: The 2026 Notes Claims against Chemtura Corporation shall be Allowed in the amount of $151,253,447 on account of principal and prepetition interest, plus postpetition interest at the contract rate, including amortization of original issue discount, as provided in the 2026 Notes Indenture, plus the No-Call Settlement Amount of $20 million, provided, however, that interest shall not apply to or accrue on the No-Call Settlement Amount.

 

  (ii) Treatment: Each holder of an Allowed Claim in Class 8 for Chemtura Corporation, in full and final satisfaction of its Claim, on or as soon as reasonably practicable after the Initial Distribution Date shall receive its Pro Rata share (determined with respect to all Claims in Class 4a for Chemtura Corporation and all Claims in Class 8) of the Cash and New Common Stock available in the Unsecured Distribution Pool following payment in full of (or appropriate funding of the Disputed Claims Reserve for) all Claims in Classes 4, 5, 6 and 7 for each of the Subsidiary Debtors, with the distribution of New Common Stock subject to dilution for the Incentive Plans, in the amount of its Allowed Claim, plus postpetition interest as applicable pursuant to Section 3.3(n)(i), with such payment of Cash and New Common Stock having an aggregate value equal to the full amount of such holder’s Allowed Claim plus postpetition interest, as applicable, in each case, subject to the applicable Shortfall Adjustment, if any, or the applicable Shortfall Readjustment, if any.

To the extent that insufficient value is available in the Unsecured Distribution Pool to pay all holders of Allowed Claims in Class 8, in full, plus postpetition interest as applicable pursuant to Section 3.3(n)(i), each holder shall be entitled to payment pursuant to Section 8.5 of its Pro Rata share (determined with respect to all Claims in Class 4a for Chemtura Corporation and in Class 8), in accordance with the Shortfall Adjustment and Shortfall Readjustment, if any, of the excess amounts of Cash and New Common Stock, if any, held in the Disputed Claims Reserve, Diacetyl Reserve and Environmental Reserve following liquidation of all Disputed Claims, Diacetyl Claims and Environmental Claims and payment of all formerly Disputed Claims that have become Allowed.

 

  (iii) Election: Each holder of an Allowed Claim in Class 8 shall have the right to make a binding election to seek to receive its recovery in the form of the maximum available Cash or the maximum available New Common Stock, to the extent such recovery is available from the Electing Creditors’ Pool, as described in Section 5.9.

 

  (iv) Voting: Class 8 for Chemtura Corporation is Impaired. Therefore, holders of Class 8 2026 Notes Claims are entitled to vote to accept or reject the Plan.

 

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  (i) Treatment of Class 9 - Unsecured Convenience Claims.

 

  (i) Treatment: Each holder of an Allowed Unsecured Convenience Claim in Class 9 for Chemtura Corporation and each of the applicable Subsidiary Debtors shall receive, in full and final satisfaction of such Unsecured Convenience Claim, Cash in the amount of its Allowed Unsecured Convenience Claim, plus interest as applicable pursuant to Section 3.3(n)(i).

 

  (ii) Voting: Class 9 for Chemtura Corporation and each of the applicable Subsidiary Debtors is Unimpaired and holders of Class 9 Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, holders of Class 9 Unsecured Convenience Claims are not entitled to vote to accept or reject the Plan.

 

  (j) Treatment of Class 10 for Chemtura Corporation and Chemtura Canada - Diacetyl Claims.

 

  (i) Treatment: Each holder of an Allowed Diacetyl Claim in Class 10 for Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) shall receive, in full and final satisfaction of such holder’s Allowed Diacetyl Claim: (A) payment in Cash on the Effective Date pursuant to a negotiated settlement pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and as approved by order of the Bankruptcy Court or (B) to the extent an Allowed Diacetyl Claim is not subject to a negotiated settlement as of the Effective Date, a distribution from the Diacetyl Reserve in accordance with the procedures set forth in Article X (I) if such Allowed Diacetyl Claim is an Insured Claim, in the amount of such holder’s Allowed Insured Deficiency Claim multiplied by the Diacetyl Recovery Ratio, or (II) if such Allowed Diacetyl Claim is not an Insured Claim, in the amount of such holder’s Allowed Diacetyl Claim multiplied by the Diacetyl Recovery Ratio.

 

  (ii) Voting: Class 10 for Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) is Impaired. Therefore, holders of Class 10 Diacetyl Claims are entitled to vote to accept or reject the Plan.

 

  (k) Treatment of Class 11 - Environmental Claims.

 

  (i) Treatment: Each holder of an Allowed Environmental Claim in Class 11 for Chemtura Corporation and each of the applicable Subsidiary Debtors shall receive one of the following treatments at the option of the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld): (A) payment in Cash on the Effective Date or such other treatment as agreed pursuant to a negotiated settlement pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and as approved by order of the Bankruptcy Court, (B) to the extent an Allowed Environmental Claim is not subject to a negotiated settlement as of the Effective Date, a distribution from the Environmental Reserve in Cash in accordance with the procedures set forth in Article IX, in the amount of such holder’s Allowed Environmental Claim or (C) the holder will retain its Environmental Claim, which will be Reinstated.

 

  (ii) Voting: Class 11 for Chemtura Corporation and each of the applicable Subsidiary Debtors is Impaired. Therefore, holders of Class 11 Environmental Claims are entitled to vote to accept or reject the Plan.

 

  (l) Treatment of Class 12 - Intercompany Claims.

 

  (i)

Treatment: At the election of the applicable Debtor (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be

 

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unreasonably withheld), Intercompany Claims shall (A) be Reinstated, (B) remain in place subject to certain revised documentation, (C) be modified or cancelled as of the Effective Date, (D) include Cash payments to address the treatment of certain foreign pension obligations of the Company and/or (E) with respect to certain Intercompany Claims in respect of goods, services, interest and other amounts that would have been satisfied in Cash directly or indirectly in the ordinary course of business had they not been outstanding as of the Petition Date, may be settled in Cash in an amount not to exceed $25 million. The Plan Supplement shall set forth the applicable Debtor’s election with respect to the treatment of each Intercompany Claim.

 

  (ii) Voting: Class 12 for each of the applicable Debtors is Impaired. Holders of Class 12 Intercompany Claims are deemed to accept the Plan.

 

  (m) Treatment of Class 13 - Interests.

 

  (i) Treatment of Class 13a for Chemtura Corporation: On and after the Effective Date, all Class 13a Interests in Chemtura Corporation shall be cancelled and shall be of no further force and effect, whether surrendered for cancellation or otherwise, and each holder of an Interest shall receive, in full and final satisfaction of such Interest, on the Effective Date, one of the following treatments:

 

  A. to the extent that Class 13a for Chemtura Corporation votes to accept the Plan, on or as soon as practicable after the Effective Date, each holder of a share of prepetition common stock or equivalent Interest in Chemtura Corporation shall receive its Pro Rata share (determined with respect to all holders of Interests in Class 13a) of 5% of the New Common Stock, subject to dilution for the New Incentive Plan, and its Pro Rata share of the Rights to participate in the Rights Offering; and

 

  B. to the extent that Class 13a for Chemtura Corporation votes to reject the Plan, each holder of an Interest shall receive its Pro Rata share (determined with respect to all holders of Interests in Class 13a) of value available for distribution after all Allowed Unsecured Claims have been paid in full in accordance with the terms of this Plan and the Disputed Claims Reserve, Diacetyl Reserve and Environmental Reserve have been established in accordance with the terms of this Plan.

 

  (ii) Treatment of Class 13b for the applicable Subsidiary Debtors and Chemtura Canada: At the option of the Debtors, with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld, on the Effective Date, all Class 13b Interests in the applicable Subsidiary Debtors and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) shall remain outstanding, shall be cancelled or shall be transferred pursuant to the Plan, including as set forth in Section 5.22.

 

  (iii) Voting for Class 13a for Chemtura Corporation: Class 13a for Chemtura Corporation is Impaired. Therefore, holders of Class 13a Interests in Chemtura Corporation are entitled to vote to accept or reject the Plan.

 

  (iv) Voting for Class 13b for the applicable Subsidiary Debtors and Chemtura Canada: Class 13b for each of the applicable Subsidiary Debtors and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) is Unimpaired or Impaired, and holders of Class 13b Subsidiary Debtor and Chemtura Canada Interests are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, holders of Interests in Class 13b for each of the applicable Subsidiary Debtors and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are not entitled to vote to accept or reject the Plan.

 

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  (n) Treatment Provisions Applicable to All Classes of Unsecured Claims and Interests.

 

  (i) Payment of Interest: To the extent that the Plan provides for payment of interest to holders of Allowed Unsecured Claim, such interest shall be paid in the same form of consideration as the underlying Allowed Unsecured Claim, and the amount of Allowed interest shall be calculated between the later of the date such Allowed Claim (A) became due in the ordinary course of business or (B) was invoiced to the applicable Debtor, on the one hand, and the Effective Date, on the other hand, with such interest to be payable (except as expressly specified herein) at the federal judgment rate as of the Petition Date or at the contract rate to the extent allowable under applicable law in accordance with the Contract Interest Rate Procedures. For the avoidance of doubt, to the extent interest is payable on a particular Allowed Claim in accordance with the foregoing, the amount of such Allowed Claim shall be increased to include interest.

 

  (ii) Distribution from the Disputed Claims Reserve, Diacetyl Reserve and Environmental Reserve: To the extent excess Cash or New Common Stock remains in the Disputed Claims Reserve, Diacetyl Reserve or Environmental Reserve following the resolution of all Disputed Claims, Diacetyl Claims and Environmental Claims, such excess Cash or New Common Stock shall be distributed among Claims and Interests as and to the extent provided in Section 8.5.

 

3.4 Treatment of Claims Against and Interests in Chemtura Canada

This Plan constitutes a pre-arranged Plan for Chemtura Canada in the event it becomes a Debtor before the Confirmation Date. For the avoidance of doubt, in the event Chemtura Canada becomes a Debtor before the Confirmation Date: (a) each holder of a Lien Claim, Other Priority Claim or Intercompany Claim against Chemtura Canada shall receive the same treatment as the treatment for holders of all other Lien Claims, Other Priority Claims and Intercompany Claims, respectively, as set forth in this Article III, (b) each holder of a General Unsecured Claim against Chemtura Canada shall receive the treatment as set forth in Section 3.3(d)(iii), (c) each holder of a Diacetyl Claim against Chemtura Canada shall receive the treatment as set forth in Section 3.3(j) and (d) each holder of an Interest in Chemtura Canada shall receive the same treatment as the treatment for holders of Interests in Subsidiary Debtors as set forth in Section 3.3(m)(ii).

ARTICLE IV

ACCEPTANCE REQUIREMENTS

 

4.1 Acceptance or Rejection of the Plan

 

  (a) Voting Class

Class 4a for Chemtura Corporation and Class 4b for each of the applicable Subsidiary Debtors, Classes 5, 6 and 11 for Chemtura Corporation and each of the applicable Subsidiary Debtors, Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation, Classes 8 and 13a for Chemtura Corporation and Class 10 for Chemtura Corporation and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are Impaired under the Plan and are, therefore, entitled to vote to accept or reject the Plan.

 

  (b) Presumed Acceptance of the Plan

Classes 1 and 9 for Chemtura Corporation and each of the applicable Subsidiary Debtors, Classes 2 and 3 for each of the applicable Debtors and Class 4c for Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are Unimpaired under the Plan and are, therefore, conclusively presumed to have accepted the

 

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Plan pursuant to section 1126(f) of the Bankruptcy Code, provided, however, that holders of Class 1 Prepetition Secured Lender Claims shall be permitted to vote to accept or reject the Plan on a provisional basis. Class 12 for each of the Debtors and Class 13b for each of the applicable Subsidiary Debtors and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code because all holders of Claims in Class 12 for each of the Debtors and holders of Interests in Class 13b for each of the applicable Subsidiary Debtors and Chemtura Canada (in the event it becomes a Debtor before the Confirmation Date) are either Plan proponents or affiliates of Plan proponents.

 

4.2 Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code

Section 1129(a)(10) of the Bankruptcy Code shall be satisfied for purposes of Confirmation by acceptance of the Plan by an Impaired Class of Claims. The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. The Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) reserve the right to modify the Plan in accordance with Article XIII hereof to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification.

ARTICLE V

MEANS FOR IMPLEMENTATION OF THE PLAN

 

5.1 General Settlement of Claims and Interests

As discussed in detail in the Disclosure Statement and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed Claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and in consideration for the classification, Distributions, Releases and other benefits provided under the Plan, the provisions of the Plan shall upon Consummation constitute a good faith compromise and settlement of all Claims, Interests and controversies resolved pursuant to the Plan. Subject to Article VII, all distributions made to holders of Allowed Claims and Interests in any Class are intended to be and shall be final.

 

5.2 The Creditors’ Committee Action

As discussed in detail in the Disclosure Statement, as set forth in the Confirmation Order and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code, on the Effective Date of the Plan the Creditors’ Committee will agree to dismiss the Creditors’ Committee Action with prejudice, provided, however, that the Creditors’ Committee reserves all rights to pursue the Creditors’ Committee Action in the event that, for any reason, the Effective Date does not occur.

 

5.3 The PBGC Settlement

As discussed in detail in the Disclosure Statement, as set forth in the Confirmation Order and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code, the provisions of the Plan shall constitute a good faith compromise and settlement between the Debtors, the Creditors’ Committee and the PBGC, with the consent of the Ad Hoc Bondholders’ Committee, arising from or related to the disputed Claims and PBGC’s asserted rights of regulatory action, whereby Chemtura Corporation shall make a contribution in the amount of $50 million with respect to its underfunded U.S. pension obligations on the Effective Date, which shall have the effect of reducing later contribution requirements according to statute.

 

5.4 The CHCI Preferred Stock Settlement

As discussed in detail in the Disclosure Statement, as set forth in the Confirmation Order and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed

 

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claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims and controversies between the Estates and CHCI arising from or related to Great Lakes Chemical Corporation’s ownership of the CHCI Preferred Stock, whereby for all purposes related to distributions and allocated value among the Debtors pursuant to the Plan (and solely for Plan purposes) the CHCI Preferred Stock shall be given effect for 50% of its value.

 

5.5 The Make-Whole Settlement and the No-Call Settlement

As discussed in detail in the Disclosure Statement, as set forth in the Confirmation Order and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, the provisions of the Plan shall constitute (a) a good faith compromise and settlement of all Claims and controversies between the Debtors, the Creditors’ Committee, the Ad Hoc Bondholders’ Committee and the 2016 Notes Indenture Trustee arising from or related to the Make-Whole Premium and (b) a good faith compromise and settlement of all Claims and controversies between the Debtors, the Creditors’ Committee, the Ad Hoc Bondholders’ Committee and the 2026 Notes Indenture Trustee arising from or related to the No-Call Penalty. The holders of 2016 Notes will be entitled to an Allowed Claim equal to the Make-Whole Settlement Amount. The holders of 2026 Notes will be entitled to an Allowed Claim equal to the No-Call Settlement Amount. The terms of the Make-Whole Settlement and the No-Call Settlement were available to the Debtors by the Creditors’ Committee, the Ad Hoc Bondholders’ Committee, the 2016 Notes Indenture Trustee and the 2026 Notes Indenture Trustee only if the Debtors settled all of the Claims and controversies as a whole on the terms as offered. Postpetition interest will not be paid on the Make-Whole Settlement Amount or the No-Call Settlement Amount.

 

5.6 The Settlement Regarding the Fees of the Ad Hoc Bondholders’ Committee

As discussed in detail in the Disclosure Statement, as set forth in the Confirmation Order and as otherwise provided herein, as one element of, and in consideration for, an overall negotiated settlement of numerous disputed claims and issues embodied in the Plan, pursuant to Bankruptcy Rule 9019 and section 1123 of the Bankruptcy Code and with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, notwithstanding any provision in the Plan to the contrary, the Debtors or Reorganized Debtors shall pay in full in Cash within five business days of the Effective Date (unless otherwise provided herein) the reasonable, documented and necessary out-of-pocket fees and expenses incurred by the Ad Hoc Bondholders’ Committee up to an aggregate cap of $7 million, consistent with that certain Plan Support Agreement, dated as of June 17, 2010, among the Debtors, the Creditors’ Committee, members of the Ad Hoc Bondholders’ Committee and certain other holders of Notes Claims, without the need of any party to file fee applications with the Bankruptcy Court.

The Ad Hoc Bondholders’ Committee shall provide the Debtors and the Creditors’ Committee with the invoices (or such other documentation as the Debtors and the Creditors’ Committee may reasonably request) for services rendered on a periodic basis, and in any event no later than fifteen days before the Effective Date. The Debtors and the Creditors’ Committee will have ten business days from receipt of such invoices to review and raise any objections to the reasonableness of the fees or expense items set forth therein. All invoiced fees shall be deemed reasonable if no notice of objection is provided within ten business days of their receipt by the Debtors and the Creditors’ Committee, and if deemed reasonable shall be paid within five business days of the Effective Date (other than for fees and costs incurred in the 60 days prior to the Effective Date, which fees and costs, if not objected to, will be paid within fifteen business days of receipt if the Debtors and the Creditors’ Committee do not object to the reasonableness of such fees). To the extent that the Debtors or the Creditors’ Committee object to any of the fees of the Ad Hoc Bondholders’ Committee, the Debtors shall not be required to pay any disputed portion of such fees until a resolution of such objection is agreed to by the Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, or until issuance of a further order of the Bankruptcy Court upon motion by the Ad Hoc Bondholders’ Committee.

Notwithstanding the foregoing, the Debtors and the Creditors’ Committee acknowledge that they have reviewed the December 19, 2009 retainer agreement between Jones Day and Moelis & Company outlining the fees payable to Moelis & Company for its work in this matter, and hereby agree that the Monthly Fee and the

 

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Restructuring Fee (each as defined therein) are deemed reasonable and will be paid within five business days of the Effective Date; provided, however, that because the Debtors and Creditors’ Committee do not believe it will be necessary for Moelis & Company to provide testimony in this case, any Testimony Fees (as defined in the retainer agreement) are not deemed reasonable at this time, and will be subject to future consideration if and when incurred by the Ad Hoc Bondholders’ Committee, and would not cause the aggregate cap to be increased from $7 million unless specifically and subsequently agreed to by the Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee.

The Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee expressly agree and acknowledge that pursuant to Bankruptcy Rule 9019 and section 1129(a)(4) of the Bankruptcy Code, because the payment of the Ad Hoc Bondholders’ Committee’s fees is pursuant to the overall settlement underlying the Plan, the sole ground for objecting to any of the Ad Hoc Bondholders’ Committees fees, whether informally or before the Bankruptcy Court or other court of competent jurisdiction, shall be as to matters of reasonableness under section 1129(a)(4) of the Bankruptcy Code.

 

5.7 Environmental Matters

 

  (a) Post-Effective Date Environmental Obligations

All environmental obligations owing to Governmental Units relating to sites owned or operated by Chemtura Corporation or the Subsidiary Debtors as of the Effective Date, except those obligations that constitute Environmental Claims on account of costs expended or paid by a Governmental Unit before the Petition Date or penalties owing to a Governmental Unit for violations of environmental laws or regulations that occurred before the Petition Date, shall remain in place after the Effective Date. Nothing in the Plan shall limit, diminish or otherwise alter the Reorganized Debtors’ defenses, claims, Causes of Action, or other rights with respect to any environmental obligations owing to Governmental Units at owned or operated sites.

 

  (b) Environmental Adversary Proceeding

Nothing in the Plan shall constitute or be construed as an adjudication or settlement of the disputed issues between the parties to the adversary proceeding [Adv. Case. No. 09-01719] commenced by Chemtura Corporation and the Subsidiary Debtors against certain Governmental Units seeking a declaratory judgment that certain environmental orders and obligations that are or may be asserted against Chemtura Corporation and the Subsidiary Debtors by the Governmental Units with respect to non-owned former sites and non-owned off-site disposal sites are Claims that are dischargeable in the Chapter 11 Cases, which adversary proceeding is currently pending as of the date of the Plan before the United States District Court for the Southern District of New York.

 

5.8 The Unsecured Distribution Pool

The Unsecured Distribution Pool shall be used to fund (a) the payments pursuant to this Plan of all Allowed Claims in the Participating Creditor Classes, all on the terms set forth herein with respect to each such Class and (b) the Disputed Claims Reserve. To the extent that Class 13a for Chemtura Corporation votes to reject the Plan, any Cash or New Common Stock available in the Unsecured Distribution Pool following the funding described above (which shall include, for the avoidance of doubt, payment of all Allowed Claims in the Participating Creditor Classes in full and with interest in the full Allowed amount), then each holder of an Interest in Class 13a for Chemtura Corporation shall receive its Pro Rata share of such excess Cash and New Common Stock.

To the extent that there is insufficient value available in the Unsecured Distribution Pool to satisfy in full all Allowed Claims in the Participating Creditor Classes pursuant to this Plan, the resulting shortfall in distributable value shall result in the Shortfall Adjustment. Notwithstanding the foregoing, to the extent that additional Cash and New Common Stock become available for distribution after the Initial Distribution Date pursuant to Section 8.5, the resulting distributable value shall result in the Shortfall Readjustment.

 

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5.9 Election of Cash and New Common Stock

Each holder of an Allowed Claim in any Participating Creditor Class (except Classes of Notes Claims) may, at the time of voting upon the Plan, or, with respect to holders of Notes Claims, before the Voting Deadline, whether or not such holder votes on the Plan, make a binding election to seek to receive its recovery in the form of the maximum available percentage of Cash or the maximum available percentage of New Common Stock. To the extent that a creditor makes such an election, the Cash or New Common Stock that otherwise would be distributable to such creditor will be aggregated in the Electing Creditors’ Pool and will be reallocated among all Electing Creditors according to their recovery preferences (with all distributions to be made such that each Electing Creditor receives the aggregate value of consideration it otherwise would be entitled to, in the form of the preferred distribution to the extent possible). Whether and to what extent any Electing Creditor receives an increased percentage of the consideration it requested will depend upon the elections of all holders of Allowed Claims in the Participating Creditor Classes taken as a whole. The failure of a holder to make a binding election to participate in the Electing Creditors’ Pool during the voting period (including the failure to submit a validly executed ballot or other form) will reflect an agreement that such holder will receive its recovery in the Cash-to-New Common Stock ratio reflecting the Cash and New Common Stock in the Unsecured Distribution Pool.

 

5.10 Exit Financing/Incurrence of New Indebtedness

On the Effective Date, the Reorganized Debtors shall enter into the Exit Credit Facility Agreement and complete the Exit Financing in order to fund distributions under the Plan and to fund the Reorganized Debtors’ business operations, and the Debtors shall be authorized to execute and deliver those documents necessary or appropriate to obtain the Exit Financing, without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order or rule or vote, consent, authorization or approval of any person. The terms of the Exit Financing, including sizing, composition, fees, interest rates, and maturity will be reasonably acceptable to the Creditors’ Committee and the Ad Hoc Bondholders’ Committee and will be market-based.

 

5.11 Sources of Consideration for Plan Distributions

 

  (a) Cash Consideration

All Cash consideration necessary for the Reorganized Debtors to make payments or distributions pursuant hereto shall be obtained from the Exit Financing(s) or other Cash on hand of the Debtors, including Cash derived from business operations. Further, the Debtors and the Reorganized Debtors will be entitled to transfer funds between and among themselves as they determine to be necessary or appropriate to enable the Reorganized Debtors to satisfy their obligations under the Plan. Except as set forth herein, any changes in intercompany account balances resulting from such transfers will be accounted for and settled in accordance with the Debtors’ historical intercompany account settlement practices and will not violate or otherwise be affected by the terms of the Plan.

 

  (b) Issuance of New Common Stock

On the Effective Date, New Chemtura shall issue up to 100 million shares of New Common Stock for distribution to the holders of Allowed Claims against or Interests in Class 4a for Chemtura Corporation, Class 4b for each of the applicable Subsidiary Debtors, Classes 5 and 6 for Chemtura Corporation and each of the Subsidiary Debtors, Class 7 for Chemtura Corporation and Great Lakes Chemical Corporation and Classes 8 and 13a for Chemtura Corporation pursuant to the terms set forth herein. All of the shares of New Common Stock issued pursuant to the Plan shall be duly authorized, validly issued, fully paid and non-assessable. Each distribution and issuance referred to in Article VII shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance. The Reorganized Debtors will use their commercially reasonable best efforts to list the New Common Stock on a national securities exchange, with the initial goal of listing on the New York Stock Exchange or NASDAQ by the Effective Date.

 

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5.12 The Rights Offering

 

  (a) Use of Rights Offering Proceeds

As set forth in Section 3.3(m)(i)A), if Class 13a for Chemtura Corporation votes to accept the Plan, each holder of an Interest in Class 13a for Chemtura Corporation shall receive its Pro Rata share of the Rights to participate in the Rights Offering. The proceeds of the Rights Offering will be used to provide $100 million in Cash (or such lesser amount of proceeds actually achieved, to the extent the Rights Offering is not fully subscribed) funding to the Reorganized Debtors to fund distributions pursuant to the Plan.

 

  (b) Rights Offering Procedures

If Class 13a for Chemtura Corporation votes to accept the Plan, each holder of an Interest in Class 13a for Chemtura Corporation will be entitled to subscribe for and to acquire the Rights being offered pursuant to the Rights Offering in accordance with the terms of the Rights Offering Procedures, in substantially the form annexed hereto as Exhibit 1. The Rights Offering shall be subject to compliance with the Securities Act of 1933, as amended, including the filing and approval of an appropriate securities registration form with the Securities and Exchange Commission. In the event such registration statement is not effective at the time all conditions precedent to the Plan are satisfied or waived, the Effective Date may be delayed until the effective date of the registration statement. Alternatively, the Debtors will work with the Creditors’ Committee and the Ad Hoc Bondholders’ Committee to explore alternatives that would allow the Effective Date to occur before the effective date of the registration statement.

 

5.13 Cancellation of Securities and Agreements

On the Effective Date, except as otherwise specifically provided for in the Plan: (1) the obligations of the Debtors under the Prepetition Credit Agreement and the Indentures, and any other certificate, share, note, bond, indenture, purchase right, option, warrant or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any Claim or Interest (except such certificates, notes or other instruments or documents evidencing indebtedness or obligations of the Debtors that are specifically reinstated pursuant to the Plan), shall be cancelled as to the Debtors, and the Reorganized Debtors shall not have any continuing obligations thereunder and (2) the obligations of the Debtors pursuant, relating or pertaining to any agreements, indentures, certificates of designation, bylaws or certificate or articles of incorporation or similar documents governing the shares (including the CHCI Preferred Stock), certificates, notes, bonds, purchase rights, options, warrants or other instruments or documents evidencing or creating any indebtedness or obligation of the Debtors (except such agreements, certificates, notes or other instruments evidencing indebtedness or obligations of the Debtors that are specifically reinstated pursuant to the Plan) shall be released and discharged; provided, however, notwithstanding Confirmation or the occurrence of the Effective Date, that any such indenture or agreement that governs the rights of the holder of a Claim shall continue in effect solely for purposes of (a) allowing holders of Prepetition Secured Lender Claims, Prepetition Unsecured Lender Claims, 2009 Notes Claims, 2016 Notes Claims and 2026 Notes Claims (as applicable) to receive distributions under the Plan as provided herein, (b) allowing the Prepetition Administrative Agent and the Indenture Trustees, if applicable, to make distributions under the Plan as provided herein, and deduct therefrom such compensation, fees and expenses due thereunder or incurred in making such distributions and (c) allowing the Prepetition Administrative Agent and the Indenture Trustees to seek compensation and/or reimbursement of fees and expenses in accordance with the terms of this Plan; provided further, however, that the preceding proviso shall not affect the discharge of Claims or Interests pursuant to the Bankruptcy Code, the Confirmation Order or the Plan, or result in any expense or liability to the Reorganized Debtors, except to the extent set forth in or provided for under this Plan. On and after the Effective Date, all duties and responsibilities of the Prepetition Administrative Agent under the Prepetition Credit Agreement and the Indenture Trustees under the Indentures, as applicable, shall be discharged except to the extent required in order to effectuate the Plan.

 

5.14 Surrender of Existing Securities

As a condition precedent to receiving any distribution on account of any Note, each record holder of any Notes shall be deemed to have surrendered such Notes or other documentation underlying such Notes and all such surrendered Notes and other documentation shall be deemed to be cancelled in accordance with Section 5.12 of the Plan.

 

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5.15 Section 1145 Exemption

The issuance of the New Common Stock distributed pursuant to the Plan to holders of Claims and Interests shall be authorized under section 1145 of the Bankruptcy Code as of the Effective Date without further act or action by any person, unless required by provision of applicable law, regulation, order or rule. Holders of New Common Stock issued in respect of Allowed Unsecured Claims will be provided with reasonable and customary registration rights, to be set forth in more detail in the Plan Supplement, solely to the extent such New Common Stock may not be transferred without restriction pursuant to Rule 144 or is otherwise not freely saleable under the securities laws notwithstanding section 1145 of the Bankruptcy Code. Additionally, to the extent Class 13a for Chemtura Corporation votes to accept the Plan and the Rights Offering is subscribed in an amount such that the issuance of New Common Stock pursuant to the Rights Offering does not qualify for the statutory exemption from securities law provided under section 1145 of the Bankruptcy Code, a registration of the New Common Stock with the U.S. Securities and Exchange Commission will be required.

 

5.16 Corporate Existence

Except as otherwise provided herein, in the Corporate Governance Documents or elsewhere in the Plan Supplement, each Debtor, as Reorganized, shall continue to exist after the Effective Date as a separate corporate entity, limited liability company, partnership or other form, as the case may be, with all the powers of a corporation, limited liability company, partnership or other form, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed. The Corporate Governance Documents shall be in the form filed with the Plan Supplement.

 

5.17 New Certificate of Incorporation and New By-Laws

On or immediately before the Effective Date, New Chemtura and each of the other Reorganized Debtors will file their respective New Certificates of Incorporation with the applicable Secretaries of State and/or other applicable authorities in their respective jurisdictions of incorporation in accordance with the corporate laws of the respective jurisdictions of incorporation. After the Effective Date, New Chemtura and each of the other Reorganized Debtors may amend and restate their respective New Certificates of Incorporation and New By-Laws and other constituent documents as permitted by the laws of their respective jurisdictions of incorporation and their respective New Certificates of Incorporation and New By-Laws. The New Certificates of Incorporation and New By-Laws shall be included in the Plan Supplement and shall be subject to the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld.

 

5.18 New Chemtura’s and Reorganized Debtors’ Boards of Directors

On the Effective Date, the New Board will consist of 9 directors, one of which shall be the chief executive officer. The Debtors, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee shall establish a board selection committee to select 8 members of the New Board of New Chemtura in addition to the chief executive officer. The board selection committee, which shall be advised by an independent search firm, shall be charged with working together to try to reach consensus upon a list of the members of the New Board of New Chemtura. In the event, however, that consensus is not reached by the board selection committee, the Creditors’ Committee and the Ad Hoc Bondholders’ Committee shall, together, be entitled to designate 6 members of the New Board of New Chemtura and the Debtors shall be entitled to designate 2 members of the New Board of New Chemtura. Each designated member of the New Board of New Chemtura shall meet minimum eligibility requirements consistent with service on the board of a public company of comparable size to New Chemtura and the other Reorganized Debtors, with such minimum requirements to be identified by the independent search firm advising the board selection committee.

To the extent known, the identity of the members of the New Boards of New Chemtura and of each of the other Reorganized Debtors and the nature and compensation for any member of a New Board who is an “insider” under section 101(31) of the Bankruptcy Code will be identified in the Plan Supplement but, in any event, shall be disclosed at or before the Confirmation Hearing.

 

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5.19 Officers of New Chemtura and Reorganized Debtors

To the extent known, officers of New Chemtura and each of the other Reorganized Debtors shall be identified in the Plan Supplement but, in any event, shall be disclosed at or before the Confirmation Hearing. Such officers shall serve in accordance with applicable non-bankruptcy law and, to the extent applicable, the New Employment Agreements with New Chemtura and each of the other Reorganized Debtors.

 

5.20 Employee Benefits

Except as otherwise provided herein, on and after the Effective Date, the Reorganized Debtors may honor, in the ordinary course of business, any prepetition contracts, agreements, policies, programs and plans for, among other things, compensation (other than prepetition equity based compensation related to Interests, which shall receive appropriate compensation as provided for pursuant to the Plan), health care benefits, disability benefits, deferred compensation benefits, travel benefits, vacation benefits, savings plans, severance benefits, welfare benefits, workers’ compensation insurance, life insurance and accidental death and dismemberment insurance for the directors, officers and employees of any of the Debtors who served in such capacity at any time; provided, however, that the Debtors’ or Reorganized Debtors’ performance under any employment agreement will not entitle any person to any benefit or alleged entitlement under any contract, agreement, policy, program or plan that has expired or been terminated before the Effective Date, or restore, reinstate or revive any such benefit or alleged entitlement under any such contract, agreement, policy, program or plan. Nothing herein shall limit, diminish or otherwise alter the Reorganized Debtors’ defenses, claims, Causes of Action or other rights with respect to any such contracts, agreements, policies, programs and plans, including the Reorganized Debtors’ rights to modify unvested benefits pursuant to their terms.

 

5.21 Retiree Benefits

All employment, retirement and other agreements or arrangements in place as of the Effective Date with the Debtors’ officers, directors, or employees, who will continue in such capacities or similar capacities after the Effective Date, or retirement income plans and welfare benefit plans for such persons, shall remain in place after the Effective Date, and the Reorganized Debtors will continue to honor such agreements, arrangements, programs, and plans; provided, however, that the foregoing shall not apply to any stock-based compensation or incentive plan, agreement, or arrangement existing as of the Petition Date. Nothing in the Plan shall limit, diminish, or otherwise alter the Reorganized Debtors’ defenses, claims, Causes of Action, or other rights with respect to any such contracts, agreements, policies, programs, and plans. Notwithstanding the foregoing, pursuant to section 1129(a)(13) of the Bankruptcy Code, on and after the Effective Date, all retiree benefits (as that term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.

Pursuant to the Plan, the Debtors or Reorganized Debtors, as applicable, shall continue the U.S. Pension Plans. The U.S. Pension Plans shall be continued in accordance with their terms, and the Debtors or the Reorganized Debtors, as applicable, shall satisfy the minimum funding standards pursuant to 26 U.S.C. §§ 412 and 430 and 29 U.S.C. §§ 1082 and 1083, be liable for the payment of PBGC premiums in accordance with Title IV of ERISA, 29 U.S.C. §§ 1306 and 1307, subject to any and all applicable rights and defenses of the Debtors, and administer the U.S. Pension Plans in accordance with the provisions of ERISA and the Internal Revenue Code. Notwithstanding any provision of the Plan or the Confirmation Order to the contrary, the U.S. Pension Plans shall be continued and administered in accordance with ERISA and the Internal Revenue Code.

All Non-Qualified Pension Arrangements shall be deemed assumed as of the Effective Date to the extent they are Executory Contracts, or will be Reinstated pursuant to Section 3.3(d)(i)(B) or Section 3.3(d)(ii)(B), as applicable. Any monetary default under the Non-Qualified Pension Arrangements to be so assumed or Reinstated hereunder shall be satisfied in accordance with Section 6.3 or as otherwise may be agreed to by the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) and the beneficiaries of the Non-Qualified Pension Arrangements, and any postpetition interest paid on account of such Claims shall be paid at the federal judgment rate as of the Petition Date.

 

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Assumption or Reinstatement of any Non-Qualified Pension Arrangement pursuant to the Plan or otherwise and payment of postpetition interest in accordance with the preceding sentence shall be deemed to provide full satisfaction of all prepetition Claims arising under any assumed Non-Qualified Pension Arrangement including those set forth in Proofs of Claim Nos. 1973, 1974, 1975, 2046, 2048, 2049, 2081, 2084, 2086, 2088, 2165, 2166, 2167, 2168, 2169, 2170, 2171, 2172, 2173, 2174, 2198, 2199, 2239, 2336, 2337, 2338, 2353, 2355, 9496 and 10234.

 

5.22 The Incentive Plans

The terms of the Incentive Plans shall be as set forth in the Plan Supplement.

 

5.23 Vesting of Assets in the Reorganized Debtors

Except as otherwise provided in the Plan or any agreement, instrument or other document incorporated therein, on the Effective Date and all property in each Estate, all Causes of Action (except those released pursuant to the Releases by the Debtors) shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges or other encumbrances (except for Liens, if any, granted to secure the Exit Financing). On and after the Effective Date, except as otherwise provided in the Plan (including, without limitation, the provisions of Section 8.1 of the Plan), each Reorganized Debtor may operate its business and may use, acquire or dispose of property and compromise or settle any Claims, Interests or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

 

5.24 Restructuring Transactions

On the Effective Date or as soon as reasonably practicable thereafter, the Reorganized Debtors intend to simplify and rationalize their corporate structure by eliminating certain entities that are deemed no longer essential to the Reorganized Debtors and may take all actions as may be necessary or appropriate to effect such transactions, including any transaction described in, approved by, contemplated by or necessary to effectuate the Plan, including: (1) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution or liquidation containing terms that are consistent with the terms of the Plan and that satisfy the applicable requirements of applicable law and any other terms to which the applicable Entities may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, debt or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable parties agree; (3) the filing of appropriate certificates or articles of incorporation, reincorporation, merger, consolidation, conversion or dissolution pursuant to applicable state law; and (4) all other actions that the applicable Entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law. Prior to the Effective Date, the Debtors shall have obtained the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld, regarding their intentions with respect to the restructuring transactions.

 

5.25 Corporate Action

Upon the Effective Date, all actions contemplated by the Plan (including the simplification of the Reorganized Debtors’ corporate structure) shall be deemed authorized and approved in all respects, including (1) entry into the New Employment Agreements; (2) selection of the directors and officers of the Reorganized Debtors; (3) the execution of and entry into the Exit Financing; (4) the distribution of the New Common Stock as provided herein; (5) the establishment of the Diacetyl Reserve and the Environmental Reserve and, if elected by the Debtors, the Diacetyl Trust and the Environmental Trust; and (6) all other actions contemplated by the Plan (whether to occur before, on or after the Effective Date). All matters provided for in the Plan involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan shall be deemed to have occurred and shall be in effect, without any requirement of further action by the directors or officers of the Debtors or the Reorganized Debtors.

 

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5.26 Effectuating Documents; Further Transactions

On and after the Effective Date, the Reorganized Debtors and the managers, officers and members of the boards of directors thereof are authorized to issue, execute, deliver, file or record such contracts, securities, instruments, releases and other agreements or documents related to the foregoing and take such actions as may be necessary or appropriate to effectuate, implement and further evidence the terms and conditions of the Plan (including the Exit Financing) and the securities issued pursuant to the Plan in the name of and on behalf of the Reorganized Debtors, without the need for any approvals, authorization or consents except for those expressly required pursuant to the Plan. The authorizations and approvals contemplated by this Section 5.26 shall be effective notwithstanding any requirements under non-bankruptcy law.

 

5.27 Section 1146 Exemption from Certain Taxes and Fees

Pursuant to section 1146(a) of the Bankruptcy Code, any transfers of property pursuant to the Plan shall not be subject to any stamp tax or other similar tax or governmental assessment in the United States, and the Confirmation Order shall direct and be deemed to direct the appropriate state or local governmental officials or agents to forgo the collection of any such tax or governmental assessment and to accept for filing and recordation instruments or other documents pursuant to such transfers of property without the payment of any such tax or governmental assessment. Such exemption specifically applies, without limitation, to (1) the creation of any mortgage, deed of trust, lien or other security interest; (2) the making or assignment of any lease or sublease; (3) any restructuring transaction authorized by Section 5.24 hereof; or (4) the making or delivery of any deed or other instrument of transfer under, in furtherance of or in connection with the Plan, including: (a) any merger agreements; (b) agreements of consolidation, restructuring, disposition, liquidation or dissolution; (c) deeds; or (d) assignments executed in connection with any transaction occurring under the Plan.

 

5.28 D&O Liability Insurance Policies

Notwithstanding anything herein to the contrary, as of the Effective Date, the Debtors shall assume (and assign to the Reorganized Debtors if necessary to continue the D&O Liability Insurance Policies in full force) all of the D&O Liability Insurance Policies pursuant to section 365(a) of the Bankruptcy Code. Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the Debtors’ foregoing assumption of each of the D&O Liability Insurance Policies. Notwithstanding anything to the contrary contained herein, Confirmation of the Plan shall not discharge, impair or otherwise modify any obligations assumed by the foregoing assumption of the D&O Liability Insurance Policies, and each such obligation shall be deemed and treated as an Executory Contract that has been assumed by the Debtors under the Plan as to which no Proof of Claim need be filed. On or before the Effective Date, the Reorganized Debtors shall obtain reasonably sufficient tail coverage (i.e., D&O insurance coverage that extends beyond the end of the policy period) under a directors and officers’ liability insurance policy for the current and former directors, officers and managers for a period of five years, and placed with such insurers, the terms of which shall be set forth in the Plan Supplement.

 

5.29 Preservation of Rights of Action

In accordance with section 1123(b) of the Bankruptcy Code, and except where such Causes of Action have been expressly released (including, for the avoidance of doubt, pursuant to the Releases by the Debtors provided by Section 11.2 hereof), the Reorganized Debtors shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, and the Reorganized Debtors’ rights to commence, prosecute or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Reorganized Debtors may pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. No Entity may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action against them. Except with respect to Causes of Action as to which the Debtors or Reorganized Debtors have released any Person or Entity on or before the Effective Date (including pursuant to the Releases by the Debtors or otherwise), the Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan. Unless any Causes of Action against an Entity are expressly waived, relinquished, exculpated, released, compromised or settled in the Plan

 

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or a Bankruptcy Court order, the Reorganized Debtors expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches, shall apply to such Causes of Action upon, after or as a consequence of the Confirmation or Consummation.

 

5.30 Single Satisfaction of Claims

Holders of Allowed Claims may assert such Claims against each Debtor obligated with respect to such Claim, and such Claims shall be entitled to share in the recovery provided for the applicable Class of Claims against each obligated Debtor based upon the full Allowed amount of the Claim. Notwithstanding the foregoing, in no case shall the aggregate value of all property received or retained under the Plan on account of Allowed Claims exceed 100% of the underlying Allowed Claim plus applicable interest.

ARTICLE VI

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

 

6.1 Assumption and Rejection of Executory Contracts and Unexpired Leases

Except as otherwise provided herein, or in any contract, instrument, release, indenture or other agreement or document entered into in connection with the Plan, each of Chemtura Corporation’s and the Subsidiary Debtors’ Executory Contracts and Unexpired Leases shall be deemed rejected as of the Effective Date, unless such Executory Contract or Unexpired Lease: (1) was assumed or rejected previously by the Debtors; (2) previously expired or terminated pursuant to its own terms; (3) is the subject of a motion to assume filed on or before the Effective Date; or (4) is identified as an Executory Contract or Unexpired Lease to be assumed pursuant to the Plan Supplement before the Effective Date. In the event that Chemtura Canada becomes a Debtor before the Effective Date, each of Chemtura Canada’s Executory Contracts and Unexpired Leases shall be deemed assumed as of the Effective Date.

Entry of the Confirmation Order shall constitute a Bankruptcy Court order approving the assumptions or rejections of such Executory Contracts or Unexpired Leases as set forth in the Plan, all pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Unless otherwise indicated, all assumptions or rejections of Executory Contracts and Unexpired Leases pursuant to the Plan are effective as of the Effective Date. Each Executory Contract or Unexpired Lease assumed pursuant to the Plan or by Bankruptcy Court order but not assigned to a third party before the Effective Date shall revest in and be fully enforceable by the applicable contracting Reorganized Debtor in accordance with its terms, except as such terms may have been modified by such order. Notwithstanding anything to the contrary in the Plan, the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) or the Reorganized Debtors, as applicable, reserve the right to alter, amend, modify or supplement the list of Executory Contracts and Unexpired Leases identified in the Plan Supplement at any time before the Effective Date. After the Effective Date, the Reorganized Debtors shall have the right to terminate, amend or modify any intercompany contracts, leases or other agreements without approval of the Bankruptcy Court.

 

6.2 Claims Based on Rejection of Executory Contracts or Unexpired Leases.

All proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, must be filed with the Bankruptcy Court within 30 days after the date of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection. Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not filed with the Bankruptcy Court within such time will be automatically disallowed, forever barred from assertion and shall not be enforceable against the Debtors or the Reorganized Debtors, the Estates or their property without the need for any objection by the Reorganized Debtors or further notice to, or action, order or approval of the Bankruptcy Court. All Allowed Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as Class 4 General Unsecured Claims against the applicable Debtor and shall be treated in accordance with Article III of the Plan. The deadline to object to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, shall be the later of (a) 90 days following the date on which such Claim was filed and (b) such other period of limitation as may be specifically fixed by an order of the Bankruptcy Court for objecting to such Claims.

 

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6.3 Cure of Defaults for Executory Contracts and Unexpired Leases Assumed.

Any monetary defaults under each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash on the Effective Date, subject to the limitations described below, or on such other terms as the parties to such Executory Contracts or Unexpired Leases (and the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, whose consent shall not be unreasonably withheld) may otherwise agree. In the event of a dispute regarding (1) the amount of any payments to cure such a default, (2) the ability of the Reorganized Debtors or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed or (3) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order or orders resolving the dispute and approving the assumption. At least fourteen days before the Confirmation Hearing, the Debtors shall distribute, or cause to be distributed, notices of proposed assumption and proposed amounts of Cure Claims to the applicable third parties, which notices shall be in a format reasonably acceptable to the Creditors’ Committee and shall include procedures for objecting to proposed assumptions of Executory Contracts and Unexpired Leases and any amounts of Cure Claims to be paid in connection therewith and resolution of disputes by the Bankruptcy Court. Any objection by a counterparty to an Executory Contract or Unexpired Lease to a proposed assumption or related cure amount must be filed, served and actually received by counsel to the Debtors and the Creditors’ Committee at least three days before the Confirmation Hearing. Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or cure amount. A list of the Executory Contracts and Unexpired Leases to be assumed and the notices of proposed assumption and proposed amounts of Cure Claims shall be included in the Plan Supplement.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the effective date of the assumption.

 

6.4 Modifications, Amendments, Supplements, Restatements or Other Agreements.

Unless otherwise provided in the Plan, each Executory Contract or Unexpired Lease that is assumed shall include all modifications, amendments, supplements, restatements or other agreements that in any manner affect such Executory Contract or Unexpired Lease, and all Executory Contracts and Unexpired Leases related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal and any other interests, unless any of the foregoing agreements has been previously rejected or repudiated or is rejected or repudiated under the Plan.

Modifications, amendments, supplements and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease, or the validity, priority or amount of any Claims that may arise in connection therewith.

 

6.5 Reservation of Rights.

Neither the exclusion nor inclusion of any Executory Contract or Unexpired Lease on the Rejected Executory Contract and Unexpired Lease List, nor anything contained in the Plan, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that any Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors (with the consent of the Creditors’ Committee and the Ad Hoc Bondholders’ Committee, which consent shall not be unreasonably withheld) or Reorganized Debtors, as applicable, shall have 30 days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

 

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6.6 Contracts and Leases Entered Into After the Petition Date.

Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the Debtor or Reorganized Debtor liable thereunder in the ordinary course of its business. Accordingly, such contracts and leases (including any assumed Executory Contracts and Unexpired Leases) will survive and remain unaffected by entry of the Confirmation Order.

 

6.7 Assumption of Insurance Policies

Notwithstanding anything contained herein, in the Disclosure Statement, the Plan Supplement or the Confirmation Order, on the Effective Date, each of the Insurance Policies shall, as applicable, be deemed assumed to the extent such Insurance Policies are Executory Contracts of the applicable Debtor(s) pursuant to section 365 of the Bankruptcy Code.

ARTICLE VII

PROVISIONS GOVERNING DISTRIBUTIONS

 

7.1 Total Enterprise Value

Distributions of New Common Stock to Holders of Allowed Claims, and the establishment and maintenance of the Disputed Claims Reserve, Diacetyl Reserve and Environmental Reserve, as described below, shall be based upon, among other things, the New Chemtura Total Enterprise Value. For purposes of distribution, the New Common Stock shall be deemed to have the value assigned to it based upon, among other things, the New Chemtura Total Enterprise Value regardless of the date of distribution.

 

7.2 Record Date for Distributions

As of the entry of the Confirmation Order, the various transfer registers for each of the Classes of Claims or Interests as maintained by the Debtors or their respective agents shall be deemed closed, and there shall be no further changes made to reflect any new record holders of any Claims or Interests. The Debtors shall have no obligation to recognize any transfer of Claims or Interests occurring on or after the Distribution Record Date.

 

7.3 Timing and Calculation of Amounts to Be Distributed

Except as otherwise provided in the Plan, on the Effective Date or as soon as reasonably practicable thereafter (or if a Claim or Interest is not an Allowed Claim or Interest on the Effective Date,