A federal judge revived a lawsuit alleging that Lyondell Chemical Co. intentionally cheated creditors out of $6.3 billion when it underwent a 2007 leveraged buyout, only to go bankrupt barely a year later, Reuters reported yesterday. District Judge Denise Cote said that a federal bankruptcy judge erred in dismissing a bid by Edward Weisfelner, a trustee representing Lyondell unsecured creditors, to recover the money from shareholders who pocketed roughly $12.5 billion. "We are extremely encouraged," Weisfelner said. "There is a very good chance there will be recompense for creditors who were injured and have been waiting years." Lyondell had merged with an affiliate of Russian billionaire Len Blavatnik's Access Industries in December 2007, but went bankrupt in January 2009 as it struggled with too much debt and slumping demand amid the global financial crisis. The case is Weisfelner v. Hofmann, et al., U.S. District Court, Southern District of New York, No. 16-00518. The bankruptcy case is In re Lyondell Chemical Co., U.S. Bankruptcy Court, Southern District of New York, No. 09-10023.
