Penn Specialty Chemicals, Inc.

Client Profile
Penn Specialty Chemicals, Inc.(‘Penn’ or the ‘Company’), Debtor-in-Possession, is among the top three global producers and marketers of: (i) polytetramethylene ether glycol (PTMEG), (ii) tetrahydrofuran (THF) and (iii) furfural and furan based fine chemicals and solvents. These value-added, high-growth specialty chemical products serve a broad range of industry end uses, satisfying stringent product requirements for high-growth segments, such as spandex, thermoplastic polyurethanes (‘TPUs’), pharmaceutical intermediates, PVC pipe cement and precision magnetic tapes.
Situation
As a result of varied financial and operational challenges, Penn Specialty Chemicals filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code on July 9, 2001. Penn Specialty Chemicals entered into a Toll Processing Arrangement with Lyondell Chemical Company, the structure of which would bring enough liquidity into the estate to effectuate a Plan of Reorganization, but would still require a restructuring of all classes of creditors, as well as equity.
Solution
SSG, in conjunction with the Company’s counsel, Dechert Price & Rhoads, structured a Plan of Reorganization that restructured all classes of the Company’s creditors and equity. SSG helped to negotiate was all stakeholders in the case, including the Board of Directors, equity holders, subordinated debt holders, unsecured creditors and the senior lenders to come to a consensual Plan of Reorganization. The Plan of Reorganization was confirmed in the US Bankruptcy Court for the District of Delaware on July 16, 2002.