Solutia Inc. has secured court approval of its deal with a handful of unsecured creditors who will provide $250 million into the recovering chemical company in exchange for backstop rights and the chance to directly purchase discounted new stock, Bankruptcy Law360 reported yesterday. Solutia signed the agreement last month with UBS Securities LLC, Merrill Lynch & Co. Inc., a General Motors Corp. pension fund, and hedge funds Highland Capital Management, Longacre Fund Management and Southpaw Asset Management. Under the arrangement, the backstop investors will pay $175 million to be put toward retiree pensions and $75 million that will cover other legacy liabilities. They will buy any stock that other unsecured creditors, noteholders and existing stockholders don’t buy in the new offering, in which the stock will sell for $13.33 a share, discounted from the $20 expected value. Solutia will get the $250 million even if the offering is under-subscribed, the company said.
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The alleged financial scandal and subsequent bankruptcy of Nova Corp. in Japan has left nearly 4,000 foreign-language teachers working for the company without pay for weeks and some unsure of how they will return home, the Wall Street Journal reported on Friday. The company had been on a hiring binge, setting up recruitment offices in the United States and the United Kingdom and visiting college campuses offering jobs.  Financial abuses by the company’s chief executive are now coming to light as founder Nozomu Sahashi allegedly moved profits from publicly traded Nova to his private company, according to a court-appointed administrator. Nova’s instructors are now jobless, and those who have lived from paycheck to paycheck are stuck in Japan.
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Chrysler announced yesterday that it would eliminate 11,000 hourly and salaried jobs in the United States and Canada, and cut shifts of workers at five plants, the New York Times reported today. The decision comes on top of a plan, announced in February, to eliminate 13,000 jobs and close a factory in Newark, Del. Taken together, Chrysler will be reducing its 2006 workforce of about 80,000 employees by 30 percent. Chrysler’s new chief executive, Robert L. Nardelli, blamed sagging auto sales for the company’s steps. Chrysler developed its earlier plan in a stronger car market, Nardelli said, while still under the wing of Daimler, its former German parent. General Motors also recently said that it would eliminate shifts at three assembly plants in Michigan. The moves, announced after GM union workers approved their new contract, will most likely cut 3,000 jobs, though GM has not confirmed the total.