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Judge Lets Huntsman Suit Against Banks Advance

The Associated Press

NEW YORK (AP) — Investors sent shares of Huntsman Corp. higher Tuesday, after the chemicals maker said a Texas judge cleared the way for its multibillion-dollar suit against Credit Suisse and Deutsche Bank.

The stock rose 27 cents, or 4.7 percent, to $6.01 in morning trading. They traded as high as $6.31 earlier in the session.

The Woodlands, Texas-based company filed suit against the banks last year after they declined to fund Hexion Specialty Chemical's $6.51 billion buyout of Huntsman, which was proposed in July 2007.

To accept Hexion's proposal, Huntsman called off a previously accepted $5.6 billion buyout offer from Basell AF, opting to pay a $200 million breakup fee.

As the economy slid and consumers spent less, Huntsman lost $172.2 million in 2007, compared with a $229.8 million profit in 2006. Fearing it was overpaying for Huntsman, Hexion tried to break off the deal.

Credit Suisse and Deutsche Bank backed away from the deal last October, saying the combined company likely wouldn't be able to survive.

After a string of lawsuits and legal maneuvers, Huntsman let Hexion walk away for a $1 billion payout late last year. But Huntsman said it would still pursue its legal case against the banks, claiming "tortuous interference," ''negligent misrepresentation and civil conspiracy."

As part of Judge Fred Edwards' Monday ruling in the Texas Ninth District Court, Huntsman will be able to ask the jury for funds its shareholders would have received had each deal gone through, or $3.6 billion for the Basell deal and $4.6 billion for the Hexion deal.

The trial is set for June 8 in Montgomery County, Texas.

"Huntsman has always believed that our cause is just, and we now look forward to presenting our claims to the jury," President and Chief Executive Peter Huntsman said in a statement.

Representatives from Credit Suisse and Deutsche Bank were not immediately available for comment.

Separately Tuesday, Huntsman declared a dividend of 10 cents, payable on June 30 to shareholders of record on June 15.

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AP Energy Writer Deborah Jian Lee contributed to this report.