Huntsman's Trial Against European Banks Begins

ERNEST SCHEYDER

NEW YORK (AP) — Huntsman Corp. told a Texas courtroom Monday that two European banks schemed with a private-equity company to scuttle a $6.5 billion buyout of the chemicals maker last year.

The company is seeking up to $4.6 billion from Switzerland's Credit Suisse and Germany's Deutsche Bank.

A year after a deteriorating economy led to an exodus of billions in private-equity money from several proposed takeovers, Huntsman's is one of the few that has not been resolved, at least legally.

Sallie Mae, 3Com Corp., Affiliated Computer Services and United Rentals are among the companies targeted by private-equity firms, and subsequently dropped as buyout targets when economic conditions worsened and balance sheets deteriorated.

Huntsman claims the banks worked behind the scenes to renegotiate a funding agreement with Hexion Specialty Chemicals' owner, the private equity firm Apollo Management.

The chemical industry had some of the highest profile deals fail or head to court. Two of them included Dow Chemical. First, Kuwait scrapped a $17.4 billion joint venture with Dow. Dow, suddenly short on cash, postponed its $16 billion buyout of specialty chemicals maker Rohm & Haas. That case was settled right before it went to trial this spring.