Chemtura Corporation (PINK:CEMJQ) dropped 32% in midday Wednesday as the shareholders weren’t allowed to file alternative reorganization plan suggestions for the failed business.The bankruptcy court allowed Chemtura to follow their own reorganization terms, under which the company has to get creditor approval until November 21, 2010. Shareholders were not satisfied with the Chapter 11 plan, as it was made during the times of economic turmoil and doesn’t address the possibilities that have arisen with the recovery.[BANNER]
$120 million in questionable settlements were made with Pension Benefit Guaranty Corp. and addressing claims about environmental damages related to Diacetyl.
Chemtura’s own plan of reorganization includes huge 98% dilution to shareholders. Shares are given a value of 27 cents following Chemtura Disclosure Statement and Plan of Reorganization as 100 more shares are to be issued. Following the downtrend, it seems the market price will eventually reach this level even without dilution.
Technically the next stop for the roll down is somewhere near the $0.20 limit, which had held a year ago.
Chemtura filed for Chapter 11 protection in March 2009 and is now trying to deal with the creditors and restructure the business. Share price is declining in the light of stock compensation to be given to creditors.
