The creditors committee of insolvent LyondellBasell (Rotterdam / The Netherlands; www.lyondellbasell.com) has filed suit against owner Access Industries as well as several executives and the polyolefins group’s lenders, seeking to recover the USD 22 bn they say was lost in the botched merger of the former Lyondell and Basell in 2007. The creditors charge that the backers of the merger chose to ignore well-known risks, such as the cyclical downturn which occurred in 2008.

This legal action follows approval by US bankrupty court judge Robert Gerber, who has heard the bankruptcy case from the outset of proceedings early this year. US news media say the judge has warned that the case must proceed quickly so that it does not interfere with LyondellBasell’s planned emergency from Chapter 11 at the end of 2009. A spokesman for the insolvent group is quoted as expressing optimism that the suit will be resolved “in a timely manner.” A reorganisation plan is to be filed in September.

LyondellBasell’s creditors, who are seeking a jury trial on charges of fraud, breach of contract and breach of fiduciary, as well as mismanagement, contend that the Chapter 11 filing was “entirely foreseeable” and a “direct consequence” of the merger. They say the deal was overleveraged and, moreover, “essentially a gamble” and also term the USD 48 per share paid in the buyout as “excessive.” The object of the suit, US reports say, is to require the defendants to pay LyondellBasell and thus swell the sum the group must pay its creditors.

Altogether, 74 defendants are named in the proceedings, including Access owner Len Blavatnik and a number of top-level LyondellBasell executives, among them chief financial officer (CFO) Alan Bigman. Also named are banks and investment banks involved in the 2007 merger, including such well known names as Citibank, Merrill Lynch, Goldman Sachs, Barclays and Perella Weinberg.

Apparently as a consequence of CFO Bigman being named in the lawsuit, LyondellBasell has appointed a replacement. Kent Potter will take up the position on 1 August 2009. Most recently a petrochemicals industry consultant, Potter is a former CFO of Russia’s second largest oil company, TNK-BP. From 2000 to mid-2003, he was vice president and CFO of ChevronPhillips, where he also served on the board of directors. Current LyondellBasell CEO Jim Callogly is also is a former executive of the ChevronPhillips group.