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Huntsman files suit alleging Rockwood color pigments fraud

February 17/2017

MOSCOW (MRC) -- Huntsman last week filed a legal complaint in New York State alleging that Rockwood engaged in a "massive fraud" around technology in its color pigments division during discussions leading up to Huntsman’s USD1.1-billion acquisition of Rockwood’s pigments business, reported IHS Chemical Week.

The suit alleges that Rockwood deliberately misled Huntsman about the efficacy of a color pigments technology called "Bluebird," which “would eliminate reliance on Chinese raw materials and allow Huntsman to close numerous inefficient Rockwood pigment plants that Huntsman would receive in the deal," the complaint. The suit names Albemarle - which acquired Rockwood in 2015 - as one of the defendants, along with Seifi Ghasmi, the former Rockwood CEO who now leads Air Products, and several other former Rockwood executives.

"Huntsman has now learned that Rockwood’s representations and data were false and misleading," the court filing says. "Rockwood misrepresented pigments data to Huntsman and lied about the performance of the Bluebird technology, which Rockwood knew did not work." The legal complaint, which requests a jury trial, argues that Rockwood’s mischaracterizations constitute a violation of the companies’ purchase agreement for the pigments business, and it requests "to restore the parties to the status quo ante, or, to the extent that recession is not feasible, rescissory damages in an amount that will proven at trial."

The complaint alleges that Huntsman continued making deceptive statements about Bluebird in part because “Albemarle had told Rockwood in no uncertain terms that if Huntsman walked away from its pigments deal with Rockwood, Albemarle’s purchase would be jeopardized," and that Huntsman would not have made the deal had it known about the problems with the Bluebird technology. It does not allege that Albemarle had knowledge of the problems with Bluebird.

One analyst says that the suit could result in material damages. "In our admittedly non-legal opinion we believe Huntsman did not frivolously bring this lawsuit forward," says Frank Mitch, an analyst with Wells Fargo. "Therefore, we wouldn’t be surprised to see it recoup some sort of financial damages." The complaint notes that Albemarle acknowledged that performance issues with the Bluebird technology at a meeting between Albemarle and Huntsman last year.

As MRC informed before, in October 2014, Huntsman Corporation announced that it had completed the acquisition of the Performance Additives and Titanium Dioxide (TiO2) businesses of Rockwood Holdings, Inc. Huntsman paid approximately USD1 billion in cash and assumed certain unfunded European pension liabilities.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.


mrcplast.com
Author:Margaret Volkova
Tags:dioksid titana, pigments, construction, paints and coatings, Huntsman, USA.
Category:General News
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