Huntsman Corporation (NYSE: HUN) Investor Securities Class Action Lawsuit 07/17/2008

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Company Name(s): 
Huntsman
Case Name: 
Huntsman Shareholder Class Action Lawsuit 07/17/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: HUN
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/17/2008
Class Period Begin: 
05/14/2008
Class Period End: 
06/18/2008
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
09/15/2008
Date Settled: 
05/19/2010
Settlement Amount: 
$18,000,000
Deadline to Participate in Settlement: 
05/05/2010
Summary: 

May 19, 2010 - The court approved the settlement entered the orders approving the plan of allocation, the motion for attorneys' fees and expenses, and dismissed the action with prejudice.

January 21, 2010 - The court preliminarily approved the settlement.

January 11, 2010 - Parties filed stipulation of settlement.

March 18, 2009 - The court denied motions to reconsider lead plaintiff and lead counsel.

February 27, 2009 - Motions to reconsider lead plaintiff and lead counsel were filed.

February 17, 2009 - The lead plaintiffs and lead counsel were appointed.

September 15, 2008 - Lead plaintiff motions were filed.

July 17, 2008 - An investor in shares of Huntsman Corporation (NYSE: HUN) filed a lawsuit in the U.S. District Court for the Southern District of New York against Hexion Specialty Chemicals Inc (formerly NYSE: HXN), owned by investment firm Apollo Capital Management LP, over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff charges Hexion Specialty Chemicals Inc and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that between May 14, 2008 and June 18, 2008 defendants issued materially false and misleading statement regarding Hexion Specialty Chemical Inc's business and financial results.

The complaint alleges that Hexion Specialty Chemicals Inc hurt Huntsman Corporation investors when it did not publicly disclose its concerns about its proposed purchase of the chemical maker. Huntsman Corporation (NYSE: HUN) shares increased after Hexion Specialty Chemicals Inc said in 2007 it would buy the chemical company for $10.6 billion, including debt. The Stockholder alleges that Hexion Specialty Chemicals Inc and its executives hid their efforts to stop a merger with Huntsman Corporation, which caused Huntsman Corporation's (NYSE: HUN) stock price to become artificially inflated. But later Hexion Specialty Chemicals Inc had doubts about the purchase, disturbed by Huntsman Corporation's financial results and the state of the U.S. economy and the Huntsman Corporation shares decreased 40% after Hexion Chemical Specialty Inc filed a lawsuit against Huntsman Corporation in June, seeking to limit its liability in the event the deal falls apart.

The complaint alleges that on July 12, 2007, Hexion Chemical Specialty Inc announced an agreement to acquire all Huntsman Corporation (NYSE: HUN) common stock in a merger transaction for $28/share. The transaction was to close during the second quarter 2008 pending receipt of regulatory approvals and satisfaction of other closing conditions. Huntsman Corporation shareholders approved the transaction on October 16, 2007. On May 14, 2008, Hexion Specialty Chemicals Inc disclosed that it agreed to allow additional time to obtain the regulatory approvals. Unbeknownst to the public, defendants had determined to abort the merger and took steps to abrogate the Merger Agreement. Defendants retained the services of Duff & Phelps to render an opinion that the combined entity lacked financial viability. On June 18, 2008, Duff sent a letter to the Board of Directors of Hexion Specialty Chemicals Inc opening that the combined company’s assets would not exceed its liabilities, that it would not have the ability to pay its total debts and liabilities as they become due and that it would have an unreasonably small amount of capital. On that same date, defendants filed a complaint in the Delaware Court of Chancery, seeking abrogation of the Merger Agreement. The reaction in the marketplace was devastating to the price of Huntsman’s common stock. On June 19, 2008, the first day of trading after the June 18, 2008 actions by Hexion Specialty Chemicals Inc (NYSE: HXN), the market price of Huntsman Corporation (NYSE: HUN) common stock fell approximately $8, or 40%, from $20.86 to close at $12.84, on enormous volume of approximately 43 million shares.