The Lyondell Chemical Company and its 93 associated debtors’ (the “Debtors”) bankruptcy preference claims were transferred to the LB Litigation Trust when the LyondellBasell Third Amended and Restated Joint Chapter 11 Plan of Reorganization became effective on April 30, 2010. The plaintiff in the actions is Edward S. Weisfelner, as Trustee of the trust. Although starting slowly with the filing of only 39 preference actions from December 7, 2010 to December 17, 2010, the LB Litigation trust has the strong potential to launch a massive preferential transfer recovery effort.

The body of the complaints are mere recitations of the statutory requirements.  The Exhibit A identification of transfers provides an identification of the transferor Associated Debtor and the invoice being paid (the antecedent debt) is identified by number and date.

On the issue of insolvency, the complaints are factually barren.  With 93 different debtors, insolvency is always a question to be evaluated on a debtor by debtor basis.  Unfortunately, on the liability side, the Schedules of Assets and Liabilities frequently will not provide any guidance.  The $17,095,639,048 in secured claims is repeated on many of the schedules. If solvency is indicated after excluding the secured debt, whether there is a basis for allocation of the secured debt is a question that may need to be addressed.

ADVERSARY PROCEEDINGS OVERVIEW