Lyondell Chemical Co. v. Centerpoint Energy Gas Services

LyondellBasell Industries AF S.C.A. (LBIAF) was a holding company organized in the Netherlands, but its principal place of business was in Luxembourg. LBIAF was part of a complex corporate structure encompassing numerous entities and integrated operations in multiple countries. Various indirect subsidiaries of LBIAF did business in the United States (the American subsidiaries) (debtors) and entered into commercial transactions in which the American subsidiaries later failed to honor their obligations. The counterparties to these transactions (the guaranty creditors) obtained claims guaranteed by LBIAF. LBIAF was also the principal obligor on a series of notes guaranteed by LBIAF subsidiaries in both Europe and the United States. The notes were secured by shares of LBIAF’s sole direct subsidiary, Basell Funding S.a.r.l., which itself had several direct and indirect subsidiaries, mostly based in Europe. The American subsidiaries filed for Chapter 11 bankruptcy, which triggered a default under the notes’ indenture agreement. LBIAF also defaulted on payment of the notes, though evidence suggested that this was curable. Subjecting LBIAF to an involuntary insolvency proceeding in Europe was a possibility, but this carried the potential to liquidate LBIAF and ultimately force various European affiliates into their own insolvency proceedings in as many as eight countries. The American subsidiaries sought to preliminarily enjoin the guaranty creditors from pursuing remedies against LBIAF.