Exhibit 99.6
Jonathan S. Henes
To Call Writer Directly:
212 446-4927
jhenes@kirkland.com
April 16, 2007
VIA E-MAIL AND U.S. MAIL
- ------------------------
Dear Ben, Lloyd and John:
Thank you for attending both the March 29th and April 10th meetings with
Solutia and Solutia's other major stakeholders in New York City. As you are
aware, at the April 10th meeting, Solutia provided a detailed settlement
proposal to each of its stakeholders. The settlement proposal, which Solutia
believes sets forth a rational and reasonable settlement of all of the
unresolved issues in the chapter 11 cases, was intended to act as a platform
for discussion and good faith negotiations. On April 10th and thereafter,
extensive discussions and negotiations have taken place between and among
Solutia and its various stakeholders. On April 10th, Monsanto and the ad hoc
committee of Noteholders (the "Noteholders' Committee") informed Solutia that
they had reached a settlement between themselves and requested that Solutia
join this settlement.
In connection with the Monsanto/Noteholders' Committee settlement, you raised
issues concerning (a) the impact on Solutia of (i) Monsanto's expressed desire
to exit Chocolate Bayou and (ii) a reduced rights offering and strike price,
and (b) the valuation of Flexsys. Since then, the Noteholders' Committee has
expressed its opinion that the valuation of Solutia is less than that
suggested by Solutia. As you are aware, Rothschild and Blackstone are meeting
tomorrow to discuss valuation issues and hopefully Rothschild will get
Blackstone's preliminary valuation materials so we can form a view of the
Noteholders' Committee's valuation.
In addition, Solutia's management team has reviewed these issues and others
presented by an update of its business plan and discussed them with its Board
of Directors. The Board has instructed that once the Chocolate Bayou
negotiations are resolved, management should revise the business plan as
appropriate. Rothschild will then update its preliminary valuation of
reorganized Solutia based on those revisions. We anticipate this can be done
very quickly once the Chocolate Bayou negotiations are concluded. As you may
know, Solutia presented a proposal to Monsanto last week to resolve the
Chocolate Bayou issues and Monsanto has committed to a quick response. No
response has been received as of yet.
Based on the Monsanto/Noteholders' Committee proposal and communications with
other stakeholders and pending any further changes that might be appropriate
as a result of an update of the business plan, Solutia proposes the following
modifications to its April 10th proposal:
o The percentage of Solutia's new common stock to be distributed to
Monsanto will be reduced from 19.1% to 17%.
April 16, 2007
Page 2
o The percentage of Solutia's new common stock to be distributed to
the Noteholders, prior to any effect being given to the proposed
Rights Offering, will increase from 38% to 40.2%.
o Monsanto will receive an administrative claim for the amounts
spent at the shared sites in excess of the $50 million for which
Monsanto is responsible under the Global Settlement and Solutia's
projections of sources and uses may, therefore, require
adjustment.
o All other aspects of the proposal, other than the Rights Offering,
which is discussed immediately below, will remain the same.
In addition to the foregoing, you requested modifications to the Rights
Offering, including a reduction in the size of the Rights Offering and a
decrease to the strike price. Subject to plan feasibility issues, Solutia is
not opposed to these modifications. Accordingly, Solutia believes that the
appropriate structure of the Rights Offering should be negotiated among
Solutia, the Noteholders and the general unsecured creditors, who are the
parties proposed to participate in the Rights Offering.
Solutia believes that substantial progress can be made, and, with cautious
optimism, consensus can be achieved, if the major stakeholders come together
for a follow up settlement meeting. Solutia proposes a meeting among Monsanto,
the Noteholders' Committee, the Creditors' Committee, the ad hoc committee of
trade creditors and the equity committee (the attorneys for the Creditors'
Committee, the ad hoc committee of trade creditors and the equity committee
are copied on this letter), which will be hosted by Kirkland & Ellis LLP, on
Wednesday at 10 a.m. Eastern Time, assuming the Chocolate Bayou negotiations
have concluded, to discuss the modified proposal and engage in good faith
negotiations. We will follow up with you by phone and email to arrange for the
meeting.
Once a date and time for the meeting is scheduled, please email me with a list
of individuals who will be attending the meeting on April 18th as I need to
provide an attendees list to security.
If you have any questions, please feel free to call me.
Very truly yours,
/s/ Jonathan S. Henes
---------------------
Jonathan S. Henes
cma
April 16, 2007
Page 3
cc: Jeffry N. Quinn
Richard M. Cieri
Todd R. Snyder
Daniel Golden
Ira Dizengoff
James Savin
Edward Weisfelner
Steve Pohl
Craig Barbarosh