Presentment Date: April 30, 2010 at 12:00 p.m. (ET) Objection Deadline: April 23, 2010 at 4:00 p.m. (ET)

Richard M. Cieri M. Natasha Labovitz Craig A. Bruens KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

) In re: ) Chapter 11 ) CHEMTURA CORPORATION, et al.,1 ) Case No. 09-11233 (REG) ) Debtors. ) Jointly Administered )

DEBTORS’ MOTION FOR AN ORDER AUTHORIZING CHEMTURA CORPORATION TO ENTER INTO A SETTLEMENT

OF PENDING SECURITIES CLASS ACTION LAWSUIT

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal taxpayer-

identification number, are: Chemtura Corporation (3153); A&M Cleaning Products, LLC (4712); Aqua Clear Industries, LLC (1394); ASCK, Inc. (4489); ASEPSIS, Inc. (6270); BioLab Company Store, LLC (0131); BioLab Franchise Company, LLC (6709); Bio-Lab, Inc. (8754); BioLab Textile Additives, LLC (4348); CNK Chemical Realty Corporation (5340); Crompton Colors Incorporated (3341); Crompton Holding Corporation (3342); Crompton Monochem, Inc. (3574); GLCC Laurel, LLC (5687); Great Lakes Chemical Corporation (5035); Great Lakes Chemical Global, Inc. (4486); GT Seed Treatment, Inc. (5292); HomeCare Labs, Inc. (5038); ISCI, Inc. (7696); Kem Manufacturing Corporation (0603); Laurel Industries Holdings, Inc. (3635); Monochem, Inc. (5612); Naugatuck Treatment Company (2035); Recreational Water Products, Inc. (8754); Uniroyal Chemical Company Limited (Delaware) (9910); Weber City Road LLC (4381); and WRL of Indiana, Inc. (9136).

Table of Contents

Jurisdiction .....................................................................................................................................1

Basis for Relief ................................................................................................................................2

A. The Securities Action and the Prepetition Settlement .............................................2

B. Chemtura’s Chapter 11 Filing and the Prepetition Transfers ..................................3

C. The Amended Settlement Stipulation ......................................................................3

Relief Requested .............................................................................................................................5

Supporting Authority ....................................................................................................................6

A. The Court Has the Authority to Approve the Settlement Stipulation. .....................6

B. Chemtura Has Met Its Burden For approval of the Settlement Stipulation .............8

C. Cause Exists to Modify the Automatic Stay and the Court Should Authorize the Funding of the Settlement Amount with the Proceeds of the D&O Insurance Policy ...........................................................................................10

Motion Practice ............................................................................................................................11

Table of Auhorities

Cases

Committee of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063 (2d Cir. 1983) ..................................................................................................... 8

In re Adelphia Commc’ns Corp., 327 B.R. 143 (Bankr. S.D.N.Y. 2005) ........................................................................................ 7

In re Carla Leather, Inc., 44 B.R. 457 (Bankr. S.D.N.Y. 1984) .......................................................................................... 7

In re Global Crossing Ltd., 295 B.R. 726 (Bankr. S.D.N.Y. 2003) ........................................................................................ 8

In re Hibbard Brown & Co., Inc., 217 B.R. 41 (Bankr. S.D.N.Y. 1998) .......................................................................................... 6

In re Ionosphere Clubs, Inc., 156 B.R. 414 (S.D.N.Y. 1993) .................................................................................................... 8

In re Iridium Operating LLC, 478 F.3d 452 (2d Cir. 2007) ................................................................................................... 8, 9

In re W.T. Grant Co., 699 F.2d 599 (2d Cir. 1983) ....................................................................................................... 7

Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139 (2d Cir. 1999) ..................................................................................................... 11

Nellis v. Shugrue, 165 B.R. 115 (S.D.N.Y. 1994) .................................................................................................... 6

Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346 (3d Cir. 1999) ....................................................................................................... 8

Protective Comm. for Indep. S’holders of TMT Trailer Ferry Inc. v. Anderson, 390 U.S. 414 (1968) .................................................................................................................... 7

See Vaughn v. Drexel Burnham Lambert Group, Inc. (In re Drexel Burnham Lambert Group, Inc.), 134 B.R. 499 (Bankr. S.D.N.Y. 1991) ........................................................................................ 6

Sonnax Indus. v. TriComponent Prods. Corp. (In re Sonnax Indus.), 907 F.2d 1280 (2d. Cir. 1990) .................................................................................................. 11

Statutes

11 U.S.C. § 362(a) ........................................................................................................................ 11

11 U.S.C. § 362(d)(1) ................................................................................................................... 11

28 U.S.C. § 1334 ............................................................................................................................. 1

28 U.S.C. § 1408 ............................................................................................................................. 1

ii

28 U.S.C. § 1409 ............................................................................................................................. 1

28 U.S.C. § 157 ............................................................................................................................... 1

28 U.S.C. § 157(b)(2) ..................................................................................................................... 1

The above-captioned debtors and debtors in possession (collectively, the “Debtors”) seek

entry of an order, substantially in the form attached hereto as Exhibit A, authorizing Chemtura

Corporation, f/k/a Crompton Corporation (“Chemtura”), to enter into an Amended Stipulation

and Agreement of Settlement (the “Settlement Stipulation”),1 dated as of April 13, 2010, which

supersedes and terminates a Stipulation and Agreement of Settlement, dated as of November 28,

2008 (the “Prepetition Settlement”), and provides for the full and final compromise and

settlement of all claims asserted against Chemtura and all individual defendants in the

Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws filed

on July 20, 2004 by Pierre Brull and William Ashe (the “Lead Plaintiffs”) in the action styled as

In re Crompton Corp. Securities Litigation, No. 3:03-CV-1293 (EBB) (the “Securities Action”)

in the District Court for the District of Connecticut (the “Connecticut District Court”). The

Settlement Stipulation will allow the Debtors to resolve the prepetition litigation against

Chemtura and all of the current and former officers and directors named as defendants in the

Securities Action solely through the payment of funds from insurance and will not prejudice any

of the Debtors’ stakeholders. In support of this motion, the Debtors respectfully state as follows:

Jurisdiction

1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The bases for the relief requested herein are sections 362(d) and 363(b) of title 11

of the United States Code (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”).

1 A copy of the Settlement Stipulation is annexed hereto as Exhibit 1 to Exhibit A

2

Basis for Relief

A. The Securities Action and the Prepetition Settlement

4. The Securities Action was filed against Chemtura and certain individual

defendants. The Lead Plaintiffs’ complaint alleged, among other things, that during the period

between October 26, 1998 and October 8, 2002 (the “Class Period”), Chemtura and the other

co-defendants issued materially false and misleading statements concerning Chemtura’s reported

financial results, competition, pricing, sales and margins, and that other individual defendants

breached their fiduciary duties to Witco Corporation’s (“Witco”) shareholders by causing Witco

to enter into a transaction with Crompton & Knowles Corporation based on Crompton &

Knowles Corporation’s false and misleading financial statements.

5. In August 2006, the Lead Plaintiffs, Chemtura and the other co-defendants

(together, the “Parties”) entered into mediation before Judge Daniel Weinstein. Following the

mediation and continued telephonic negotiations, the Parties agreed to settle the Securities

Action for the payment of $20,650,000 (the “Original Settlement Amount”) under the terms of

the Prepetition Settlement.

6. Pursuant to the Prepetition Settlement, Chemtura made payments on December

23, 2008 and January 26, 2009 totaling $9,292,500 in relation to the Original Settlement Amount

(the “Prepetition Transfers”) to Murray Frank & Sailer LLP and Barroway Topaz Kessler

Meltzer & Check, LLP as counsel to the Lead Plaintiffs and escrow agents (the “Escrow

Agents”) to be held in escrow under the Prepetition Settlement pending final court approval of

the Prepetition Settlement.2

2 The remaining balance of the Original Settlement Amount was paid to the Escrow Agents by American

Insurance Group (“AIG”).

3

B. Chemtura’s Chapter 11 Filing and the Prepetition Transfers

7. On March 18, 2009, the Debtors, including Chemtura, filed with this Court

voluntary petitions for relief under chapter 11 of the Bankruptcy Code. After the chapter 11

filing, Chemtura, by letter to the Escrow Agents dated June 23, 2009, demanded the return of the

Prepetition Transfers asserting that they were recoverable as preferential payments pursuant to

section 547 of the Bankruptcy Code.

8. Following arm’s-length negotiations, Chemtura and the Escrow Agents reached

an agreement for the return of the Prepetition Transfers to Chemtura in the form of a stipulation

and agreed order, which was approved by the Court on October 28, 2009 [Docket No. 1347].

The Prepetition Transfers were returned to Chemtura shortly thereafter.

C. The Amended Settlement Stipulation

9. Since the return of the Prepetition Transfers, the Parties have continued to engage

in discussions concerning a renegotiation of the Prepetition Settlement of the Securities Action.

Following arm’s-length negotiations, the Parties reached a revised agreement regarding the

settlement of the Securities Action and have entered into the Settlement Stipulation subject to the

approvals from this Court and the Connecticut District Court.3

10. Pursuant to the Settlement Stipulation, the defendants have paid $11,357,500 (the

“Settlement Amount”) from Chemtura’s insurance into an interest-bearing account (the

“Escrow Account”) established on behalf of Lead Plaintiffs and the members of the Class.4

3 The Settlement Stipulation will be of no force and effect unless and until receiving such approvals from this

Court and the Connecticut District Court.

4 For the purpose of the Settlement Stipulation, “Class” means all persons and entities who purchased or otherwise acquired the securities of Chemtura during the period between October 26, 1998 and October 8, 2002, inclusive, including without limitation all persons and entities that purchased or otherwise acquired Chemtura securities pursuant to the merger between Crompton & Knowles Corporation and Witco Corporation and who were damaged thereby. Furthermore, the Escrow Account includes interest that has been earned on the funds deposited, which also will be paid to the Class.

4

Additionally, pursuant to the Settlement Stipulation, the Lead Plaintiffs and members of the

Class will release and forever discharge Chemtura (and the other co-defendants), and will be

forever enjoined from prosecuting, any and all claims and rights arising out of, connected with,

or in any way relating to, the subject matters of the Securities Action, the merger of Crompton &

Knowles Corporation and Witco Corporation, and the purchase, acquisition, or sale of Chemtura

securities during the Class Period. Co-Lead Counsel to the Lead Plaintiffs and the Class will

withdraw with prejudice Proof of Claim Number 10757 filed against Chemtura asserting an

unsecured secured claim for $9,292,500 based upon the return of the Prepetition Transfers, Proof

of Claim Number 10766 in an unliquidated amount and, on behalf of William Ashe, Proof of

Claim Number 10833 filed against Chemtura in the amount of $1,007,582.97. In addition,

provided there are no class members who opt out of the settlement, counsel for defendant Peter

Barna will withdraw with prejudice Proof of Claim Number 6305 filed against Chemtura in an

unliquidated amount. The Settlement Stipulation is contingent on this Court’s authorization to

allow Chemtura to enter into the Settlement Stipulation and granting of relief from the automatic

stay, to the extent necessary, to use the proceeds of the Executive and Organization Liability

Insurance Policy (“D&O Insurance Policy”) to fund the Settlement Amount.

11. Crompton Corporation n/k/a Chemtura Corporation is a named insured under a

D&O Insurance Policy issued by National Union Fire Insurance Company of Pittsburgh, PA,

which provides coverage for the Securities Action and one additional lawsuit, a settled derivative

class action. Specifically, the D&O Insurance Policy has a $25,000,000 coverage limit in excess

of a self-insured retention of $1,000,000 and is a “claims made” policy covering the period from

September 1, 2002 to September 30, 2003. Aside from the Securities Action, only one other

5

claim was asserted against the D&O Insurance Policy during the applicable policy reporting

period.5 The D&O Insurance Policy is thus not available for any other claims.

12. The Settlement Stipulation was negotiated with the Lead Plaintiffs in consultation

with Chemtura’s insurance provider and entered into after consultation with the Debtors’

statutory committees of unsecured creditors and equity security holders. The Settlement

Stipulation results from Chemtura’s evaluation of the merits of the Securities Action and its

weighing of the costs of challenging the Securities Action at trial. In particular, Chemtura has

determined that the benefits of the settlement, including the unnecessary cost, expense and

distraction that would be incurred in challenging the Securities Action and all discovery related

thereto, outweigh proceeding with the trial at this time. Further, Chemtura believes that lifting

the automatic stay, to the extent necessary, to allow the Connecticut District Court to implement

the Settlement Stipulation and to allow for the payment of the Settlement Fund from the D&O

Insurance Policy proceeds is necessary to allow Chemtura to perform all obligations under the

Settlement Stipulation.

Relief Requested

13. The Debtors seek entry of an order, pursuant to sections 362(d) and 363(b) of the

Bankruptcy Code and Bankruptcy Rule 9019, authorizing Chemtura to enter into the Settlement

Stipulation and modifying the automatic stay, to the extent necessary, to allow the Connecticut

5 The other claim under the Policy related to the derivative class action lawsuit captioned Janet Fina, Individually

and Derivatively on Behalf of Nominal Defendant, Crompton Corporation v. Vincent A. Calarco, Roger L. Headrick, Patricia Woolf, Leo I. Higdon, C.A. (Lance) Piccolo, Bruce F. Wesson, and Robert A. Fox, and Nominal Defendant Crompton Corporation, Docket No. X01 CV 03-0180263S in the Superior Court for the Judicial District of Waterbury, Connecticut. The Debtors settled that action last year during these chapter 11 cases. This Court entered on August 13, 2009, the Order Approving Debtors’ Motion for an Order Authorizing Chemtura Corporation to Enter into Settlement Agreements with Janet Fina, Certain Individuals and AIG [Docket No. 925].

6

District Court to implement the settlement agreement and to allow the use of the D&O Insurance

Policy proceeds to fund the Settlement Amount.

Supporting Authority

A. The Court Has the Authority to Approve the Settlement Stipulation.

14. Pursuant to Bankruptcy Rule 9019, bankruptcy courts can approve a compromise

or settlement if it is in the best interest of the estate. See Vaughn v. Drexel Burnham Lambert

Group, Inc. (In re Drexel Burnham Lambert Group, Inc.), 134 B.R. 499, 505 (Bankr. S.D.N.Y.

1991). The settlement need not result in the best possible outcome for the debtor, but must not

“fall below the lowest point in the range of reasonableness.” Id. The decision to accept or reject

a compromise or settlement is within the sound discretion of the bankruptcy court. Nellis v.

Shugrue, 165 B.R. 115, 121-122 (S.D.N.Y. 1994); Drexel Burnham Lambert Group, 134 B.R. at

505; see also In re Hibbard Brown & Co., Inc., 217 B.R. 41, 46 (Bankr. S.D.N.Y. 1998)

(bankruptcy court may exercise its discretion “in light of the general public policy favoring

settlements”); 9 Collier on Bankruptcy ¶ 9019.02 (15th ed. rev. 2008).

15. In exercising its discretion, the bankruptcy court must make an independent

determination that the settlement is fair and equitable. Protective Comm. for Indep. S’holders of

TMT Trailer Ferry Inc. v. Anderson, 390 U.S. 414, 424 (1968); Shugrue, 165 B.R. at 122. That

does not mean that the bankruptcy court should substitute its judgment for the debtor’s judgment.

In re Carla Leather, Inc., 44 B.R. 457, 465 (Bankr. S.D.N.Y. 1984). Instead, a bankruptcy court

should “canvass the issues and see whether the settlement ‘fall[s] below the lowest point in the

range of reasonableness.” In re W.T. Grant Co., 699 F.2d 599, 608 (2d Cir. 1983). Put

differently, the court does not need to conduct a “mini-trial” of the facts and merits underlying

the dispute; it only needs to be apprised of those facts that are necessary to enable it to evaluate

7

the settlement and to make a considered and independent judgment about the settlement. See In

re Adelphia Commc’ns Corp., 327 B.R. 143, 159 (Bankr. S.D.N.Y. 2005).

16. To evaluate whether a settlement is fair and equitable, courts in the Second

Circuit consider factors including:

• the balance between any litigation’s possibility of success and the settlement’s future benefits;

• the likelihood of complex and protracted litigation, with its attendant expense, inconvenience, and delay;

• the paramount interests of the creditors, including each affected class’s relative benefits and the degree to which creditors either do not object to or affirmatively support the proposed settlement;

• whether other parties in interest support the settlement;

• the competency and experience of counsel supporting the settlement; and

• the extent to which the settlement is the product of arm’s-length bargaining.

See In re Iridium Operating LLC, 478 F.3d 452, 462 (2d Cir. 2007); see also In re Ionosphere

Clubs, Inc., 156 B.R. 414, 428 (S.D.N.Y. 1993).

17. Finally, in many instances, settlements and compromises under Bankruptcy Rule

9019 are considered to be a sale of property of the estate. See Northview Motors, Inc. v. Chrysler

Motors Corp., 186 F.3d 346, 350-51 (3d Cir. 1999). As such, approval of a settlement that is

outside of the ordinary course of business of the debtor should be granted pursuant to section

363(b) of the Bankruptcy Code if it is within the exercise of the debtor’s sound business

judgment. See Committee of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d

1063, 1070 (2d Cir. 1983); see also In re Global Crossing Ltd., 295 B.R. 726, 743 (Bankr.

S.D.N.Y. 2003) (stating that judicial approval under section 363 of the Bankruptcy Code requires

a showing that there is a good business reason).

8

B. Chemtura Has Met Its Burden For approval of the Settlement Stipulation

18. As described below, application of the Iridium factors demonstrates that the

Settlement Agreements are fair, reasonable and in the best interests of Chemtura’s estate.

19. First, the Settlement Stipulation will benefit Chemtura’s estate. The Securities

Action involves one of Chemtura’s current directors and officers. The Settlement Stipulation

will, among other things, ensure that the time, attention and focus of that individual can be

appropriately directed to the Debtors’ restructuring efforts, rather than the Securities Action.

Indeed, such a distraction for the individual defendant could prove detrimental to the Debtors’

restructuring. In addition, under the Settlement Stipulation, the Lead Plaintiffs and members of

the Class will release and forever discharge Chemtura, and will be forever enjoined from

prosecuting, any and all claims and rights arising out of, connected with, or in any way relating

to, the subject matters of the Securities Action, the merger of Crompton & Knowles Corporation

and Witco Corporation, and the purchase, acquisition, or sale of Chemtura securities during the

Class Period. In this regard, the Settlement Stipulation also provides for the withdrawal with

prejudice of the Lead Plaintiffs’ and certain other parties’ proofs of claim filed against Chemtura.

20. Second, absent entry into the Settlement Stipulation, Chemtura could be faced

with litigation and expense. While the Securities Action is stayed as to Chemtura, the action is

not stayed as to the other defendants. Absent settlement, Chemtura would be potentially faced

with extensive discovery relating to the claims against the other defendants and would possibly

move to extend the automatic stay. Therefore, the Settlement Stipulation will permit the Debtors

to avoid the cost, risk and distraction that would be incurred in challenging the Securities Action

and discovery related thereto.

21. Third, the Settlement Stipulation will not prejudice Chemtura’s creditors. Entry

into the Settlement Agreements will allow Chemtura to ensure that no additional expense need

9

be spent on the Securities Action while resolving the litigation quickly. Further, the payment of

the Settlement Amount from D&O insurance proceeds, and relief related thereto, will not deplete

assets of the estate that are generally available for other creditors. As discussed above, the D&O

Insurance Policy is a “claims made” policy that expired in September 2003. Because the

Securities Action is the only remaining claim that was made against the policy before the

expiration of the claim period, the policy’s proceeds can only be used to satisfy the defense

and/or settlement costs related to that claim.

22. Fourth, Chemtura has entered into the Settlement Stipulation in consultation with

counsel to both the statutory committee of unsecured creditors appointed in these chapter 11

cases and the statutory committee of equity security holders and believes that both committees

support Chemtura’s entry into the Settlement Stipulation.

23. Lastly, the Settlement Stipulation is the product of arm’s-length negotiations

between Chemtura, the Lead Plaintiffs and the other co-defendants and is a direct result of good-

faith negotiations. The Settlement Stipulation was negotiated with the aid of knowledgeable and

competent counsel with significant experience in securities and restructuring matters, including

O’Melveny & Myers LLP, who has been representing Chemtura in connection with the

Securities Action, and Kirkland & Ellis, LLP, as restructuring counsel to the Debtors. Thus, this

factor also weighs in favor of approval of the Settlement Stipulation.

24. In light of these considerations, Chemtura respectfully submits that settling the

Securities Action and entering into the Settlement Stipulation is within its sound business

judgment and is in the best interests of its estate and creditors.

10

C. Cause Exists to Modify the Automatic Stay and the Court Should Authorize the Funding of the Settlement Amount with the Proceeds of the D&O Insurance Policy

25. Under section 362 of the Bankruptcy Code, the filing of a chapter 11 petition

“operates as a stay, applicable to all entities,” of certain actions taken against the debtor or the

property of the estate. 11 U.S.C. § 362(a). However, section 362(d)(1) of the Bankruptcy Code

provides that a court may modify the automatic stay for “cause.” See 11 U.S.C. § 362(d)(1).

“Cause” is not defined in the Bankruptcy Code. Relevant factors in deciding whether relief from

the automatic stay is warranted include: “(1) whether relief would result in partial or complete

resolution of the issues; (2) whether litigation in another forum would prejudice the interests of

other creditors; (3) the interests of judicial economy and the expeditious and economical

resolution of litigation; and (4) [the] impact of the stay on the parties and the balance of the

harms.” Sonnax Indus. v. TriComponent Prods. Corp. (In re Sonnax Indus.), 907 F.2d 1280,

1285-87 (2d. Cir. 1990). Not all of the Sonnax factors will be relevant in a given case, and the

Court may disregard irrelevant factors. See Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139,

143 (2d Cir. 1999) (remanding with instructions to apply the Sonnax factors and noting that not

all of the factors may be relevant).

26. In this case, as further described above, the relevant Sonnax factors weigh heavily

in favor of modifying the automatic stay to allow the Connecticut District Court to implement

the Settlement Stipulation and to allow Chemtura to fund the Settlement Amount from the

insurance. First, allowing the Connecticut District Court to proceed with the Securities Action

for purposes of implementing the Settlement Stipulation and allowing Chemtura to enter into the

Settlement Stipulation and fund the Settlement Amount from the insurance are both necessary

steps for the effectiveness of the Settlement Stipulation, which will fully resolve the Securities

Action in an expeditious manner. Second, for the reasons set forth above, the Settlement

11

Stipulation will not prejudice the interest of Chemtura’s creditors and, in fact, is in the best

interests of Chemtura’s estate. Third, in light of the foregoing, the balance of harms weighs in

favor of lifting the automatic stay.

27. Accordingly, for the reasons set forth herein, Chemtura respectfully requests that

this Court authorize Chemtura to enter into the Settlement Stipulation and modify the automatic

stay, to the extent necessary, to allow for the Connecticut District Court to implement the

Settlement Stipulation and to allow the insurance proceeds to fund the Settlement Amount.

Motion Practice

28. This motion includes citations to the applicable rules and statutory authorities

upon which the relief requested herein is predicated, and a discussion of their application to this

motion. Accordingly, the Debtors submit that this motion satisfies Local Rule 9013-1(a).

Notice

29. The Debtors have provided notice of this motion to: (a) the Office of the United

States Trustee for the Southern District of New York; (b) counsel to the statutory committee of

unsecured creditors appointed in these chapter 11 cases; (c) proposed counsel to the official

committee of equity security holders appointed in these chapter 11 cases; (d) counsel to the agent

for the Debtors’ prepetition secured credit facility; (e) the indenture trustee for each of the

Debtors’ outstanding bond issuances; (f) the Internal Revenue Service; (g) the Environmental

Protection Agency; (h) the Securities and Exchange Commission; (i) counsel to the Lead

Plaintiffs and Class; (j) counsel to co-defendants; and (k) all those persons and entities that have

formally requested notice by filing a written request for notice, pursuant to Bankruptcy Rule

2002 and the Local Bankruptcy Rules. In light of the nature of the relief requested, the Debtors

respectfully submit that no further notice is necessary. Consistent with the Order Establishing

12

Procedures for Settlement of Claims [Docket No. 1832] entered by this Court on January 27,

2010, the Debtors are filing this motion on 14 days presentment.

13

WHEREFORE, for the reasons set forth herein, the Debtors respectfully request

that the Court (a) enter an order, substantially in the form annexed hereto as Exhibit A,

authorizing the Debtors to enter into the Settlement Stipulation relating to the settlement of the

Securities Action and (b) grant such other and further relief as is just and proper.

New York, New York /s/ M. Natasha Labovitz Dated: April 16, 2010 Richard M. Cieri

M. Natasha Labovitz Craig A. Bruens

KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022-4611 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 Counsel to the Debtors

and Debtors in Possession

Exhibit A

Proposed Order

Presentment Date: April 30, 2010 at 12:00 p.m. (ET) Objection Deadline: April 23, 2010 at 4:00 p.m. (ET)

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

) In re: ) Chapter 11 ) CHEMTURA CORPORATION, et al.,1 ) Case No. 09-11233 (REG) ) Debtors. ) Jointly Administered )

ORDER AUTHORIZING CHEMTURA CORPORATION TO ENTER INTO AN SETTLEMENT STIPULATION AND

AGREEMENT OF SETTLEMENT REGARDING THE SECURITIES ACTION IN THE CONNECTICUT DISTRICT COURT

Upon the motion (the “Motion”)2 of Chemtura Corporation (“Chemtura”) and its

affiliated debtors and debtors in possession in the above-captioned chapter 11 cases (collectively,

the “Debtors”) for entry of an order pursuant to sections 362(d) and 363(b) of title 11 of the

United States Code (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of Bankruptcy

Procedures (the “Bankruptcy Rules”) authorizing Chemtura to enter into an Amended

Settlement Stipulation and Agreement of Settlement (the “Settlement Stipulation”) which

supersedes and terminates the Stipulation and Agreement of Settlement, dated as of November

28, 2008, and provides for the full and final compromise and settlement of all claims asserted in

the Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal taxpayer-

identification number, are: Chemtura Corporation (3153); A&M Cleaning Products, LLC (4712); Aqua Clear Industries, LLC (1394); ASCK, Inc. (4489); ASEPSIS, Inc. (6270); BioLab Company Store, LLC (0131); BioLab Franchise Company, LLC (6709); Bio-Lab, Inc. (8754); BioLab Textile Additives, LLC (4348); CNK Chemical Realty Corporation (5340); Crompton Colors Incorporated (3341); Crompton Holding Corporation (3342); Crompton Monochem, Inc. (3574); GLCC Laurel, LLC (5687); Great Lakes Chemical Corporation (5035); Great Lakes Chemical Global, Inc. (4486); GT Seed Treatment, Inc. (5292); HomeCare Labs, Inc. (5038); ISCI, Inc. (7696); Kem Manufacturing Corporation (0603); Laurel Industries Holdings, Inc. (3635); Monochem, Inc. (5612); Naugatuck Treatment Company (2035); Recreational Water Products, Inc. (8754); Uniroyal Chemical Company Limited (Delaware) (9910); Weber City Road LLC (4381); and WRL of Indiana, Inc. (9136).

2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.

2

filed on July 20, 2004 by Pierre Brull and William Ashe in the action styled as In re Crompton

Corp. Securities Litigation, No. 3:03-CV-1293 (EBB) (the “Securities Action”) in the District

Court for the District of Connecticut (the “Connecticut District Court”), a copy of which is

annexed hereto as Exhibit 1; and it appearing that the Settlement Stipulation is fair and equitable,

and that the relief requested is in the best interests of the Debtors’ estates, their creditors and

other parties in interest; and the Court having jurisdiction to consider the Motion and the relief

requested therein pursuant to 28 U.S.C. §§ 157 and 1334; and consideration of the Motion and

the relief requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue

being proper before this court pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper

notice of the Motion having been provided, and it appearing that no other or further notice need

be provided; and any objections to the Motion having been withdrawn or overruled on the

merits; and after due deliberation and sufficient cause appearing therefor, it is ORDERED that:

1. The Motion is granted.

2. Pursuant to sections 362(d) and 363(b) of the Bankruptcy Code and Bankruptcy

Rule 9019, Chemtura is authorized to enter into the Settlement Stipulation and to take such steps

as may be necessary to implement and effectuate the terms of this Order and the Settlement

Stipulation.

3. The automatic stay is modified to allow for the payment of $11,357,500 from the

D&O Insurance Policy proceeds into an interest-bearing account established on behalf of Lead

Plaintiffs and the members of the Class pursuant to the terms of the Settlement Stipulation;

provided, further, that the automatic stay is modified to allow the Connecticut District Court to

schedule and conduct a hearing for consideration of final approval of the Settlement Stipulation

and to implement the Settlement Stipulation; provided, however, that in the event that the

3

Settlement Stipulation is not approved by the Connecticut District Court the Securities Action

shall remain subject to the automatic stay as provided by section 362(a) of the Bankruptcy Code

solely as to the Debtor.

4. Notwithstanding the relief granted herein and any actions taken hereunder,

nothing contained herein or in the Settlement Stipulation shall constitute, nor is it intended to

constitute, the assumption or assignment of any contract or agreement pursuant to section 365 of

the Bankruptcy Code.

5. The Debtors are authorized to execute and deliver all instruments and documents,

and take such other action as may be necessary or appropriate to implement and effectuate the

transactions contemplated by this Order.

6. The Court shall retain jurisdiction with respect to any matters, claims, rights or

disputes arising from or related to the implementation of this Order.

New York, New York Date: _______________, 2010 Honorable Robert E. Gerber

United States Bankruptcy Judge

Exhibit 1

Settlement Stipulation