… my former company seems to be in more than a little spot of trouble and, as one possible outcome, may declare Chapter 11 bankruptcy. In 2007, Lyondell Chemical Company, a publically-traded U.S.-based company, was purchased by Basell Industries, part of Len Blavatnik’s privately-held Access Industries, for $12.7 billion in debt.

Basell’s bid of $48 per share of Lyondell stock came at the top of the chemical cycle and represented about a 20% premium over the stock price at the time. Lyondell already had a considerable debt load of over $12 billion, so LBI had to finance privately and carry some $26 billion in combined debt.

They might have pulled it off, even in the down part of the cycle, but LBI was also smacked by the rapid rise in oil prices over the Summer, which squeezed margins, the effects of Hurricane Ike, which badly affected production in the Gulf Coast facilities, the credit squeeze, which affected the ability to issue and refinance debt, and the recent economic situation, which has led to a collapse in sales.

What happens next for LBI isn’t going to be pretty. The line animals have already taken two smacks, one with the “synergies” after the merger (to which I was a contributor) and a 15% cutback in the workforce announced in November. This time, at least, the big boys seem to affected as well; betcha their severance isn’t two weeks pay for every year of service.