Huntsman Corporation has filed suit against Rockwood Holdings, alleging that the company was misleading about its pigment technology during acquisition talks.
Woodlands-based Huntsman bought $1.1 billion in assets from Rockwood in late 2014, including the some of the company’s pigments division.
In a legal complaint, Huntsman says that Rockwood executives lied about the efficacy of its “Bluebird” technology when they said it would “eliminate reliance on Chinese raw materials and allow Huntsman to close numerous inefficient Rockwood pigment plants that Huntsman…would receive in the deal.”
Last year, the CEO of Huntsman said that its pigments division — including parts purchased from Rockwood — had become a drag on the company’s bottom line and that it had plans to spin off a separate pigments and additives business.
The suit from Huntsman names Albemarle — which bought Rockwood in 2015 — as a defendant alongside Rockwood’s former CEO (now the CEO of Air Products) and other Rockwood executives.
The complaint states: “Rockwood misrepresented pigments data to Huntsman and lied about the performance of the Bluebird technology, which Rockwood knew did not work.”
Huntsman representatives said the company would not have made the deal if it would have known about the problems with the Bluebird technology.
Huntsman is hoping for a jury trial and to “restore the parties to the status quo ante, or, to the extent that recession is not feasible, rescissory damages in an amount that will proven at trial.”