Dow Chemical Files Motion To Disqualify Rohm & Haas Lawyers

Dow Chemical Co. (DOW) filed a motion late Wednesday to disqualify Rohm & Haas Co.'s (ROH) law firm Wachtell, Lipton, Rosen and Katz from conducting discovery against Dow and examining Dow's witnesses.

Rohm has sued Dow in Delaware Chancery Court to force the completion of Dow's $15.3 billion deal to purchase Rohm, which had been set to close late last month.

Dow said it sought the disqualification from those proceedings because of Wachtell's representation of it in some other matters directly related to the current litigation. The company said it does not seek a blanket disqualification of Wachtell from the case.

A Rohm spokeswoman said Thursday Dow Chemical's motion was a "litigation tactic that has no merit."

Meanwhile, a judge Thursday denied Dow's application to delay the start of a trial on a specific plan for the merger agreement. The trial is due to start March 9 after the Delaware court late last month agreed to handle the case on an expedited basis at Rohm's request, according to the Delaware Law Weekly.

Dow Chemical, the world's third-largest chemicals group by revenue, said earlier this week it could face multiple debt defaults if forced to consummate its proposed acquisition of Rohm before it has stable financing.

Meanwhile, a $1.55 billion fourth-quarter loss highlights the company's continuing exposure to the weakening commodity-chemicals business. That is why it was seeking to spin its basic-chemicals operations into a now-failed joint venture with Kuwait and buy Rohm & Haas, which would get Dow Chemical into higher-margin segments.

Earlier Thursday, hedge fund Paulson & Co. urged Dow Chemical to complete the buyout, saying it could cut its dividend to a nominal 1 cent a share from 42 cents and sell common stock and bonds to pay off the $13 billion in bridge financing needed to complete the deal. Paulson is Rohm & Haas's second-largest shareholder.

Dow's shares were recently down 1.6% at $10.60 and Rohm's were up 1.5% at $54.55.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]