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The finger-pointing began seconds after directors of BCE Inc. were told at an emergency board meeting last Tuesday that the company's long-delayed, $35-billion sale had effectively been killed by a failed solvency test.

“Who is responsible for this mess?” raged one director, according to people familiar with the meeting.

Was it James Morphy, the New York takeover guru at Sullivan & Cromwell LLP who oversaw the legal team that recommended inserting the unusual solvency test into its takeover agreement? What about Susan Glass, the KPMG senior partner who blew the world's smallest whistle on the biggest leveraged buyout by concluding BCE would be insolvent if the debt-heavy takeover by Ontario Teachers' Pension Plan and its partners went ahead?

In their own way, each played a role in the solvency test that has almost certainly derailed the BCE takeover. But maybe that seven-line clause buried within the definitive takeover agreement would not have been a deal killer if BCE's board of directors had played tough rather than nice with its buyers and lenders in June when the deal was set to close. Back then, financial markets were grim, but credit and equity markets had not yet taken the sickening swoon that prompted KPMG last week to conclude that BCE's assets would be worth less than its liabilities after the takeover.

Things were bad enough, however, for Teachers' lenders – Citibank, Deutsche Bank, Royal Bank of Scotland and Toronto-Dominion Bank – to realize that they were facing billions of dollars in loan writedowns. Faced with painful writedowns, the banks sent an emissary to BCE's board of directors to beg for mercy at a June 24 meeting.

The emissary was Jonathan Nelson, chief executive officer of Providence Equity Partners, one of Teachers' partners in the BCE acquisition. Mr. Nelson had just finished several rounds of discussions with the deal's biggest lender, Citibank, and, according to people familiar with the board meeting, he warned BCE's board that they would not lend money until the company agreed to concessions.

The banks, he said, wanted to lend $2-billion less than originally planned, they wanted to charge more interest and they wanted to delay closing for six months until Dec. 11. How did the Boston-based deal maker sell the concessions?

Take it or leave it, he told the board.

At that point, BCE's directors had two choices. They could have sued the banks and hauled them into court for allegedly failing to honour their agreement to finance the takeover. Or, they could agree to wait, hoping and praying that ominous market clouds would be swept away and sunnier times would return by December.

Apparently BCE's board decided there was less risk betting on turbulent markets than launching a messy court battle with some of the world's biggest banks. We now know how wrong they were about the markets. But what about their decision not to call the banks' bluff and challenge them legally to follow through on their financing proposal?

Maybe they would have taken a tougher stand if they had travelled to Woodlands, Tex. There they would have found the flinty 71-year-old founder of a chemical company who has taught some powerful private equity buyers and banks a thing or two about the sanctity of takeover contracts.

“I will fight this until the day I die,” Jon Huntsman said last fall when Apollo Management LP and some of its bankers began to get cold feet about a 2007 agreement to merge its Hexion Specialty Chemicals unit with Huntsman Corp. for $6.5-billion (U.S.).

Like the mega-deal for BCE, the Huntsman deal was a hangover from headier days. It no longer made economic sense and threatened to cost the banks billions of dollars of loan writedowns. Unlike BCE, however, Mr. Huntsman has been ferociously fighting his would-be buyers to force them to live up to their deal.

A long shot? Not so far. Since Mr. Huntsman first began firing legal volleys at Hexion and its backers, he has won some impressive court victories. In September, a Delaware court refused to allow Hexion to walk away from the takeover after he ruled the suitor “knowingly and intentionally” breached parts of the merger agreement.

Facing a potential lawsuit worth billions from Huntsman shareholders, Hexion and its private equity owner, Apollo, rushed to save the deal by throwing more equity on the table. A month later, the takeover went off the rails again, this time because two of Hexion's financiers, Credit Suisse Group and Deutsche Bank AG, began pulling away after they announced that they had concerns about the accuracy of an independent appraiser who concluded the two companies would be solvent.

By the time the banks' balking was over, their commitment to finance Hexion's takeover bid had elapsed. That means Hexion is potentially on the hook to raise the billions in financing needed to save a deal that a Delaware judge had already accused them of breaching.

Last month Hexion tried to dig itself out of its deal hole by suing Credit Suisse and Deutsche Bank for refusing to finance the takeover. The case is set to go to trial Jan. 8 in New York.

Whether the case is settled or tried in court, Mr. Huntsman can be comforted by the knowledge that at the end of the day it's a pretty good bet that either his buyer or lenders will be paying him something for reneging on a takeover deal.