Pd-4(OEB)(2), in which a [Pd-2](2+) unit is bound in pi -fashion to olefinic sites that are exocyclic, to pyrrole rings of the octaethylbilindione ligand, undergoes an unprecedented sequence of reactions that results, in the rearrangement of the framework of the bilindione ligand and the formation of trans-Pd(py)(2)I-2. This process of bilindione. rearrangement and oxidation occurs as a direct consequence of the pi -coordination of the palladium. The reaction results in the migration of a nitrogen atom from a pyrrole carbon atom to what was formerly a meso carbon atom to transform a former pyrrole ring into a six-membered ring. This process also involves cleavage of the Pd-Pd and Pd-C bonds, oxidation of palladium, and introduction of an oxygen atom (from water) not necessarily in this particular sequence.