Quigley obtains OK to extend DIP loan to Aug. 19; confirmation hearing eyed June 5

By Rebecca Melvin

New York, March 10 - Quigley Co. Inc., a unit of Pfizer Inc., obtained bankruptcy court approval Tuesday to extend its debtor-in-possession financing to Aug. 19 and use cash collateral of up to $45 million.

Also Tuesday, in the U.S. Bankruptcy Court for the Southern District of New York, Quigley approved seven interim fee applications, subject to review at the end of the case.

Quigley counsel Michael Cook of Schulte Roth & Zabel said Quigley hasn't drawn on its DIP facility, which has fees "well below market," and instead funds operations through the use of cash collateral.

Confirmation hearing eyed

Meanwhile, the decks were being cleared to schedule Quigley's long-delayed confirmation hearing and to try objections. A hearing, which has been delayed for more than a year, is eyed on June 5 or soon after, Cook told the court.

Quigley has completed most fact discovery, discovery schedules have been agreed to, a proposed scheduling order was expected to be submitted this week, and a stipulation agreement with Quigley's informal committee of tort victims, which will disallow exchange of medical evidence related to asbestos exposure, is nearly ready for filing, Cook said.

Jeffrey Jonas of Brown Rudnick, counsel for the ad hoc committee of tort victims, agreed that the stipulation was nearly ready and that the committee was expected to withdraw its motion of reconsideration, allowing the parties to proceed to confirmation.

The agreement in principal has to do with the exchange of medical-related evidence.

Aside from the issue relating to the settlements, there are objections relating to whether an ongoing business is feasible and whether Quigley's parent, New York-based Pfizer, acted in good faith or bad faith in putting together the reorganization plan and soliciting votes on the plan.

District court denied the ad hoc committee's motion seeking to have a U.S. district judge hold a joint hearing with the bankruptcy judge on confirmation, which also "clears the decks," Jonas told the court.

Bankruptcy Court judge Stuart Bernstein said he would prefer to separate out voting and good faith issues and try those separately from the expert testimony trial. He didn't yet schedule confirmation.

Quigley, a refractories business, was acquired by Pfizer in 1968. The company exited the refractories business in 1992 when Minteq International Inc. purchased its core assets, the company asserts in filings.

But it retained present and future liabilities arising out of products it sold prior to the asset sale. It continued to manage the asbestos claims process and to recover insurance proceeds for asbestos claimants, the company says.

Of two groups of asbestos victims seeking claims from the company, one has settled with the company and approved the proposed plan and other has not.

Quigley filed for bankruptcy on Sept. 3, 2004. Its Chapter 11 case number is 04-15739.

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