Specialty Products submits plan based on asbestos claims agreement

By Caroline Salls

Pittsburgh, Sept. 29 – Specialty Products Holding Corp. filed a plan of reorganization and related disclosure statement Sept. 29 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Specialty Products reached a settlement with parent RPM International Inc., subsidiary Bondex International, Inc. and official representatives of current and future asbestos claimants to resolve all present and future asbestos personal injury claims related to Bondex, Specialty Products and the other related entities through a plan of reorganization.

The plan will be subject to approval of the claimants, as well as the bankruptcy court and the U.S. District Court for the District of Delaware.

The agreement requires the creation and funding of a trust established under section 524(g) of the Bankruptcy Code for the benefit of current and future asbestos personal injury claimants.

Upon effectiveness of the plan, the trust will be funded with $447.5 million in cash and one or more promissory notes, bearing no interest and maturing on or before the fourth anniversary of the effective date.

An additional $102.5 million in cash, common stock or a combination of the two will be contributed on or before the second anniversary of the plan effective date; an additional $120 million in cash, common stock or a combination of the two will be contributed on or before the third effective date anniversary; and a final payment of $125 million in cash, common stock or a combination of the two will be contributed on or before the fourth effective date anniversary.

In addition to Bondex and Specialty Partners, the settlement resolves all present and future asbestos personal injury claims related to RPM indirect subsidiaries Republic Powdered Metals, Inc. and NMBFil, Inc.

A total of $2.45 million of the trust funding is related to NMBFil asbestos personal injury claims, which are the subject of a separate settlement term sheet.

Treatment of creditors will include the following:

• Priority claims and general unsecured claims will be paid in full in cash plus post-bankruptcy interest;

• Secured claims will either be paid in full in cash plus post-bankruptcy interest or be reinstated;

• Asbestos personal injury claims will be channeled to the asbestos trust;

• Intercompany claims will be reinstated; and

• Stock interests will be reinstated, and holders will retain their interests.

Specialty Products is a subsidiary of RPM International Inc., a Medina, Ohio-based producer of specialty chemicals. The subsidiary filed for bankruptcy on May 31, 2010 under Chapter 11 case number 10-11780.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.