Metex gets court confirmation of Chapter 11 plan of reorganization

By Kali Hays

New York, June 19 – Metex Mfg. Corp. obtained court confirmation of its plan of reorganization on June 19, according to an attorney familiar with the case.

As previously reported, the plan calls for the establishment of an asbestos personal injury trust under section 524(g) of the Bankruptcy Code and an injunction that will channel all current claims and future demands for asbestos-related personal injury and wrongful death based in whole or in part on the alleged conduct or products of predecessor Kentile Floors, Inc. to the trust.

The trust will be funded with between $182.1 million and $189.75 million to be paid by settling asbestos insurance entities less any sums used to fund the administrative costs of the Chapter 11 case.

On the plan effective date, Metex will issue a $250,000 10-year promissory note to the trust and will release $750,000 from escrow.

A majority of holders of asbestos personal injury claims voted to approve the plan June 3.

Treatment of creditors will include the following:

• Administrative and priority tax claims will be paid in full;

• Holders of priority claims, secured claims, asbestos property damage claims, environmental claims and general unsecured claims will retain the rights to which the claim entitles them;

• Asbestos personal injury claims will be channeled to and resolved by the trust; and

• Equity interests in Metex Mfg. will be unimpaired.

Metex, a Great Neck, N.Y.-based tile manufacturer, filed for bankruptcy on Nov. 9, 2012. Its Chapter 11 case number is 12-14554.

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