Oglebay Norton toxic tort claimants ask judge not to confirm reorganization plan

By Jeff Pines

Washington, Sept. 22 - Attorneys for Oglebay Norton Co.'s toxic tort claimants asked the U.S. Bankruptcy Court for the District of Delaware not to confirm the company's reorganization and charged Oglebay Norton and its committee of creditors have ignored their clients.

The objection was filed Tuesday by Kelley & Ferraro LLP, Maritime Asbestos Legal Clinic, a division of The Jacques Admiralty Law Firm, Bevan Associates LPA, Baron & Budd P.C. and Silber Pearlman LLP.

According to the attorneys, there are nearly 100,000 toxic tort claimants who sued Oglebay Norton before it filed for bankruptcy. Oglebay Norton is a Cleveland-based minerals company. The claimants allege personal injury from asbestos and silica.

They said the plan provides "generic 'pass-through'" treatment instead of a "concrete, supportable proposal" to resolve and pay these claims.

The toxic tort claimants are in the general unsecured class but would get treated differently than trade creditors in that class, the attorneys said. Under bankruptcy law, groups being treated differently are in different classes.

"These debtors have tried to silence the voices, nearly 100,000 strong, of the tort claimants by burying them in the class of trade creditors yet denying them the same 100% payout that trade creditors would receive," the attorneys said.

The plan calls for the toxic tort claimants not to get any cash but to retain the right to sue the company after the effective date of the plan.

By not dealing with the toxic tort issue, the company is putting off resolving the issue and the issue "could send them (Oglebay Norton and its subsidiaries) right back to bankruptcy court," the attorneys said.

A Sept. 29 hearing is scheduled.

Oglebay Norton filed for bankruptcy on Feb. 23, 2004. Its Chapter 11 case number is 04-10558.

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