U.S. Trustee opposes Maremont plan, cites asbestos claim provisions

By Caroline Salls

Pittsburgh, March 5 – The U.S. Trustee overseeing Maremont Corp.’s Chapter 11 case objected to the company’s pre-packaged plan of reorganization and related disclosure statement, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

Acting Region 3 U.S. trustee Andrew R. Vara said despite a “landmark” 2014 decision in Garlock Sealing Technologies, LLC’s Chapter 11 case that “exposed what a bankruptcy court described as a ‘startling pattern of misrepresentation’ in asbestos litigation by claimants to trusts established under section 524(g) of the Bankruptcy Code,” Maremont’s plan “follows the same troubling templates as the pre-Garlock cases that have led to widespread abuse.”

When Maremont’s plan deviates from the earlier templates, Vara said “it does so by providing less transparency to the claims process and less accountability for the trust and its fiduciaries by making the claims process susceptible to manipulation.”

In addition, the U.S. Trustee said the Maremont plan shields alleged wrongdoers from the consequences of their actions by limiting discovery in future litigation between non-debtors.

Vara said the plan has not been filed in good faith because it includes provisions that benefit attorneys and other non-creditors.

Meritor, Inc. is a Troy, Mich.-based global supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets. Its Maremont unit filed bankruptcy on Jan. 22 under Chapter 11 case number 19-10118.

© 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.