Maremont Chapter 11 plan confirmation order affirmed by district court

By Caroline Salls

Pittsburgh, July 5 – Maremont Corp.’s Chapter 11 plan confirmation order has been affirmed by the U.S. District Court for the District of Delaware.

As previously reported, the plan was confirmed on May 17 by the U.S. Bankruptcy Court for the District of Delaware.

Maremont parent company Meritor, Inc. said when the subsidiary filed bankruptcy that the plan is intended to permanently resolve all current and future asbestos claims through the creation of a trust under Section 524(g) of the Bankruptcy Code.

Under the plan, Maremont will fund a trust to address its current and future asbestos claims and permanently prohibit any future lawsuits related to those claims.

Funding for the 524(g) trust will consist of a $28 million contribution by Meritor, together with a contribution of Maremont’s remaining assets, including roughly $21 million in cash and intercompany loan receivables less some amounts needed to pay for the administrative costs of the Chapter 11 cases, as well as its remaining insurance assets.

All claims other than asbestos claims against Maremont and its subsidiary debtors will be paid in full or reinstated.

Meritor’s equity interests in Maremont will be canceled. The 524(g) trust will own 100% of the equity interests in reorganized Maremont.

The district court order said the Maremont debtors are immediately authorized to proceed with implementation of the plan and establishment of the asbestos personal injury trust.

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

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