WILMINGTON, Del. (Legal Newsline) – A manufacturer of roof restoration materials and founder of RPM International, Inc. became the most recent affiliate to enter Chapter 11 bankruptcy protection as part of an $800 million bankruptcy deal announced in July.
On Sept. 1, Republic Powdered Metals filed a motion requesting the United States Bankruptcy Court for the District of Delaware to approve its complaint requesting bankruptcy protection.
Republic joined parent company RPM and affiliates Specialty Products Holdings Corp. and Bondex International after the debtors announced a settlement agreement on July 28, which would resolve all asbestos personal injury claims.
“Republic is filing this adversary proceeding to preserve the status quo and prevent asbestos claimants from pursuing asbestos personal injury claims against the protected parties while it seeks confirmation of a consensual plan of reorganization that, if consummated, would permanently enjoin the pursuit of such claims against the protected parties,” Republic stated.
RPM announced the agreement with the bankruptcy representatives of current and future claimants in order to resolve its Bondex-related asbestos liability.
Bondex manufactured joint compound, which formerly contained chrysotile asbestos, for do-it-yourself home projects.
According to the agreement, RPM would contribute $797.5 million over four years and resolve all present and future asbestos personal injury claims related to Bondex International, Inc.
More specifically, RPM agreed to fund the trust with an initial $450 million in cash upon plan approval. It will then contribute additional contributions of $102.5 million, $120 million and $125 million in cash, RPM stock or both in the following three years.
Bondex’s agreement stemmed from a May 2013 ruling by former U.S. Bankruptcy Judge Judith Fitzgerald, in which she estimated Bondex’s liability at $1.166 billion. However, Bondex argued during the estimation proceedings that its actual liability amounted to $135 million.
RPM appealed the decision to the U.S. Court of Appeals for the Third Circuit, arguing Fitzgerald reached an escalated number by placing too much weight on past settlement agreements. Many of those settlements were reached to push aside nuisance lawsuits, Bondex said.
The appeal was dropped when the agreement was announced.
Following Republic’s request for bankruptcy protection, Bankruptcy Judge Peter J. Walsh filed a Sept. 3 order directing the joint administration of the debtors’ cases for procedural purposes.
The joined cases include Specialty Products, Bondex, Republic and NMBFiL, Inc., a manufacturer of automotive body fillers.
“Parties in interest are directed to use the consolidated caption referring to the chapter 11 cases of Specialty Products Holding Corp. when filing a pleading with the court in the debtors’ chapter 11 cases,” Walsh concluded.
The debtors also requested the court to establish bar dates for filing proofs of claim forms.
The Sept. 5 request specifically lists asbestos personal injury claims as an exception to the bar date, which would allow plaintiffs until mid-November to file the forms with Logan & Company, Inc., if approved.
“In order for the debtors to complete the reorganization process and make distributions under any plan of reorganization confirmed in these cases, the debtors require, among other things, complete and accurate information regarding the nature, validity and amount of claims that will be asserted in these chapter 11 cases,” the bar date request stated.
From Legal Newsline: Reach Heather Isringhausen Gvillo at email@example.com