WILMINGTON, Del. (Legal Newsline) – A North Carolina resin manufacturer and its affiliates that have been named in numerous asbestos lawsuits have filed for protection under Chapter 11 bankruptcy in order to address its current and future asbestos liability.
Reichhold Holdings US, Inc. voluntarily filed its petition for relief on Sept. 30 in the United States Bankruptcy Court for the District of Delaware.
Reichhold Holdings is joined by affiliates Reichhold, Inc., Canadyne Corporation and Canadyne-Georgia Corporation – collectively known as the debtors.
“This action was taken to facilitate a restructuring of the debts of Reichhold, Inc., which represents only the U.S. portion of the global Reichhold organization,” the company stated in a release.
The company announced that it has arranged $130 million in financing from its bondholders to fund continuing operations, of which $100 million will be available to Reichhold, Inc., in the form of debtor-in-possession financing if the court approves.
The financing will also be used in part to repay the debtors’ existing secured financing in North American and Europe.
As a result of the bankruptcy, defense attorneys Joanna Drozd and Mark Hsu of the Hawkins, Parnell, Thackston & Young law firm filed a notice of bankruptcy and automatic stay of proceedings in the New York City Asbestos Litigation court, addressing plaintiffs attorneys who have named the debtors as a defendant or third-party defendant.
The Oct. 3 notice explains that according to the Bankruptcy Code, an automatic stay is imposed for all pending and future lawsuits against the debtors.
“[N]o cause of action arising prior to, or relating to the period prior to, the petition date may be commenced or prosecuted against the debtors and no related judgment may be entered or enforced against the debtors outside the bankruptcy court without the bankruptcy court first issuing an order lifting or modifying the automatic stay for such specific purpose,” the notice states.
The Board of Directors of Reichhold, Inc., resolved which actions to take after holding a meeting to discuss the voluntary bankruptcy petition.
It is resolved, “that in the judgment of the board it is desirable and in the best interests of the company, its creditors, stockholders and other interested parties, that the company seek relief under the provisions of Chapter 11, Title 11 of the United States Code,” the directors concluded.
The law firm of Cole, Schotz, Meisel, Forman & Leonard is representing the debtors as general bankruptcy counsel.
The law firm of CDG Group LLC is retained as the financial advisor and investment banker for the debtors.
The Hunton & Williams LLP law firm is retained as special counsel to the debtors to handle environmental and similar issues in relation to the bankruptcy proceeding.
Kelly Garfinkle Strategic Restructuring LLC is employed as special pension advisor to the debtors.
Dickstein Shapiro LLP is retained as special asbestos counsel for the bankruptcy proceedings.
Logan & Company, Inc., is employed to provide the debtors with consulting services, including noticing, claims management and reconciliation and other related matters.
From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com