The official committee representing creditors with asbestos claims against Garlock Sealing Technologies LLC will urge its constituents to vote against the company’s reorganization plan, even though Garlock said it pays claimants in full.
The official representative of future asbestos claimants, on the other hand, has no opposition to disclosure materials explaining the plan, although he hasn’t taken a position as yet on the merits.
The official claimants’ committee also filed papers at the end of last week opposing approval of the disclosure statement and procedures for soliciting votes.
The plan, according to Garlock, is based on a finding by the bankruptcy judge in January that $125 million is a “reasonable and reliable estimate” of Garlock’s total liability to pending and future mesothelioma claimants. Garlock filed a revised plan of reorganization in May providing more than $275 million for asbestos claimants.
The current claimants’ committee said its constituents should get to vote because the $275 million won’t cover claims in full, no matter what the judge said. The committee also took issue with voting procedures, which it described as a means for objecting to the validity of claims.
Garlock can file papers in support of its position on Sept. 24. The bankruptcy judge will hold a hearing on Oct. 7 and 8 for approval of the disclosure statement, which would allow creditors to vote on the plan.
By proposing to pay creditors in full, Garlock’s plan would allow non-bankrupt owner EnPro Industries Inc. to retain ownership. For discussion of the revised plan, click here for the June 2 Bloomberg bankruptcy report.
The asbestos committee said the plan can’t be approved because it allows EnPro to retain ownership even though its constituents won’t be fully paid. The creditors also objected to how the plan would bestow immunity from asbestos claims on non- bankrupt affiliates.
EnPro makes engineered products, including diesel and natural-gas engines. It has operations in the U.S. and 10 other countries.
EnPro had assets of $1.47 billion and liabilities of $744.3 million on its June 30 balance sheet.
EnPro’s Net income last year was $27 million on revenue of $1.14 billion.
For the first half of this year, EnPro’s net sales of $600.3 million resulted in net income of $9.6 million.
The case is In re Garlock Sealing Technologies LLC, 10- bk-31607, U.S. Bankruptcy Court, Western District of North Carolina (Charlotte).