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The agreement in principle on a pre-pack asbestos bankruptcy plan for CE was reached with the proposed futures representative, David Austern, as well as with attorneys who ABB and CE expect to act on behalf of a sufficient number of current claimants to approve the plan. A trust, set up under the plan, will handle claims filed after a pre-packed Chapter 11 reorganization has been approved in court.
Once documentation on the agreement in principle has been completed, the plan is subject to a vote by asbestos claimants. If sufficient claimants approve the pre-pack Chapter 11 plan, it will be filed in bankruptcy court for final approval.
Under the agreement, the value of Combustion Engineering on the due date will be made available for the payment of asbestos claims.
In addition, ABB agreed to provide an enhanced payment for the benefit of claimants in the form of ABB stock and cash. The cash payments are to be made in pre-agreed installments from 2004 to 2009.
These cash payments for CE’s asbestos liability could total up to $350 million (in U.S. dollars), comprised of $250 million that are not dependent upon ABB’s future performance and $100 million that are performance-related. An additional $50 million in ABB stock will also be contributed.
With this agreement, CE and ABB are on schedule to file a pre-pack bankruptcy case in court for CE before the end of February, aiming to provide final closure to the asbestos problem to CE and all ABB affiliates, including ABB Ltd., says the company.
Publication date: 02/10/2003