Zurich, Switzerland—ABB reports that the U.S. Third Circuit Court of Appeals has ruled that ABB's Chapter 11 reorganization plan for its U.S. subsidiary, Combustion Engineering (CE), needs to be reviewed again by the U.S. District Court.
Zurich, Switzerland— ABB reports that the U.S. Third Circuit Court of Appeals has ruled that ABB’s Chapter 11 reorganization plan for its U.S. subsidiary, Combustion Engineering (CE), needs to be reviewed again by the U.S. District Court.
In the reorganization plan announced in January 2003, ABB says offered a $1.2 billion trust fund for claims against CE. This fund included the CE’s assets valued at $812 million, about 30 million ABB shares, and $350 million in cash contributions. The plan reportedly was accepted by an overwhelming majority of claimants, and approved by the applicable bankruptcy and district courts.
ABB says it’s considering its options following of this latest ruling, and expects to quickly resolve the latest issues raised by the appeals court. In the meantime, CE remains in Chapter 11, and it and the ABB group remain protected from asbestos litigation by the bankruptcy court’s injunction.
The Third Circuit Court of Appeals found that it was not appropriate to include Lummus Global and Basic Ltd. in CE’s reorganization plan. ABB states it will examine other mechanisms to deal with what it reports is insignificant asbestos exposure of these two companies.
‘Given the fact that both the bankruptcy and district courts have approved the Combustion Engineering Plan of Reorganization, we are naturally surprised and disappointed at today’s decision,’ says Jurgen Dormann ABB’s chairman and CEO. ‘However, we remain confident that we can resolve Combustion Engineering’s asbestos liability within a Plan of Reorganization com-patible with the Third Circuit’s decision within a relatively short time frame and without significant additional cost.’
Control Engineering Daily News Desk
Jim Montague, news editor
[email protected]
