Exide's disclosure statement gets objections from lead claimants, equity committee

By Jeff Pines

Washington, March 10 - Exide Technology Inc.'s disclosure statement faces objections from victims of lead poisoning possibly attributable to the company and from its equity security holders committee.

The lead claimants, of which there are about 110, are mostly Greer, S.C. school children. Many of them permanently brain damaged "as a direct result of Exide's unlawful operation of lead battery manufacturing facility in Greer," the claimants' attorney said in a March 10 filing with the U.S. Bankruptcy Court for the District of Delaware.

The group has claims against the company of $207 million, which would make it the second largest claimant group.

Before Exide filed for Chapter 11, there were 24 cases that would be ready for trial within a few months, 20 cases could be trial ready within 45 days and 40 more claims could be ready to go to trial within four months.

According to Exide's plan, the total liabilities for the class that includes the lead claimants are $303.8 million, but the claimant group said that neither the disclosure statement nor the plan disclose how the company reached that figure. The group believes Exide values all personal injury claims at $20 million, but the plan does not tell them what kind of recovery the lead claimants would receive.

The plan does mention a reserve for disputed claims, but it is not clear how much money the reserve will have or if it will handle the lead claimants, the group said.

Another issue is that the plan's notes to the company's financial statements "carefully" omitted the word "lead" when it mentioned the Greer cases, the group said.

"Exide knew about it, lied about it, covered it up, ignored it, and let these small children play in this area (right next to the plant where they lived) for years without any clean-up efforts," the group said.

Further, the notes make no mention that the lead contamination in the development next to the plant was "fingerprinted chemically to have been produced and emitted by Exide at the Greer facility."

In fact, the group said, the statement does not mention that the company had reserved $50 million for these claims before it filed for bankruptcy.

Equity holders say company now worth more

The equity holders object because the disclosure statement lacks information about Exide's current enterprise value. The statement does mention that late last year the company's enterprise value was between $1.4 billion - $1.6 billion. The equity holders said a "number of positive developments" kicked the company's enterprise value up considerably and that Exide should now be able to fully repay its creditors and have money left over for the shareholders.

It filed its objection on March 10.

A hearing is scheduled for March 11.

The company filed for bankruptcy on April 15, 2002. Exide's Chapter 11 case number is 02-11125.

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