O-I Glass’s Paddock unit files bankruptcy to resolve asbestos claims

By Caroline Salls

Pittsburgh, Jan. 6 – O-I Glass, Inc. wholly owned subsidiary Paddock Enterprises, LLC filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware to resolve all of its current and future asbestos-related claims, according to an Owens-Illinois, Inc. news release.

Owens-Illinois said a new holding company structure was announced on Dec. 27 under which O-I Glass became the new parent entity with Owens-Illinois Group, Inc. and Paddock as direct wholly owned subsidiaries.

O-I Glass said its legacy asbestos-related debt is isolated within Paddock, structurally separating it from the company’s glass-making operations, which remain under O-I Group.

O-I Glass and O-I Group are not included in the Chapter 11 filing and will continue to operate as usual throughout Paddock’s Chapter 11 process.

“Addressing Paddock’s legacy liabilities through Chapter 11 will help enable O-I Glass to further unlock the value creation potential of this global franchise,” O-I Glass chief executive officer Andres Lopez said in the release.

“By improving the company’s capital structure, this important step will support a number of critical strategic efforts and possibilities as O-I Glass leverages its position as the world’s leading manufacturer of sustainable glass packaging.”

After exiting a business in 1958 that produced Kaylo, an asbestos-containing thermal insulation product, Owens-Illinois said it has disposed of more than 400,000 asbestos-related claims and incurred gross expense of roughly $5 billion for asbestos-related costs.

“Paddock evaluated its options and determined that a Chapter 11 plan of reorganization was the most fair and equitable way to obtain certainty and finality in addressing its legacy asbestos-related liabilities,” Lopez said in the release.

Owens-Illinois said Paddock’s ultimate goal in its Chapter 11 case is to confirm a plan of reorganization under Section 524(g) of the U.S. Bankruptcy Code and utilize this specialized provision to establish a trust that will address all current and future asbestos-related claims.

According to court documents, Paddock has $100 million to $500 million in both assets and debt.

The company did not list any unsecured creditors.

Paddock is advised in its Chapter 11 cases by Latham & Watkins LLP and Alvarez & Marsal.

Perrysburg, Ohio-based O-I Glass is a glass bottle and jar manufacturer. The Chapter 11 case number is 20-10028.

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