Quigley files amended plan of reorganization; asbestos claimants to share $465 million trust proceeds

By Caroline Salls

Pittsburgh, Oct. 7 - Quigley Co., Inc. filed an amended plan of reorganization and related disclosure statement Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

A hearing for approval of the disclosure statement was scheduled for Friday.

Under the plan, all current and future asbestos personal injury claims against Quigley will be channeled to a trust fund.

In addition, all current and future asbestos personal injury claims against companies other than Quigley, including parent company Pfizer Inc., will also be channeled to the trust, but only to the extent such claims are based on Quigley's conduct or products.

According to the disclosure statement, the trust will only be able to pay a small percentage of each claim. However, Quigley estimates that only $268 million would be available for distribution in a liquidation, while, under the plan of reorganization, $645 million will be available.

The trust will be funded with assets of Pfizer and Quigley, including.

* $102.6 million of insurance that contains no restrictions on the payment of asbestos personal injury claims;

* $191 million of insurance that contains restrictions on the payment of some asbestos personal injury claims;

* Receivables owed by insurance companies to Quigley for amounts that Quigley billed the insurance companies for before it filed bankruptcy (currently $28.4 million);

* $4.2 million to be paid to Quigley prior to Jan. 1 by an insurer under a pre-bankruptcy asbestos-related insurance settlement agreement;

* $15.7 million in cash, which is currently in an insurance trust account jointly held by Quigley and Pfizer;

* $15.6 million in cash that Quigley is expected to have in its accounts when the trust begins operating;

* A $405 million non-interest-bearing note issued by Pfizer, payable in equal installments over a period of 40 years, with the first installment payable on the date the trust begins operating; and

* Quigley's common stock.

Because reorganized Quigley will be owned by the trust, it will retain any profit made by reorganized Quigley's business operations.

By class, the treatment of claims is:

* Pfizer is the sole holder of the $52.72 million senior secured claim. Pfizer will receive cash equal to 100% of the claim less $30 million that Pfizer has agreed to forgive as part of its contribution to the asbestos-related personal injury trust;

* The $32.5 million of unsecured claims will receive a 7.5% percentage of their claim in cash;

* All asbestos-related personal injury claims will be channeled to the asbestos-related personal injury trust; and

* Pfizer, as the sole holder of the equity interests in class 5, will transfer the common stock of the reorganized Quigley to the asbestos-related personal injury trust.

Trust payment schedule

The trust will pay the following scheduled amounts for asbestos-related claims:

* Between $15,000 and $37,500 of $200,000 and $450,000 for mesothelioma;

* Between $2,625 and $6,750 of $35,000 to $90,000 for lung cancer 1 and severe asbestosis;

* Between $1,125 and $2,250 of $15,000 to $30,000 for other cancers;

* $150 for $2,000 of asbestos/pleural disease 1; and

* $375 of $5,000 for asbestosis/pleural diseases II.

As of Sept. 3, 2004, Quigley had 160,386 claims pending, including 3,372 mesothelioma claims; 6,999 lung cancer claims; 2,840 other cancer claims; 112,582 nonmalignant claims and 34,593 unknown disease claims.

According to the plan, Quigley estimates that there are an additional 50,000 current claims.

Also, the future demandholders' representative experts have estimated that there will be 862,078 future claims against Quigley, including 25,011 of mesothelioma claims; 33,963 lung cancer claims; 13,085 other cancer claims and 790,019 non-malignant claims for a value of $9.32 billion undiscounted and $4.51 billion discounted.

Quigley filed for bankruptcy on Sept. 3, 2004 to resolve its asbestos litigation. Its Chapter 11 case number is 04-15739.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.