Quigley Co.'s disclosure statement draws objection from U.S. trustee

By Jim Witters

Wilmington, Del., Aug. 8 - Quigley Co. Inc.'s sixth amended and restated disclosure statement associated with its fifth amended plan of reorganization drew objections from the U.S. trustee for Region 2, according to documents filed Aug. 8 with the U.S. Bankruptcy Court for the Southern District of New York.

Trustee Tracey Hope Davis says the statement "does not provide adequate information for creditors concerning the fifth plan and appears to disregard this court's guidance in its decision, dated Sept. 8, 2010, denying confirmation of a previous plan of reorganization."

The court denied confirmation of a prior plan that was not proposed in good faith and failed to meet the best interests test. In fact, the court found that Pfizer, Inc., the debtor's parent, wrongly manipulated the voting process to assure confirmation of the plan, according to Davis.

The trustee identified three areas of the disclosure statement with inadequate information:

• In the previous confirmation decision, the court designated the vote of asbsestos claimants who settled their claims prepetition with Pfizer. Under the fifth plan, this group has a right to vote to accept the plan. The debtor failed to explain in the disclosure statement why this class has a right to vote in light of the previous designation of this group's vote;

• In the confirmation decision, the court found it inappropriate to include settling and non-settling claimants in the same class. In the fifth plan, the debtor again includes settling and non-settling claimants in the same class (4B). The debtor has failed to explain the basis for including these claimants in the same class; and

• In its confirmation decision, the court stated that future claimants and non-settling claimants must be paid consistent with historical settlement standards. Following denial of confirmation, the debtor and Pfizer settled with a large group of asbestos claimants. The debtor has failed to explain in its disclosure statement whether the proposed payments under the fifth plan are consistent with historical settlement standards, which now include the settlements that occurred after the denial of confirmation.

Davis said the court should deny approval of the disclosure statement.

A hearing on approval of the disclosure statement is scheduled for 10 a.m. ET on Aug. 15.

Quigley, a unit of New York-based Pfizer Inc., filed for bankruptcy on Sept. 3, 2004. Its Chapter 11 case number is 04-15739.

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