Quigley disclosure statement approved; plan confirmation hearing set for May 25

By Caroline Salls

Pittsburgh, Jan. 24 - Quigley Co., Inc.'s disclosure statement for its plan of reorganization was approved Tuesday by the U.S. Bankruptcy Court for the Southern District of New York.

A plan confirmation hearing is scheduled for May 25.

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 stock of the reorganized Quigley to the asbestos-related personal injury trust.

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

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