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Kaiser Gypsum files bankruptcy, looks to resolve asbestos liability
By Caroline Salls
Pittsburgh, Oct. 4 – Kaiser Gypsum Co., Inc. filed Chapter 11 bankruptcy on Sept. 30 in the U.S. Bankruptcy Court for the Western District of North Carolina.
The company said in a complaint filed with the court that it filed for Chapter 11 primarily to resolve its asbestos liability through a plan of reorganization that includes the establishment of a section 524(g) trust.
Kaiser said the adversary proceeding was filed “to maintain the status quo” and prevent the continuation or filing of any action seeking to hold its non-debtor affiliates or insurers that issued primary or excess policies that continue to provide coverage for asbestos personal injury claims.
“None of the protected parties ever manufactured, sold or distributed the debtors’ asbestos products,” the complaint said. “As such, they have no direct liability for claims based on the debtors’ asbestos products.”
In connection with the bankruptcy filing, Kaiser obtained a commitment for up to $45 million of debtor-in-possession financing from Lehigh Hanson, Inc.
The DIP facility will mature on the earliest of Oct. 1, 2018, Oct. 31, 2016 if the final order has not been entered, the closing of a sale of all or substantially all of the company’s assets, the filing of a Chapter 11 plan that is not approved by the lender and five business days after written notice of a default.
Interest will accrue at Libor plus 250 basis points.
The company is seeking interim access to $2 million of the DIP financing.
According to court documents, Kaiser has $100 million to $500 million in both assets and debt.
The company did not list any unsecured creditors with claims of $1 million or more.
Kaiser is represented by Gregory M. Gordon, Rayburn Cooper & Durham, PA and Jones Day.
The company is an Irving, Texas-based manufacturer of construction and remodeling materials. The Chapter 11 case number is 16-31602.
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