Kaiser Gypsum creditor, asbestos insurer files plan of reorganization

By Caroline Salls

Pittsburgh, April 17 – Kaiser Gypsum Co., Inc. creditor Truck Insurance Exchange filed a plan of reorganization and related disclosure statement for Kaiser’s Chapter 11 case Monday in the U.S. Bankruptcy Court for the Western District of North Carolina.

In addition to being a creditor, Truck said it issued Kaiser’s primary layer of insurance coverage for asbestos claims.

According to the disclosure statement, the Kaiser Gypsum debtors allowed their exclusive period to file a plan to expire without filing a plan and have now entered into an agreement with the future claimants’ representative and asbestos committee to life the automatic stay, allow asbestos related litigation to proceed in courts around the country “and abandon accomplishment of the principal purpose that drove the filing of the Chapter 11 cases.”

Truck said its plan “is intended to accomplish the very purposes for which the debtors filed the Chapter 11 cases – to provide a standardized and efficient procedure for addressing all asbestos-related claims, regardless of whether those claims are settled claims, current claims, future claims or claims that have reached judgment.”

Truck said the plan would implement a settlement facility that will be funded in an amount sufficient to pay asbestos claims in full and administered under claims resolution procedures and a case management order for those who seek to litigate their claims.

Specifically, Truck said the settlement facility will be funded with cash contributions from Truck, $49 million from Lehigh Hanson if it chooses to support the plan and an amount to be contributed by participating non-Truck asbestos insurers who reach an agreement with Truck to make a contribution in exchange for the protection of a contribution injunction.

The settlement facility will own 100% of the equity interests in the reorganized debtors.

Also under Truck’s proposed plan, holders of secured claims, priority claims, general unsecured claims, environmental claims and intercompany claims will be paid in full from the assets of the reorganized debtors.

Equity interests will be extinguished and deemed null and void.

Kaiser Gypsum is an Irving, Texas-based manufacturer of construction and remodeling materials. It filed for bankruptcy on Sept. 30, 2016. The Chapter 11 case number is 16-31602.

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