Specialty Products, Bondex file plan contingent on asbestos liability

By Caroline Salls

Pittsburgh, July 13 - Specialty Products Holding Corp. and Bondex International Inc. filed a joint plan of reorganization Thursday with the U.S. Bankruptcy Court for the District of Delaware.

An asbestos trust will be established under the plan and funded with enough cash to pay in full all present and future asbestos-related claims and all expenses incurred by the asbestos trust, including professional fees.

The funding for the trust will be provided by Specialty Products and Bondex and their ultimate parent RPM International Inc.

The asbestos trust will be funded by a series of cash payments to pay in full the sum of the estimate of the asbestos liability of the debtors contained in the initial expert report of estimation expert Bates White, LLC or, if the Bates White report contains a range of estimates, the midpoint of that range, and the projected expenses of the trust in an amount determined by the bankruptcy court.

Specialty Products and Bondex said they will supplement the plan to include the details on the funding of the asbestos trust once the Bates White report is finalized. Under the court's case management order, the report must be completed by Aug. 15.

The debtors said they will wait for the bankruptcy court's estimation order and then decide whether to proceed with confirmation of the plan in its current form or as amended in light of the ruling.

Creditor treatment

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims, priority non-tax claims and general unsecured claims will be paid in full in cash;

• Debtor-in-possession facility claims will be paid in full in cash and all outstanding letters of credit issued under the DIP loan will be cancelled without draw or the letters of credit will be extended, refinanced or replaced on or after the plan effective date;

• Holders of secured claims will either be paid in full in cash or the claims will be reinstated;

• Asbestos personal injury claims will be channeled to the asbestos personal injury trust and will be determined and paid in full in cash under trust and distribution agreements;

• Intercompany claims will be reinstated; and

• Specialty Products and Bondex interests will be reinstated, and holders will retain those interests.

Specialty Products is a subsidiary of RMP International, a Medina, Ohio-based producer of specialty chemicals. The subsidiary filed for bankruptcy on May 31, 2010 under Chapter 11 case number 10-11780.

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