Specialty Products files disclosure statement, amended Chapter 11 plan

By Jim Witters

Wilmington, Del., Nov. 18 - Specialty Products Holding Corp. and Bondex International Inc.'s amended Chapter 11 plan and disclosure statement, filed Nov. 18 with the U.S. Bankruptcy Court for the District of Delaware, provide additional details about the debtors' proposed treatment of creditors.

The debtors had filed a Chapter 11 plan, but no disclosure statement, on Nov. 1 to compete for court approval with a plan filed by the official committee of asbestos personal injury claimants and the future claimants' representative.

Both plans call for the formation of a trust for the payment of claims of those who say they were harmed by exposure to asbestos products.

Debtors' attorney Gregory M. Gordon said at a Nov. 5 hearing that his clients' first amended plan of reorganization is intended to allow litigation to proceed on the two issues separating the debtors and the claimants.

The first issue is the estimation of current and future claims.

The second is the strength of claims against Specialty Products parent company RPM International Inc.

RPM has stated that it plans to seek protection from future claims by making a contribution to a trust established through the bankruptcy process.

Treatment of creditors

Under the debtors' amended plan, treatment of creditors would include the following:

• Holders of allowed priority claims and secured claims would be paid in full on the plan effective date;

• Holders of Specialty Products Holding Co., general unsecured claims and SPHC inter-company claims would receive cash in the amount of 50% of their claim and additional cash after the SPHC asbestos claims recovery percentage is available;

• Holders of Bondex general unsecured claims and Bondex inter-company claims would receive 5% of their allowed claim and additional cash after the Bondex asbestos claims recovery percentage is available;

• All SPHC and Bondex asbestos claims would be channeled into the asbestos personal injury trust and will be determined and paid according to the trust agreement;

• Holders of subsidiary inter-company claims would have their claims reinstated; and

• Holders of stock interests of SPHC and Bondex would have their interests reinstated.

A hearing on the debtors' and the claimants' disclosure statements is scheduled for Dec. 17.

Specialty Products is a subsidiary of RPM 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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