Maremont obtains court approval of combined plan and disclosure

By Sarah Lizee

Olympia, Wash., May 17 – Maremont Corp.’s combined Chapter 11 plan confirmation and disclosure statement was approved Friday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, parent Meritor said the plan is intended to permanently resolve all current and future asbestos claims through the creation of a trust pursuant to Section 524(g) of the Bankruptcy Code.

Under the plan, Maremont will fund a trust to address its current and future asbestos claims and permanently prohibit any future lawsuits related to those claims.

Funding for the 524(g) trust will consist of a $28 million contribution by Meritor, together with a contribution of Maremont’s remaining assets, including roughly $21 million in cash and intercompany loan receivables less certain amounts needed to pay for the administrative costs of the Chapter 11 cases, as well as its remaining insurance assets.

All claims other than asbestos claims against Maremont and its subsidiary debtors will be paid in full or reinstated.

Meritor’s equity interests in Maremont will be canceled. The 524(g) trust will own 100% of the equity interests in reorganized Maremont.

Meritor, Inc. is a Troy, Mich.-based global supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets that filed for bankruptcy on Jan. 22. The Chapter 11 case number is 19-10118.

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