Budd files Chapter 11 plan to incorporate settlement, benefit changes

By Caroline Salls

Pittsburgh, Oct. 1 – The Budd Co., Inc. filed its Chapter 11 plan and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the Northern District of Illinois.

The company said it will implement a settlement with equityholder ThyssenKrupp North America, Inc. (TKNA) under the plan.

In addition, causes of action that are not released under the plan will be preserved for the benefit of retirees. An independent fiduciary nominated by the United Autoworkers will have access to $5 million of operating cash to prosecute claims and will have sole authority to litigate and settle those claims.

Also under the plan, retiree benefits will be modified.

Asbestos claims that are not disallowed will be liquidated and satisfied by asbestos insurance policies, a $900,000 insured asbestos fund and a $100,000 uninsured asbestos fund.

Other than from one of the two asbestos funds, there will be no distribution of cash from the estate on account of asbestos claims, according to the disclosure statement.

Holders of secured claims will receive cash or the property securing the claim.

Holders of general unsecured claims will receive cash equal to a percentage of the claims. The percentage was not specified in the plan.

TKNA will keep 100% of the equity interests in Budd, in accordance with the settlement.

Chicago-based Budd made stainless steel rail cars. The company filed for bankruptcy on March 31, 2014 under Chapter 11 case number 14-11873.

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