Budd secures confirmation of ninth amended Chapter 11 bankruptcy plan

By Caroline Salls

Pittsburgh, June 28 – The Budd Co., Inc. obtained confirmation of its ninth amended Chapter 11 plan, according to an order filed Monday with the U.S. Bankruptcy Court for the Northern District of Illinois.

As previously reported, 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.

Insured asbestos claims will be paid in full from insurance policy proceeds. An insured asbestos claim fund will be funded with $2.2 million in cash, which will be used for the benefit of the insurers in accordance with a cost sharing agreement.

Holders of uninsured asbestos claims will receive 67% of the value of their claim paid until an uninsured asbestos claim fund is exhausted. Budd will pay $3.5 million to the fund on the plan confirmation date, and an additional $950,000 contribution will come from UAW cash.

Holders of general unsecured claims will receive cash equal to 67% of their claims.

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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