In re Celotex Corp.
| Decision Date | 06 December 1996 |
| Docket Number | 90-10017-8B1.,Bankruptcy No. 90-10016-8B1 |
| Parties | In re the CELOTEX CORPORATION and Carey Canada Inc., Debtors. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Florida |
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Jeffrey W. Warren, H. Bradley Staggs, Bush, Ross, Gardner, Warren & Rudy, P.A., Tampa, FL, Stephen A. Madva, Baldo M. Carnecchia, Jr., Natalie D. Ramsey, Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, for Debtors.
Charles M. Tatelbaum, Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., Clearwater, FL, for Trade Creditors Committee.
Richard A. Nielsen, Salem, Saxon & Nielsen, Tampa, FL, James L. Patton, Jr., David W. O'Connor, Young, Conaway, Stargatt & Taylor, Wilmington, DE, for Legal Representative.
Sheldon S. Toll, Honigman Miller Schwartz & Cohn, Detroit, MI, for Asbestos Health Claimants Committee.
FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING THE MODIFIED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE FOR THE CELOTEX CORPORATION AND CAREY CANADA INC.
The Celotex Corporation ("Celotex"), Carey Canada Inc. ("Carey Canada"), the Legal Representative for Unknown Asbestos Bodily Injury Claimants (the "Legal Representative"), the Official Committee of Asbestos Health Claimants (the "Asbestos Health Claimants Committee"), and the Official Committee of Trade Creditors (the "Trade Creditors Committee") (the foregoing are collectively referred to herein as the "Plan Proponents") having proposed and filed (a) the Modified Joint Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code for The Celotex Corporation and Carey Canada Inc. dated October 21, 1996 (the "October 21 Plan"), (b) the Disclosure Statement With Respect to Modified Joint Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code for The Celotex Corporation and Carey Canada Inc. dated October 21, 1996 (the "October 21 Disclosure Statement"), (c) the Supplement To Modified Joint Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code for The Celotex Corporation and Carey Canada Inc. and Related Disclosure Statement dated October 22, 1996 (the "October 22 Supplement") and (d) the Supplemental Technical Modifications to Modified Joint Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code for The Celotex Corporation and Carey Canada Inc. dated November 27, 1996 (the "Technical Modifications") (the October 21 Plan, including all Plan Documents, exhibits, appendices, schedules and annexes attached thereto, as modified, amended and supplemented by the October 22 Supplement and the Technical Modifications, is herein referred to as the "Plan"1); the United States Bankruptcy Court for the Middle District of Florida, Tampa Division (the "Bankruptcy Court") having entered orders dated October 21, 1996 and October 23, 1996 approving the October 21 Disclosure Statement and the October 22 Supplement (the October 21 Disclosure Statement, as modified, amended and supplemented by the October 22 Supplement, including all exhibits, appendices, schedules and annexes attached thereto, is herein referred to as the "Disclosure Statement") as containing adequate information in accordance with Section 1125 of the Bankruptcy Code; the Bankruptcy Court having presided over the proceedings regarding Confirmation of the Plan pursuant to the Order dated November 13, 1996 (the "Procedural Order") entered by the United States District Court for the Middle District of Florida, Tampa Division (the "District Court") in Case No. 96-2220-CIV-21 (Bankr.Consolidated Case Nos. XX-XXXXX-XB1 and XX-XXXXX-XB1) (as used herein, the term "Court" shall refer to the Bankruptcy Court and the District Court); the Court having reviewed the Plan, the Disclosure Statement, all pleadings and memoranda filed in connection with Confirmation of the Plan and all objections to Confirmation of the Plan including, but not limited to, objections to Confirmation of the Plan and/or joinders to such objections filed by Rapid-American Corporation, AlliedSignal Corporation, National Union Fire Insurance Company of Pittsburgh, PA, The Aetna Casualty and Surety Company, Florida Insurance Guaranty Association, Plaisted London Market Insurers, Hartford Accident and Indemnity Company, First State Insurance Company, Twin City Fire Insurance Company, Employers Mutual Casualty Company, Allstate Insurance Company, Federal Insurance Company, Protective National Insurance Company of Omaha, American Insurance Company, National Surety Corporation, Century Indemnity Company, Home Insurance Company, Home Indemnity Company, Eric Reinsurance Company, Highlands Insurance Company and Old Republic Insurance Company, the Texas Comptroller of Public Accounts, Steve D. Burnett, Jr., Pittsburgh Corning Corporation, the United States of America on behalf of the United States Environmental Protection Agency, Glenn Hasenauer, the Tennessee Department of Revenue, the New York City Housing Authority, Florida Department of Revenue, Bradford White Corporation, the State of Michigan Department of Treasury, Sergio Andrade, Jim Walter Corporation and Jasper Corp., and all responses thereto; the Court having considered the statements and arguments of counsel in support of, and in opposition to, Confirmation of the Plan presented at a hearing before the Bankruptcy Court which commenced on November 18, 1996 and which concluded on December 5, 1996 (the "Confirmation Hearing"); the Court having considered all testimony presented and evidence admitted at the Confirmation Hearing; the Court having taken judicial notice of the papers and pleadings on file in the Reorganization Cases, including, but not limited to, any adversary proceedings relating to the Reorganization Cases and taking into consideration the law of the case; and the Court finding that (a) notice of the Confirmation Hearing and the opportunity of any party in interest to object to or to otherwise be heard with respect to the Confirmation of the Plan was reasonable, adequate and sufficient, in accordance with applicable law including, but not limited to, Section 524(g) of the Bankruptcy Code and Bankruptcy Rule 2002(b), as to all parties to be affected by the Plan and the transactions contemplated thereby and (b) the legal and factual bases set forth in the pleadings and memoranda filed in connection with Confirmation of the Plan and presented at the Confirmation Hearing establish sufficient cause for the relief granted in the Confirmation Order, the Court hereby makes the following Findings of Fact and Conclusions of Law.2
1. Background
2. No trustee or examiner has been appointed in the Reorganization Cases. The Debtors have continued to operate their businesses and manage their properties as debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code and the Order Granting Motion for Authority to Operate Business entered by the Bankruptcy Court on October 12, 1990.
3. The Debtors' Chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to the Order Granting Motion for Joint Administration of Related Estates for Procedural Purposes Only entered by the Bankruptcy Court on October 12, 1990.
4. On and since the Petition Date, Celotex has manufactured and distributed building materials in five (5) major product segments: asphalt roofing products, foam insulation products, gypsum wallboard, acoustical ceiling products and fiberboard products. These products are marketed nationwide, primarily to building materials dealers, wholesalers, home center retailers, distributors and specialized applicators.3
5. From and including April 21, 1988 to the Petition Date and continuing thereafter, Jim Walter Corporation ("JWC") owned all the outstanding shares of preferred and common stock of Celotex. In addition, on the Petition Date, JWC owned all the outstanding shares of stock of the non-debtor companies, Center for Applied Engineering, Inc. ("CAE") and Jim Walter International Corporation ("JWIC"). Subsequent to the Petition Date, JWC formed Medical Market Place International, Inc. ("MMI") and has continued to own all outstanding shares of stock of MMI. From and including April 21, 1988 to the Petition Date, all the outstanding shares of stock of JWC were owned by JWC Holdings Corporation ("JWC Holdings") and all the outstanding shares of stock of JWC Holdings were owned by Jasper Corp. ("Jasper"). In 1995, JWC Holdings was dissolved. Since that date, all the outstanding shares of stock of JWC have been owned by Jasper. From and including April 21, 1988 and through Confirmation of the Plan, there have been no other changes in the direct or indirect ownership of the shares of stock of Celotex. Further, pursuant to that certain Settlement Agreement dated June 12, 1996 (the "Settlement Agreement"), a copy of which is attached to the Disclosure Statement as Exhibit B, Jasper and the Jasper shareholders agreed, among other things, not to transfer or issue shares of Jasper stock prior to the date on which the Trust obtains the Reorganized Celotex Common Stock.
6. The outstanding shares of preferred and common stock of Celotex held by JWC were not worthless at any point in time prior to June of 1996, and JWC has not claimed a worthless stock loss for the outstanding preferred and common stock of Celotex.
7. On the Petition Date, Celotex owned all the outstanding shares of stock of Carey Canada. Prior to 1986, Carey Canada engaged in asbestos mining and mining operations. In April 1986, Carey Canada ceased its mining operations and began the process of an orderly liquidation of its mining equipment and other assets. From and including the...
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