In re Western Asbestos Co., 02-46284 T.

• Decision Date: 27 January 2004
• Docket Number: No. 02-46285 T.,No. 02-46284 T.,No. 02-46286 T.,02-46284 T.,02-46285 T.,02-46286 T.
• Citation: 313 B.R. 456
• Parties: In re WESTERN ASBESTOS COMPANY, Western MacArthur Co., and Mac Arthur Co., Debtors.
• Court: U.S. Bankruptcy Court — Northern District of California

313 B.R. 456

In re WESTERN ASBESTOS COMPANY, Western MacArthur Co., and Mac Arthur Co., Debtors.

No. 02-46284 T.

No. 02-46285 T.

No. 02-46286 T.

United States Bankruptcy Court, N.D. California, Oakland Division.

January 27, 2004.

Alan D. Pedlar, Stutman, Treister and Glatt, Charles D. Axelrod, Stutman, Treister and Glatt, Los Angeles, CA, for Debtors.

Margaret Sheneman, Murphy, Sheneman, Julian and Rogers, Michael H. Ahrens, Sheppard, Mullin, Richter and Hampton, San Francisco, CA, Peter Van N. Lockwood, Caplin, Drysdale and Chartered, Washington, DC, for Official Unsecured Creditor Committee.

ORDER CONFIRMING SECOND AMENDED JOINT PLAN OF REORGANIZATION AND GRANTING RELATED RELIEF¹

LESLIE TCHAIKOVSKY, Bankruptcy Judge.

This matter came before the Court upon the request for confirmation of the "Second Amended Joint Plan of Reorganization" (the "Plan")² filed November 18, 2003, by Western Asbestos Company ("Western Asbestos"), Western MacArthur Co. ("Western MacArthur") and Mac Arthur Co. ("Mac Arthur"), the debtors and debtors in possession in the above-captioned cases (collectively, the "Debtors"); the Official Unsecured Creditors' Committee in the above-captioned cases (the "Committee"); and the Honorable Charles B. Renfrew, the legal representative appointed by this Court to represent the interests of future asbestos claimants in the above-captioned cases (the "Futures Representative" and collectively with the Debtors and the Committee, the "Proponents").

As part of the confirmation process, on October 31, 2003, this Court entered its "Memorandum of Decision Re Confirmation Legal Issues" (the "Memorandum of Decision") and on December 5, 2003, entered its interlocutory "Order Summarily Adjudicating Certain Confirmation Issues" (the "Partial Summary Judgment Order"). The Partial Summary Judgment Order is hereby adopted as a final order of this Court and shall be deemed entered as a final order as of the date of entry of this Confirmation Order.

In addition, on January 20, 2004, this Court entered its "Order Under Fed.R.Bankr.P. 9019 Approving (1) Compromise And Settlement Agreement With Hartford, And (2) Certain Agreements Ancillary To Hartford Settlement Agreement" (the "Hartford Approval Order"), which Order approved the "Settlement Agreement And Release" (the "Hartford Settlement") embodying a settlement agreement with Hartford Accident and Indemnity Company ("Hartford"), which included a release of the Hartford Released Parties. Because of the Hartford Settlement and the Hartford Approval Order, Hartford has conditionally withdrawn all of its objections to confirmation. As a result, the only parties opposing confirmation of the Plan are: (a) General Accident Insurance Company of America, now known as OneBeacon Insurance Company ("General Accident"), (b) Argonaut Insurance Company ("Argonaut"), and (c) United States Fire Insurance Company ("U.S. Fire" and collectively with General Accident and Argonaut, the "Objecting Insurers"). No creditors have opposed confirmation of the Plan.

After notice, a trial was held on confirmation of the Plan, which commenced on November 10, 2003, and proceeded over a several week period (the "Confirmation Hearing"). Appearances at the Confirmation Hearing were as noted in the record. Upon consideration of the record of the Confirmation Hearing (including all testimony proffered and exhibits admitted into evidence) and upon all pleadings heretofore filed and all proceedings heretofore conducted in the above-captioned chapter 11 cases (the "Chapter 11 Cases"), this Court entered its "Memorandum Of Decision After Confirmation Hearing" (the "Confirmation Decision"). For the reasons set forth in both the Memorandum of Decision and the Confirmation Decision, after due deliberation and good and sufficient cause appearing therefor,

IT IS HEREBY ORDERED BY THE COURT THAT:

A. General Decrees and Implementation.

1. The Plan, a copy of which is annexed hereto as Exhibit "A", is hereby confirmed as modified by this Order, including as provided in Paragraph R.59, infra.

2. All objections to Confirmation of the Plan, other than those withdrawn in writing prior to, or on the record at, the Confirmation Hearing, and other than those in respect of which the Court made rulings during the Confirmation Hearing, are hereby overruled.

3. Consistent with the Plan, the following agreements and documents, and all amendments, modifications and supplements thereto (which agreements and documents shall be substantially in the respective forms attached as exhibits to the Plan or as filed with the Court on October 24, 2003), including, without limitation, all annexes, exhibits, and schedules thereto, and all terms and conditions thereof, are hereby determined to be fair and reasonable and are hereby approved: (a) the "Glossary Of Terms For The Plan Documents;" (b) the "Western Asbestos Settlement Trust Agreement;" (c) the "Trust Bylaws;" (d) the "Asbestos Personal Injury Settlement Trust Distribution Procedures;" (e) the "Case Valuation Matrix;" (f) the "Mac Arthur Note;" (g) the "Mac Arthur Pledge Agreement;" (h) the "Mac Arthur Business Loss Insurance Security;" and (i) the "Mac Arthur General Insurance Security." Without need for further order or authorization of the Bankruptcy Court, the Proponents, the Debtors after the Effective Date (the "Reorganized Debtors"), the Trust and the Trustees, and the TAC are hereby authorized and empowered to make any and all modifications to any and all documents included as part of the Plan Documents to the extent authorized by such Plan Documents.

4. All non-Class 4 Claims against the Debtors and all common stock Interests in the Debtors shall be unimpaired, except that the Trust shall acquire all of the common stock of Western Asbestos, and the common stock Interests of Mac Arthur shall be subject to the terms of the Mac Arthur Pledge Agreement.

5. The Proponents, the Reorganized Debtors, the Trust and the Trustees, the TAC, the Futures Representative and any other party whose cooperation is needed in connection with the Plan, are authorized and required to take all steps necessary and to execute, deliver, file or record such contracts, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan, including to establish the Trust, qualify it as a settlement fund within the meaning of section 468B of the Internal Revenue Code and the Treasury Regulations issued pursuant thereunder, receive the Trust Assets, issue and distribute the Mac Arthur Note, the Mac Arthur Pledge Agreement, the Mac Arthur Business Loss Insurance Security, and the Mac Arthur General Insurance Security, issue stock of Western Asbestos to the Trust, pay any fees due the Office of the United States Trustee ("U.S.Trustee"), and otherwise consummate the Plan upon the satisfaction of all conditions to the occurrence of the Effective Date. The Chief Executive Officer, Chief Financial Officer, President or any Vice President of any of the Debtors or, in the case of Western Asbestos, any of its directors or Amy Matthew, the Court-appointed responsible individual, shall be authorized to act on behalf of the Debtors with respect to the foregoing.

6. All matters provided for under the Plan involving the corporate structure of the Debtors or Reorganized Debtors, or any corporate action to be taken by, or required of the Debtors or Reorganized Debtors, shall be deemed to have occurred and be effective as provided in the Plan, and shall be authorized and approved in all respects without any requirement for further action by the stockholders or directors of such entities.

7. Except as otherwise expressly provided in the Plan, on the Effective Date, the Reorganized Debtors shall be revested with all of the assets and property of their former chapter 11 estates, and, following the Effective Date, the Debtors may operate their businesses free of any restrictions imposed by the Bankruptcy Code or by the Bankruptcy Court, or the guidelines of the U.S. Trustee.

8. Except for those causes of actions that have been compromised and settled, or which are transferred to the Trust pursuant to the Plan, prior orders of this Court or this Confirmation Order, all causes of actions of the Debtors shall be preserved and retained by the Debtors for enforcement subsequent to the Confirmation of the Plan.

9. With respect to causes of action that are transferred to the Trust pursuant to the Plan, prior orders of this Court or this Confirmation Order, on the Effective Date, the Trust is hereby designated as successor to the Debtors and as a representative of the chapter 11 estates, and is authorized as a matter of law to appear in and act on behalf of the Debtors in all pending actions and to pursue all such causes of action for the benefit of the holders of Asbestos Related Claims without any further required action by the Debtors or the Court. On the Effective Date (immediately after giving effect to the release in favor of the Settling Asbestos Insurance Companies), pursuant to section 1123(b)(3)(B) of the Bankruptcy Code, except as otherwise provided by the Plan, the Trust shall be vested with and have the right to enforce against any Entity any and all of such causes of action, with the proceeds of the recovery of any such actions related to insurance for Asbestos Related Claims (including, without limitation, the Coverage Litigation) to be paid to the respective Debtor, as appropriate, subject to its respective obligations to the Trust under the Mac Arthur Business Loss Insurance Security and the Mac Arthur General Insurance Security; provided, however, that the foregoing shall not alter, amend or modify the injunctions, releases or discharges provided in the Plan or this Order; and provided, further, that such injunctions shall not preclude the Debtors from enforcing their...