Federal-Mogul Corp., Southfield, MI, in government-administered creditor protection since October 2001, recently filed statements with the U.S. Bankruptcy Court that it says will facilitate its reorganization and emergence from bankruptcy.
Federal-Mogul is a global supplier of automotive components, sub-systems, modules, and systems for OEMs and the aftermarket.
The paperwork filed September 30 includes a settlement agreement among the company, the proponents of its reorganization, and U.K. Administrators, which would settle all the outstanding matters in dispute among them. Also, the company’s Asbestos Committee agreed that the Asbestos Trust would satisfy indemnification obligations to the company by delivering a portion of the Trust's equity back to the company.
Concurrent with the settlement agreement, the Asbestos Committee requested that financier Carl Icahn provide the Asbestos Trust with immediate liquidity once the reorganization plan is brought into effectiveness. Alternatively, Icahn would acquire the Asbestos Trust's position in Federal-Mogul or, if it did not exercise the option, by providing certain financing to the trust.
Federal-Mogul chairman, president and CEO Jose Maria Alapont said the agreements represent one of the most significant steps toward emergence from Chapter 11 in the U.S. and Administration in the U.K. "We are pleased with the support and collaboration in the recent months from Mr. Icahn, our plan proponents and stakeholders. We will welcome Mr. Icahn's potential increased stake in the emerging and reorganized company."
Icahn stated that he was extremely pleased by the settlement agreement among the parties and was gratified that he was able to lend assistance to the settlement process.