Federal Judge Affirms Leslie Controls' Reorganization Plan

Federal Judge Affirms Leslie Controls' Reorganization Plan

WILMINGTON, Del. - A Delaware federal judge on Feb. 7 affirmed an amended plan of reorganization in Leslie Controls Inc.'s Chapter 11 bankruptcy case (In re:  Leslie Controls, Inc., No. 1:11-mc-00013, D. Del.). 

Judge Jerome B. Simandle issued an order in the U.S. District Court for the District of Delaware affirming the U.S. Bankruptcy Court for the District of Delaware's Jan. 18 findings of fact, conclusions of law and order confirming the second conformed first amended plan of reorganization of Leslie under Chapter 11 of the Bankruptcy Code.

 The judge said he will issue his own findings of fact and conclusions of law in support of his order within 21 days.

Leslie on July 12 filed a prenegotiated petition for reorganization under Chapter 11.  On Aug. 12, Leslie filed a first amended plan of reorganization and first amended disclosure statement, and on Oct. 28, Bankruptcy Judge Christopher S. Sontchi entered findings of fact, conclusions of law and the order confirming Leslie's plan, saying it complies with Bankruptcy Code rules and provides adequate and proper means for implementation. 

The plan contemplates establishment of a trust under Section 524(g) of the Bankruptcy Code and an injunction channeling all current asbestos-related claims and future asbestos-related demands to an Asbestos Personal Injury Trust.

On Nov. 24, Leslie filed a motion in the District Court seeking an order affirming the confirmation of its reorganization plan.  Certain insurers objected to the plan, but in his Jan. 18 order confirming Leslie's second conformed plan, Bankruptcy Judge Sontchi said the insurers agreed with Leslie, the Official Committee of Unsecured Creditors, the future claims representative and Leslie parent CIRCOR International Inc. that the insurers would dismiss their appeals if certain changes were made to Leslie's first conformed plan of reorganization and if certain provisions were added to the confirmation order.

Bankruptcy Judge Sontchi said the second conformed plan contains the changes that were negotiated by the parties.  CIRCOR confirmed in a news release that all appeals of the plan have been resolved and the second conformed amended plan was unopposed.

Leslie and CIRCOR will fund the Section 524(g) trust established under the reorganization plan once various closing mechanics are satisfied and the plan becomes effective, when Leslie will emerge from Chapter 11 protection, CIRCOR said in a press release.  CIRCOR added that it expects these steps to be completed within 60 days.

[Editor's Note:  Full coverage will be in the February issue of Mealey's Asbestos Bankruptcy Report.  In the meantime, the District Court order is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #48-110228-019R.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

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For more information, e-mail editor Emerson Heffner at emerson.heffner@lexisnexis.com.