Clapper, Patti, Schweizer and Mason

ACandS Inc. is an insulation contractor that voluntarily entered Chapter 11 in September 2002.  The company is a unit of Lancaster, Pa.-based Irex Corp. At the time it filed for Chapter 11, ACandS had already settled 247,000 asbestos claims, but had 300,000 left to deal with. The company now is in the final stage of its reorganizing.

The reorganization plan calls for $500 million in insurance settlements to resolve the asbestos liabilities. ACandS says no one has objected to the plan. The company expects a smooth end to a long-running bankruptcy case. That clears the way for U.S. Bankruptcy Judge Judith Fitzgerald to authorize ACandS to send the plan to its creditors for a vote. If the Chapter 11 plan is confirmed, ACandS's asbestos liabilities would be placed in a trust funded largely by a unit of Travelers Cos.

ACandS's plan calls for an estimated 6 percent recovery for people with asbestos-related injuries, including mesothelioma and lung cancer, according to court documents. That percentage reflects a deal made with Travelers Casualty that ended decades of litigation over the insurer's obligations to cover asbestos claims against ACandS. The money Travelers will have set aside, $449 million, is expected to earn another $10 million in interest by the time ACandS's Chapter 11 plan is confirmed. Additionally, ACandS stands to collect about $44 million under a settlement with a unit of ACE Ltd., if its Chapter 11 plan is confirmed. Most of the money from Travelers, ACE and other sources will go to a trust to be set up under the Chapter 11 plan to pay claims. 

 
Jack K Clapper
Clapper, Patti, Schweizer & Mason
415-332-4262
800-440-4262
jkc@clapperlaw.com