Clapper, Patti, Schweizer and Mason

>Federal-Mogul Corp. has reached agreements to resolve objections to its Chapter 11 reorganization plan. The auto-parts maker has been in Chapter 11 for several years.  It sought relief in bankruptcy from thousand of lawsuits filed by asbestos lawyers on behalf of their clients suffering from various asbestos-related diseases, including mesothelioma and lung cancer. Federal-Mogul could emerge from bankruptcy by year's end. Federal-Mogul insurers were the only remaining holdouts on its reorganization plan. On Monday papers are expected to be filed in which the insurers agree to drop their objections to all issues. The issues include whether the company is entitled to assign rights under its insurance policies to a trust for asbestos-related illnesses, such as mesothelioma, under the reorganization plan. Federal-Mogul's plan has the support of asbestos claimants and banks and bondholders. The broad outlines of the plan were hammered out years ago in negotiations between investor Carl Icahn, a major debt holder, and asbestos-injury lawyers. Icahn intends to acquire half of the reorganized Federal-Mogul that will be owned by the asbestos claimants under the plan. However, two judges must sign off on Federal-Mogul's Chapter 11 proposal before the end of the year, if the company is to meet the deadline on its exit financing. The possibility of appeals could delay confirmation, unless objections are withdrawn before the judge signs off. Jack K Clapper Clapper, Patti, Schweizer & Mason 415-332-4262 800-440-4262 jkc@clapperlaw.com