Dec 27, 2007 - Federal-Mogul is set to exit Chapter 11
Federal-Mogul Corp. has 45,000 workers worldwide and 1,300 employees in Michigan. It makes a range of auto parts including pistons, windshield wipers and bearings for sale to automakers and in stores. Federal-Mogul emerges from Chapter 11 bankruptcy protection on December 27th. This will end a six-year reorganization of the auto-parts maker. The company is expected to exit bankruptcy under the control of Carl Icahn. Icahn will own a quarter of Federal-Mogul when the company exits. Icahn also will have options to buy a total of 76% of the company's stock.
Federal-Mogul filed for bankruptcy Oct. 1, 2001, due to mounting asbestos litigation. The lawsuits stemmed from businesses that had used asbestos to make items such as gaskets and brakes that Federal-Mogul acquired. Six years later, the process has allowed Federal-Mogul to shift asbestos liabilities into a trust responsible for paying current and future plaintiffs. That trust will hold a little more than half of Federal-Mogul's stock.
Claims to the trust will be made by victims of asbestos-related diseases, such as mesothelioma and lung cancer. Asbestos lawyers anticipate that the trust will process the claims efficiently in the future.
Jack K Clapper
Clapper, Patti, Schweizer & Mason
415-332-4262
800-440-4262
jkc@clapperlaw.com
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