Opinion
CASE No. 02-37124-SAF-11, CHAPTER 11.
May 6, 2003
Asbestos Claims Management Corporation, a Delaware corporation ("ACMC"), debtor and debtor in possession in the above-captioned chapter 11 bankruptcy case, filed its Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code For Asbestos Claims Management Corporation (the "Third Amended Plan") on December 12, 2002, and proposed the Technical Modifications (as hereinafter defined) to the Third Amended Plan on April 21, 2003 (the Third Amended Plan, as modified by the Technical Modifications and together with the Plan Documents and all exhibits and attachments thereto, is herein called the "Plan"). The Bankruptcy Court entered an Order (the "Disclosure Statements Order") on December 16, 2002, approving the Disclosure Statements with respect to the Third Amended Plan under section 1125(b) of the Bankruptcy Code. The Bankruptcy Court has reviewed the Plan, the Disclosure Statements, memoranda filed in connection with the Confirmation of the Plan and all filed objections and responses to, and statements and comments regarding, the Confirmation of the Plan. The Bankruptcy Court has heard the statements of counsel in support of, and in opposition to, the Confirmation of the Plan at the Confirmation Hearing which was held on April 24, 2003 and May 1, 2003. The Bankruptcy Court has considered all testimony (whether live or by affidavit) presented and evidence admitted at the Confirmation Hearing and has taken judicial notice of the papers and pleadings on file in the Reorganization Case and the NGC Reorganization Cases. Notice of the Confirmation Hearing and the opportunity of any party in interest to object to the Confirmation of the Plan were adequate and appropriate as to all parties to be affected by the Plan and the transactions contemplated thereby. The legal and factual bases set forth in the memoranda filed in these proceedings and the evidence presented at the Confirmation Hearing establish just cause for the Bankruptcy Court to make the following Findings of Fact and Conclusions of Law (the "Findings and Conclusions"):
Capitalized terms used herein shall have the meanings ascribed to them in the Plan, unless otherwise defined herein. Words and terms defined in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning ascribed therein to such words and terms, unless a different definition is given in the Plan.
These Findings and Conclusions constitute the Court's findings of fact and conclusions of law under Rule 52 of the Federal Rules of Civil Procedure, as made applicable by Bankruptcy Rules 7052 and 9014. Any finding of fact shall constitute a finding of fact even if it is stated as a conclusion of law, and any conclusion of law shall constitute a conclusion of law even if it is stated as a finding of fact.
I. FINDINGS OF FACT
A. Pertinent Events Preceding ACMC Reorganization Case
1. NGC Reorganization Cases. Before New NGC purchased the name "National Gypsum Company" as described below, ACMC was known as National Gypsum Company ("Old NGC"). Old NGC, incorporated as a Delaware corporation in 1925, was an integrated, diversified manufacturer and supplier of products and services for the building, construction and shelter markets. Some of the products manufactured or sold by Old NGC contained asbestos. As a result of liquidity pressures arising from its debt load and the recession in the building industry in 1990 and exacerbated by the filing of tens of thousands of asbestos bodily injury and property damage lawsuits against it, Old NGC and its parent company, Aancor Holdings, Inc. ("Aancor"), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in this district and division on October 28, 1990. The Bankruptcy Court presided over the NGC Reorganization Cases, which were administratively consolidated at Case No. 390-37213-SAF by order entered on October 29, 1990.
2. 1993 Reorganization Plan. A First Amended and Restated Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for National Gypsum Company and Aancor Holdings, Inc. (as amended and confirmed, the "1993 Reorganization Plan") was confirmed in the NGC Reorganization Cases by order entered on March 9, 1993 (the "1993 Confirmation Order"). Pursuant to the 1993 Confirmation Order and the 1993 Reorganization Plan, New NGC was formed as a Delaware corporation to purchase from Old NGC the operating assets and business of Old NGC's Gold Bond Building Products division, including the name "National Gypsum Company." Old NGC retained the remaining assets, including the general liability insurance coverage for asbestos claims. Aancor was merged into Old NGC, with Old NGC as the surviving entity. On July 1, 1993, Old NGC changed its name to Asbestos Claims Management Corporation ("ACMC"). The NGC Asbestos Disease and Property Damage Settlement Trust, which later changed its name to the NGC Settlement Trust, was formed pursuant to the 1993 Reorganization Plan as a qualified settlement fund under section 468B of the Internal Revenue Code. The initial assets of the NGC Settlement Trust were cash, certain causes of action, and a 100% equity interest in ACMC (which continued to own the asbestos insurance coverage) and Old NGC's engineering and construction company, The Austin Company. Pursuant to the 1993 Reorganization Plan, the NGC Settlement Trust was charged with using its assets to resolve the liabilities of ACMC related to asbestos bodily injury claims (both current and future) and asbestos property damage claims. In effect, the 1993 Reorganization Plan continued the existence of ACMC, and created the NGC Settlement Trust, for the sole purpose of resolving, as fully, fairly and expeditiously as possible, these current and future asbestos claims. The Bankruptcy Court retained jurisdiction over the NGC Reorganization Cases to, among other things, act as the supervisory court for the NGC Settlement Trust and to determine, as and when necessary, the process for the resolution of asbestos bodily injury claims against ACMC.
3. 1993 Reorganization Plan Injunctions Concerning Asbestos Claims. All asbestos claimants that had cognizable asbestos bodily injury and property damage claims as of the confirmation of the 1993 Reorganization Plan were permanently enjoined from pursuing such claims against any party, other than ACMC and the NGC Settlement Trust in accordance with the provisions of the 1993 Reorganization Plan. In contrast, asbestos bodily injury claimants that did not have cognizable claims as of the confirmation of the 1993 Reorganization Plan were "channeled" to ACMC and the NGC Settlement Trust for payment, and were temporarily enjoined from asserting such claims against any other entity "pending exhaustion of the remedies" provided by the NGC Settlement Trust.
4. Processing of Asbestos Claims Under 1993 Reorganization Plan. Pursuant to the 1993 Reorganization Plan, the NGC Settlement Trust handled the processing and payment of asbestos property damage claims against ACMC, allocating a negotiated portion of the assets of the NGC Settlement Trust to the payment of these claims. The 1993 Reorganization Plan authorized ACMC to use the Center for Claims Resolution, Inc. (the "CCR") as its claims resolution facility for asbestos bodily injury claims. The CCR was a joint defense facility established by various former asbestos producers that were the target of asbestos lawsuits (including Old NGC) to handle the huge volume of asbestos bodily injury litigation against its members. The CCR resolved such claims through trial or settlement in the court system, and the 1993 Reorganization Plan permitted the continuation of lawsuits against ACMC with respect to asbestos bodily injury claims, but only so long as ACMC remained a member of the CCR. The 1993 Reorganization Plan also contained provisions for the implementation of an alternate, administrative claims resolution facility (the "Alternate Claims Facility") if, among other things, the NGC Settlement Trust decided to terminate ACMC's membership in the CCR.
5. Asbestos Bodily Injury Lawsuits Against ACMC. While the NGC Settlement Trust has successfully resolved all asbestos property damage claims against ACMC (other than with respect to certain final payments due to them with respect to the Subsequent Asset Valuation and, if implemented, their pro rata share of the allocation of the proceeds of the Prostok Bondholder Settlement), ACMC continues to be a defendant in tens of thousands of pending cases and, without the protection of the "channeling order" in the 1993 Confirmation Order (the "Channeling Order"), could reasonably expect to be named in hundreds of thousands of future cases arising out of the same or similar conduct or events that gave rise to the existing lawsuits.
6. Anticipated Shortfall in NGC Settlement Trust Assets. As early as 1994, ACMC and the NGC Settlement Trust anticipated that the NGC Settlement Trust might not have enough assets to pay all asbestos bodily injury claims against ACMC in full.
7. Reversal of Georgine Class Action Settlement. In 1996, the United States Court of Appeals for the Third Circuit reversed a class action settlement involving asbestos claims against, among others, members of the CCR (including ACMC). Georgine v. Amchem Products, Inc., 83 F.3d 610 (3d Cir. 1996), aff'd Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (" Georgine"). The class action settlement reversed by the Third Circuit in Georgine had effectively limited, for ten years, the number of claims that could be asserted against members of the CCR in any given year and the maximum indemnity payment that would be paid on such claims. The reversal of the Georgine settlement resulted in a higher aggregate ultimate indemnity value of asbestos bodily injury claims against ACMC. The United States Supreme Court upheld the Third Circuit's reversal of Georgine in June 1997.
8. Liability Ruling Litigation Against New NGC. After the reversal of the Georgine settlement, ACMC and the NGC Settlement Trust filed a declaratory judgment action in the NGC Reorganization Cases seeking a declaration that New NGC was liable, under the 1993 Reorganization Plan, for any future Asbestos Claims that the NGC Settlement Trust could not pay in full. After a trial, the Bankruptcy Court issued a ruling in February 1998, affirmed by the United States District Court for the Northern District of Texas in 1999, declaring that New NGC was liable under the 1993 Reorganization Plan, to the same extent Old NGC would be liable, for any future Asbestos Claims that the NGC Settlement Trust could not pay (the "Liability Ruling"). In July 2000, the United States Court of Appeals for the Fifth Circuit reversed the Liability Ruling. The Fifth Circuit held that New NGC would be liable for future Asbestos Claims only if the future claimants could prove that New NGC had liability under applicable state successor liability laws. The United States Supreme Court denied certiorari.
9. Termination of ACMC Membership in the CCR. ACMC terminated its membership in the CCR effective June 16, 2000. By that time, ACMC's alleged share of committed settlements negotiated by the CCR with asbestos plaintiffs' lawyers was approaching the amount of current and projected assets available in the NGC Settlement Trust to pay such settlements on behalf of ACMC. ACMC's withdrawal from the CCR triggered the 1993 Reorganization Plan's requirement that the NGC Settlement Trust establish the Alternate Claims Facility. In addition, the continuation or commencement of asbestos-related bodily injury litigation against ACMC was enjoined under the terms of the 1993 Confirmation Order once ACMC withdrew from the CCR.
10. NGC Legal Representative's Motion to Terminate Channeling Order. On June 22, 2000, Sander L. Esserman, as counsel for the legal representative for unknown asbestos disease claimants in the NGC Reorganization Cases (the "NGC Legal Representative") moved to terminate the Channeling Order that was protecting New NGC from Asbestos Claims. In essence, the NGC Legal Representative argued that the remedies of the NGC Settlement Trust should be deemed to be exhausted because the NGC Settlement Trust could not pay anywhere near the full value of each claim as it was presented. ACMC and the NGC Settlement Trust supported the motion.
11. Alternate Claims Facility Proposals. On July 28, 2000, the NGC Settlement Trust and New NGC both submitted proposals in the NGC Reorganization Cases setting forth their respective visions for the procedures and settlement criteria for processing claims in the Alternate Claims Facility. The NGC Legal Representative and the BI Fund Advisory Committee (the "BI TAC"), which was appointed in the 1993 Reorganization Plan to safeguard the interests of current asbestos bodily injury claimants, commented on the proposals for an Alternate Claims Facility. After a series of negotiations, the NGC Settlement Trust, New NGC, the BI TAC and the NGC Legal Representative submitted an agreed Alternate Claims Facility, based on the outline of administrative claims procedures provided in the 1993 Reorganization Plan, with several reserved areas of disagreement to be resolved by the Bankruptcy Court.
12. Opinion Approving Alternate Claims Facility. Acting in the NGC Reorganization Cases, the Bankruptcy Court held hearings in September and October 2000 to consider the proposed Alternate Claims Facility and the NGC Legal Representative's motion to terminate the Channeling Order. In a comprehensive Memorandum Opinion and Order dated October 27, 2000 (the "October 27, 2000 Memorandum Opinion"), the Bankruptcy Court resolved the differences between the parties with respect to the Alternate Claims Facility and approved the implementation of such Facility. In addition, the Bankruptcy Court found that payment by the NGC Settlement Trust of a small percentage of the value of an Asbestos Claim did not resolve such Asbestos Claim in a manner sufficient to justify the continuation of the Channeling Order. The Bankruptcy Court ruled that it would terminate the Channeling Order protecting New NGC from successor liability lawsuits with respect to Asbestos Claims if New NGC did not provide a specified amount of funding to the NGC Settlement Trust by December 31, 2000, and then thereafter at specified intervals.
13. Consolidated Appeals. New NGC and the NGC Legal Representative both filed appeals with respect to the October 27, 2000 Memorandum Opinion. This appeal was consolidated with several other appeals of Bankruptcy Court rulings that terminated the Channeling Order as to certain individual asbestos bodily injury claimants who had filed motions requesting that relief in the latter half of 2000. New NGC also filed a motion for a stay pending appeal which was granted, and thereafter extended by agreement.
14. Negotiation to Resolve Disputed Issues. After the October 27, 2000 Memorandum Opinion was issued, ACMC and the NGC Settlement Trust, New NGC, Sander L. Esserman as NGC Legal Representative, and certain representatives of holders of Asbestos Claims, including but not limited to the members of the BI TAC, engaged in extensive settlement discussions over many months to resolve all the disputed issues. ACMC engaged its legal counsel to conduct extensive legal research on, among other things, the viability of successor liability theories against New NGC by Asbestos Claimants under the laws of the states where the most significant number of asbestos-related lawsuits were filed, and concluded that such claimants would have great difficulty successfully asserting such claims. ACMC shared this research with the NGC Legal Representative and the members of the BI TAC, who conducted their own due diligence analysis with respect to the question of New NGC's potential liability under applicable state successor laws. In addition, given that New NGC was vigorously defending any effort to lift the Channeling Order, including by filing the Consolidated Appeals and successfully obtaining a stay of rulings lifting the Channeling Order pending appeal, ACMC, the NGC Settlement Trust, the NGC Legal Representative and the members of the BI TAC concluded there was substantial uncertainty about when, if ever, any Asbestos Claimant would have an opportunity to attempt to bring a successor liability action against New NGC. Having reviewed and analyzed the various legal and factual issues with respect to New NGC's potential successor liability to Asbestos Claimants, ACMC, the NGC Settlement Trust, the NGC Legal Representative and the members of the BI TAC concluded that pursuing a reasonable settlement with New NGC was advisable.
15. New NGC Settlement Executed. Ultimately, the focus of the discussions among the parties (ACMC, the NGC Settlement Trust, New NGC, the BI TAC, the NGC Legal Representative and certain other law firms representing substantial numbers of bodily injury claimants) became the amount that New NGC would agree to fund in exchange for permanent injunctive protection, under section 524(g) of the Bankruptcy Code, from Asbestos Claims arising from or related to alleged exposure to Old NGC asbestos-containing products. In these discussions, Alan Kahn (who is a director of ACMC and a trustee of the NGC Settlement Trust) and W.D. Hilton, Jr. (a director and President of ACMC and the Executive Director of the NGC Settlement Trust) acted as the principal negotiators on behalf of ACMC and the NGC Settlement Trust. On or about April 23, 2002, the parties to the negotiation entered into a letter agreement that set forth the fundamental terms of a settlement (the "New NGC Settlement") under which New NGC would pay $347 million to resolve, among other issues, any alleged liability of New NGC, under successor liability principles or otherwise, for Asbestos Claims. Among other things, the New NGC Settlement required ACMC to file this chapter 11 case and seek confirmation of a plan of reorganization that would (a) incorporate the terms of the settlement set forth in the letter agreement; (b) meet the requirements of section 524(g) of the Bankruptcy Code; and (c) provide for the entry of a permanent injunction protecting New NGC and certain other persons from any and all future litigation relating to Asbestos Claims.
16. Drafting of Plan and Plan Documents. After executing the New NGC Settlement, ACMC and its counsel began preparing documents to commence a chapter 11 case to implement the New NGC Settlement, including drafts of the Plan and the Plan Documents. Each of these documents was extensively examined and negotiated by ACMC, the NGC Settlement Trust, New NGC, the NGC Legal Representative (who the parties anticipated would also be the legal representative in a new chapter 11 case for ACMC because of his extensive knowledge and involvement on behalf of ACMC's future asbestos claimants and his extensive participation in the negotiation of the New NGC Settlement), and the members of the BI TAC (who the parties anticipated would be among the members of the official committee of unsecured creditors appointed in an ACMC chapter 11 case). Professor Walter J. Taggart (who is a director of ACMC and a trustee of the NGC Settlement Trust) and W.D. Hilton, Jr. were the principal negotiators of the Plan and Plan Documents on behalf of ACMC and the NGC Settlement Trust. Early in the process, the parties to the negotiation agreed that the Claims Resolution Procedures, including the payment schedule, that would be proposed in connection with the Plan would be based in large measure on the Alternate Claims Facility approved by the Bankruptcy Court in the October 27, 2000 Memorandum Opinion. Nonetheless, the Claims Resolution Procedures were extensively examined and negotiated by counsel for ACMC, the NGC Settlement Trust, the NGC Legal Representative and the members of the BI TAC and numerous drafts of the Claims Resolution Procedures were circulated before the parties agreed on their form.
B. ACMC Reorganization Case
17. The ACMC Bankruptcy Filing. On August 19, 2002, ACMC commenced this Reorganization Case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. No trustee or examiner has been appointed in the Reorganization Case. ACMC has continued to operate its business as debtor in possession in accordance with sections 1107(a) and 1108 of the Bankruptcy Code.
18. Complex Chapter 11 Case. Due to the large amount of its total debt, as well as the enormous number of potential parties in interest, ACMC filed on the Petition Date a Notice of Designation of Complex Chapter 11 Bankruptcy Case pursuant to the Bankruptcy Court's General Order 00-6. The Bankruptcy Court entered an order designating the Reorganization Case as a Complex Chapter 11 case on August 21, 2002.
19. Appointment of Legal Representative in Reorganization Case. On the Petition Date, ACMC filed its Motion of the Debtor for Entry of Interim and Final Orders Authorizing the Appointment of Sander L. Esserman As Legal Representative. On August 21, 2002, the Court entered an interim order appointing Sander L. Esserman as the legal representative (the "Legal Representative") for any and all persons described in section 524(g)(4)(B)(i) of the Bankruptcy Code who may assert demands (as that term is defined in section 524(g)(5) of the Bankruptcy Code) against ACMC, namely the Future Asbestos Claimants. The Court entered a final order appointing Sander L. Esserman as the Legal Representative on September 25, 2002. Mr. Esserman is particularly well qualified to act as Legal Representative because he previously acted as counsel to Old NGC's Legal Representative, Daniel M. Phillips, during the NGC Reorganization Cases and later became the NGC Legal Representative upon the death of Daniel M. Phillips. Mr. Esserman actively and extensively participated on behalf of Future Asbestos Claimants in the pre-Petition Date negotiation of the Plan, the New NGC Settlement, the Claims Resolution Procedures and, in connection with the NGC Reorganization Cases, the Alternate Claims Facility.
20. Appointment of Creditors' Committee Members. On August 20, 2002, the Office of the United States Trustee appointed the members of the BI TAC as the members of the Creditors' Committee. These individuals are well suited to adequately represent the interests of holders of Current Asbestos Claims. They not only have been extensively involved with ACMC since the NGC Reorganization Cases, including actively participating in the pre-Petition Date negotiation of the Plan, the New NGC Settlement, and the Claims Resolution Procedures, but also collectively represent the entire spectrum of asbestos bodily injury claims — from mesothelioma claims to unimpaired pleural claims.
21. Asbestos Claimant Notice Procedures. On the Petition Date, ACMC filed its Motion of the Debtor for Interim and Final Orders Approving Asbestos Claimant Notice Procedures and Authorizing Debtor to Omit Individual Asbestos Claimants From Mailing Matrix (the "Asbestos Claimant Notice Motion"). The Asbestos Claimant Notice Motion requested entry of interim and final orders approving certain notice procedures with respect to Asbestos Claimants. In short, the Asbestos Claimant Notice Motion requested the Bankruptcy Court's approval for ACMC to send all required notices, mailings and communications to Asbestos Claimants in care of their known counsel of record at such counsels' last known address. In addition, and correspondingly, ACMC sought Bankruptcy Court authorization to omit the names and addresses of individual Asbestos Claimants from the creditor mailing list required by N.D. TX L.B.R. 1007.2 and instead list only known counsel of record for Asbestos Claimants on such creditor mailing list. The Bankruptcy Court entered an interim order granting the Asbestos Claimant Notice Motion on August 21, 2002. No objections to the entry of a final order with respect to the Asbestos Claimant Notice Motion were filed after parties in interest were given notice as described below; thus, the Bankruptcy Court entered a final order granting the Asbestos Claimant Notice Motion on September 20, 2002 (the "Asbestos Claimant Notice Order").
22. Notice of Case Commencement. On the Petition Date, ACMC also filed its Motion for Order Approving Form and Manner of Service of Case Commencement Notice (the "Case Commencement Notice Motion"). The Case Commencement Notice Motion requested Bankruptcy Court approval of the form and manner of service of the Notice of Case Commencement and Interim Order Approving Asbestos Claimant Notice Procedures and Modification to Mailing Matrix Requirements (the "Case Commencement Notice"). Among other things, the Case Commencement Notice notified parties in interest of the Bankruptcy Court's entry of the interim order granting the Asbestos Claimant Notice Motion, as well as the date, time and place of final hearing and procedures for objecting to the Asbestos Claimant Notice Motion. The Bankruptcy Court entered an order approving the form and service of the Case Commencement Notice on August 21, 2002.
23. Service of Certain Initial Case Documents to Known Parties in Interest. On August 27, 2002, ACMC's official claims, balloting and mailing agent, Trumbull Services, LLC ("Trumbull"), served by mail the following documents on all known parties in interest in the Reorganization Case: (1) the Case Commencement Notice; (2) the Order Granting Complex Chapter 11 Bankruptcy Case Treatment; (3) a Notice of Final Hearing and Objection Deadline with Respect to Motion of Asbestos Claims Management Corporation for Interim and Final Orders Approving Asbestos Claimant Notice Procedures and Authorizing Debtor to Omit Individual Asbestos Claimants from Mailing Matrix; (4) the Interim Order Approving Asbestos Claimant Notice Procedures and Authorizing Debtor to Omit Individual Asbestos Claimants from Mailing Matrix; and (5) the Asbestos Claimant Notice Motion (collectively, the "Trumbull Initial Service Documents"). In addition to the foregoing Trumbull Initial Service Documents, Trumbull mailed a form of cover letter to attorneys and/or law firms that ACMC informed Trumbull may potentially represent holders of Asbestos Claims (the "Form Cover Letter"). Among other things, the Form Cover Letter informed such attorneys and/or law firms that (i) ACMC had filed the Reorganization Case, (ii) that they were receiving the Form Cover Letter and the Trumbull Initial Service Documents because ACMC's records indicated that they may represent individuals that have asserted asbestos-related bodily injury claims against ACMC; and (iii) that they could obtain a list of such individuals by accessing ACMC's chapter 11 website at www.ngcbitrust.org and inputting a username and password (unique to each attorney or law firm that received the Form Cover Letter) included with the Form Cover Letter. Trumbull's affidavits certifying to service of the Trumbull Initial Service Documents and the Form Cover Letter were filed on or about August 30, 2002.
In accordance with the interim order granting the Asbestos Claimant Notice Motion, such documents were served on Asbestos Claimants through their known counsel of record.
24. Publication of Case Commencement Notice. Trumbull published the Case Commencement Notice in (i) the August 27, 2002 editions of the Wall Street Journal (National Edition) and USA Today; (ii) the September 6, 2002 edition of Mealey's Asbestos Litigation Report; and (iii) the August 29, 2002 edition of Andrew's Asbestos Reporter. Trumbull's affidavits certifying as to this publication notice were filed on or about September 9, 2002 and September 18, 2002, respectively.
25. Notice to Potential Future Asbestos Claimants. The Debtor did not know the identity of any of the Future Asbestos Claimants nor was there any practicable way for the Debtor to identify those claimants. The publication of the Case Commencement Notice, discussed above in paragraph 24, was reasonably calculated to apprise Current Asbestos Claimants and potential Future Asbestos Claimants of the pendency of the ACMC Reorganization Case, thus affording them the opportunity to appear and be heard. The publication of the Confirmation Hearing Notice, discussed below in paragraph 36, was reasonably calculated to apprise Current Asbestos Claimants and potential Future Asbestos Claimants of the Plan, the Disclosure Statements, the proposed issuance of the injunctions under the Plan pursuant to sections 524(g) and 105(a) of the Bankruptcy Code, the Confirmation Hearing, the means for accessing copies of the Plan and Disclosure Statements and the deadlines for voting on the Plan and objecting to confirmation, thus affording them the opportunity to appear and be heard with respect to such matters. The publication of the Legal Representative Notice on April 7, 2003, discussed below in paragraph 44, provided additional specific notice to potential Future Asbestos Claimants, also affording them the opportunity to appear and be heard. These communication procedures constitute the best notice to potential Future Asbestos Claimants reasonably practicable under the facts and circumstances of this case.
26. Motion for Partial Withdrawal of Reference. On the Petition Date, ACMC filed the Debtor's Motion for Partial Withdrawal of the Reference (the "Motion for Partial Withdrawal of Reference") and a Brief of Asbestos Claims Management Corporation In Support of Motion for Partial Withdrawal of Reference. The Bankruptcy Court conducted a status conference with respect to the Motion for Partial Withdrawal of Reference on September 19, 2002, and issued a Report to District Court on Motion to Withdraw Reference recommending that the District Court withdraw the reference with respect to Confirmation of the Plan and the entry of the Supplemental Injunction. On March 3, 2003, the District Court entered an order withdrawing the reference. The District Court, however, referred to the Bankruptcy Court the responsibility to conduct the Confirmation Hearing, and directed the Bankruptcy Court to make a recommendation to the District Court relative to Confirmation of the Plan and entry of the Supplemental Injunction. The Bankruptcy Court has conducted the Confirmation Hearing in light of this partial referral of the partially withdrawn reference.
27. Claims Bar Date. On September 20, 2002, after proper notice and a hearing, the Bankruptcy Court set October 31, 2002 (or in the case of Governmental Units, February 17, 2003) at 4:00 p.m. Central Time as the claims bar date (the "Claims Bar Date") with respect to all Claims, other than the following "Excluded Claims": (a) any Claim that had already been properly filed against ACMC, with the Clerk of the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, in the form and manner required by Bankruptcy Rules 3003 and 9009 and on a claim form that substantially conformed to Official Form No. 10; (b) any Claim that (i) was listed on the Schedules, (ii) was not described as "disputed," "contingent," or "unliquidated" on the Schedules, and (iii) was in the same amount and of the same nature as set forth in the Schedules; (c) an administrative expense of ACMC's chapter 11 case under section 503(b) or 507(a) of the Bankruptcy Code; (d) a Claim that had been allowed by an order of the Bankruptcy Court entered on or before the Claims Bar Date; and (e) an asbestos-related bodily injury claim, including but not limited to a claim based on the rejection or alleged breach of a written settlement agreement with respect to such asbestos-related bodily injury claim.
28. Notice of Claims Bar Date. On September 25, 2002, Trumbull served notice of the Bar Date Order, in the form approved by the Bankruptcy Court (the "Claims Bar Date Notice"), along with a proof of claim form, to (i) the Office of the United States Trustee for the Northern District of Texas; (ii) counsel for the official creditors' committee; (iii) all known potential holders of Claims (other than Excluded Claims) listed (or contemplated to be listed) on the Schedules at the addresses stated therein; (iv) all counter-parties to executory contracts and unexpired leases (other than BI Settlement Agreements) listed (or contemplated to be listed) on the Schedules at the addresses listed therein; (v) the District Director of Internal Revenue for the Northern District of Texas; and (vi) all Entities that filed notices of appearance or requests for notice pursuant to Bankruptcy Rule 2002. Trumbull filed an affidavit to this effect on October 1, 2002. The Claims Bar Date Notice notified the parties of the Claims Bar Date, and contained information with respect to who must file a proof of claim, the procedures for filing a proof of claim, and the consequences of failing to timely file a proof of claim. Trumbull also gave notice of the Bar Date Order via publication of a form of notice approved by the Bankruptcy Court in the national edition of The Wall Street Journal and USA Today on September 30, 2002, which was at least twenty (20) days prior to the Claims Bar Date. Debtor's counsel filed affidavits to this effect on October 11, 2002.
29. Disallowance/Withdrawal of all Secured Claims. Priority Claims,Class 3 Claims and Class 6 Claims. ACMC did not schedule, and does not believe that it has any, unsecured creditors other than holders of Asbestos Claims. ACMC objected to each proof of claim that was filed in the Reorganization Case by the Claims Bar Date. As a result of orders entered after the Bankruptcy Court held a hearing with respect to such objections on February 7, 2003, many such proofs of claim were either withdrawn or disallowed with prejudice to refiling, except to the extent the proof of claim asserts an Asbestos Claim in Class 4 or Class 5 of the Plan, which can be asserted pursuant to the Claims Resolution Procedures. The only proofs of claim remaining were filed by New NGC, John Crane, Inc., Dresser Industries, Kellogg Brown Root, the CCR and current or former members of the CCR. The claims of John Crane, Inc., Dresser Industries, and Kellogg Brown Root are to be treated and allowed or disallowed as Asbestos Claims. These claims will be enjoined by the Supplemental Injunction. Any remaining Secured Claims, Priority Claims, Class 3 Claims and Class 6 Claims will be released (in the case of New NGC), or withdrawn with prejudice (in the case of the CCR and its current or former members) if the CCR Reimbursement Agreement Settlement is implemented. No Governmental Unit filed a proof of claim by the February 17, 2003 Claims Bar Date set for such claims. Each claim listed on the Debtor's schedules was described as disputed, contingent and/or unliquidated.
30. Filing of the Disclosure Statements and Plan. On December 12, 2002, ACMC filed its Third Amended Plan as well as a Disclosure Statement With Respect to Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for Asbestos Claims Management Corporation (the "Disclosure Statement") and a condensed Asbestos Claimant Disclosure Statement With Respect to Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for Asbestos Claims Management Corporation (the "Asbestos Claimants Disclosure Statement" and collectively with the Disclosure Statement, the "Disclosure Statements").
31. The Disclosure Statements Order. On December 16, 2002, after proper notice and a hearing, the Bankruptcy Court entered an Order (I) Approving the Disclosure Statements, (II) Approving the Form of Solicitation Letter, (III) Fixing the Date, Time and Place for the Confirmation Hearing, (IV) Approving the Procedures and Deadlines for Objecting to Confirmation of the Plan, and (V) Approving the Form and Manner of Service of the Amended Confirmation Hearing Notice (the "Disclosure Statements Order"). Among other things, the Disclosure Statements Order (i) approved the Disclosure Statement as containing adequate information for all creditors (including the Asbestos Claimants) and interest holders; (ii) approved the Asbestos Claimant Disclosure Statement as containing adequate information for Asbestos Claimants and provided that the Asbestos Claimant Disclosure Statement could be sent to such claimants in lieu of the Disclosure Statement; and (iii) approved the form and manner of service of notice concerning the date, time and place of the Confirmation Hearing (the "Confirmation Hearing Notice"). The Disclosure Statements and the Plan contained conspicuous language, in bold-faced type, notifying parties that the Plan proposed the Injunctions, including the Supplemental Injunction and the Asbestos Insurance Company Injunction under sections 524(g) and 105(a) of the Bankruptcy Code. In addition, these documents in conspicuous boldfaced type specifically described the nature of the Injunctions and identified the entities that would be subject to the Injunctions.
The Disclosure Statements Order was entered on the same day as the Voting Procedures Order (defined below). The Disclosure Statements Order and the Voting Procedures Order contained requirements with respect to mailing the Confirmation Hearing Notice that were not identical and would have required a duplicative mailing of the Confirmation Hearing Notice within a few days of each other. On December 19, 2002, the Bankruptcy Court signed an Order Relieving Debtor From Duplicative Mailing Requirement that relieved ACMC from the Disclosure Statements Order's requirement to mail the Confirmation Hearing Notice on December 19, 2002.
32. The Voting Procedures Order. On December 16, 2002, after notice and a hearing, the Bankruptcy Court entered the Voting Procedures Order. The Voting Procedures Order governed (i) the contents and manner of service of the solicitation materials by which ACMC solicited votes with respect to the Plan; (ii) the procedures for voting and tabulation of votes, (iii) the forms of ballots; and (iv) the procedures for allowing claims for voting purposes. The Voting Procedures Order provided, among other things, that asbestos plaintiffs' firms could vote on behalf of their asbestos clients provided they had authorization to do so from such clients. The Voting Procedures Order provided that such votes either could be cast in paper form or through internet-based voting. The procedures for internet-based voting were approved by the Bankruptcy Court in the Voting Procedures Order.
33. The Disclosure Statements the Plan and Ballots Distributed. In accordance with the Voting Procedures Order, the materials used by ACMC to solicit votes with respect to the Plan included the following: (i) the court approved Confirmation Hearing Notice, (ii) the Disclosure Statements Order, (iii) the Disclosure Statement as approved by the Bankruptcy Court, with (among other exhibits) a copy of the Plan attached as an exhibit thereto, (iv) the solicitation letter executed by the Legal Representative and the Creditors' Committee members, and (v) one or more appropriate ballots, together with voting instructions and information relative to the return of the ballots (collectively, the "Solicitation Package"). On December 21, 2002, in accordance with the Voting Procedures Order and the Disclosure Approval Order (as modified by the Order Relieving Debtor From Duplicative Mailing Requirement), Trumbull transmitted true and correct copies of the Solicitation Package by first class United States mail, hand delivery or overnight delivery to (i) known counsel for all persons or entities that timely filed proofs of claim or proofs of interest against the Debtor that were not disallowed by the Bankruptcy Court or withdrawn on or before the date that the Solicitation Package was mailed, (ii) all persons or entities listed in the Debtor's Schedules at the addresses contained therein and all other known holders of Claims against or Interests in the Debtor, if any, including, but not limited to, any person or entity that had filed with the Bankruptcy Court a notice of the transfer of a claim under Bankruptcy Rule 3001(e), other than individual Asbestos Claimants who were represented by counsel known to ACMC (pursuant to the order granting the Asbestos Claimant Notice Motion, each of these individual Asbestos Claimants were solicited by sending the Solicitation Package to their counsel of record), (iii) known counsel to any individual Asbestos Claimant at such counsel's last known address, (iv) the Securities and Exchange Commission, and (v) the Office of the United States Trustee. An affidavit to this effect was filed by Trumbull on January 9, 2003. In addition to the materials contained in the Solicitation Package, Trumbull sent to known counsel for individual creditors in Class 4 (Current Asbestos Claims) and Class 5 (BI Settlement Claims) a copy of the Asbestos Claimant Disclosure Statement (which included (i) the website address where copies of the Plan and Disclosure Statement could be downloaded and (ii) instructions to obtain a paper copy of these documents from Trumbull) and master Asbestos Claim ballots (collectively, with all the materials in the Solicitation Package except the comprehensive Disclosure Statement, the "Asbestos Claimants Solicitation Package"). An affidavit to this effect was filed by Trumbull on January 9, 2003.
34. Service of Asbestos Claimant Solicitation Packages to Individual Asbestos Claimants. The Voting Procedures Order required counsel for any individual Current Asbestos Claimant and/or BI Settlement Claimant who, as of January 11, 2003, did not have authority under applicable state non-bankruptcy law to vote on behalf of such Claimant to forward an Asbestos Claimant Solicitation Package to such Claimant so as to be received no later than January 20, 2003. Pursuant to the Voting Procedures Order, counsel to Asbestos Claimants could obtain as many copies of the Asbestos Claimants Solicitation Package as needed from Trumbull. Alternatively, counsel to Asbestos Claimants could, at their option, request Trumbull to transmit the Asbestos Claimants Solicitation Package to any or all of their Asbestos Claimant clients. Trumbull received and responded to requests to forward Asbestos Claimant Solicitation Packages to approximately 20,000 Asbestos Claimants, and an affidavit of mailing demonstrating compliance with such requests was filed by Trumbull on February 6, 2003.
35. Affidavits of Service of Solicitation Package. As described above, the following affidavits of mailing evidencing the service of the Solicitation Packages and Asbestos Claimant Solicitation Packages in compliance with the Bankruptcy Court's orders were filed with the Bankruptcy Court:
(a) Affidavit of Mailing of Law Firm Solicitation Materials by Brendan Halley of Trumbull Services, LLC filed January 9, 2003.
(b) Affidavit of Mailing of Solicitation Materials by Brendan Halley of Trumbull Services, LLC filed January 9, 2003.
(c) Affidavit of Mailing of Asbestos Claimant Solicitation Packages by Brendan Halley of Trumbull Services, LLC filed February 6, 2003.
36. Publication of Confirmation Hearing Notice. Pursuant to the Disclosure Statements Order, ACMC caused the Confirmation Hearing Notice to be published in the Wall Street Journal (National Edition) and USA Today on December 19, 2002. An affidavit to this effect was filed by Trumbull on April 17, 2003. The Confirmation Hearing Notice that was published (and mailed as set out above) contained, among other things, (i) conspicuous bold-faced language notifying parties that the Plan proposed the Injunctions, including the Supplemental Injunction and the Asbestos Insurance Company Injunction under sections 524(g) and 105(a) of the Bankruptcy Code, briefly describing the nature of the Injunctions and identifying the entities that would be subject to the Injunctions, (ii) the date, time and place set for the hearing on Confirmation of the Plan, (iii) the website address where parties could download electronic copies of the Disclosure Statement and the Plan, (iv) the deadline for submitting ballots with respect to the Plan, and (v) the February 19, 2003 deadline to file objections to Confirmation of the Plan.
37. The Continuance Order. On February 28, 2003, the Bankruptcy Court signed an Order Granting Ex Parte Motion of the Debtor to (I) Continue Confirmation Hearing and All Other Matters Scheduled To Be Heard March 4 and 5, 2003 and (II) Establish Response Deadlines to Objections to Confirmation of the Plan (the "Continuance Order"). The Continuance Order (i) established April 24 and 25, 2003 as the date for the Confirmation Hearing; (ii) established April 14, 2003 as the date for any responses to objections to confirmation of the Plan; and (iii) provided procedures for notifying parties in interest of the continued Confirmation Hearing date. The Continuance Order did not extend the time for filing objections to Confirmation of the Plan.
38. Sufficiency of Notice of Confirmation Hearing. Notice of the Confirmation Hearing was provided by ACMC to all parties in interest in accordance with the terms of: (a) the Disclosure Statements Order (as modified by the Order Relieving Debtor From Duplicative Mailing Requirement) (b) the Voting Procedures Order; (c) the Continuance Order; and (d) the Asbestos Claimant Notice Procedures Order. Such notice satisfies the requirements of the Bankruptcy Code and the Bankruptcy Rules, and therefore no further notice is required.
39. Plan Confirmation Brief and Plan Objections. Objections to Confirmation of the Plan were timely filed by (i) John Crane, Inc. ("John Crane Objection"), (ii) American Motorists Insurance Company (the "AMICO Objection"); and (iii) the law firm of Goldberg, Persky, Jennings White, P.C., purportedly on behalf of various Current Asbestos Claimants ("Goldberg Objection"). An untimely objection to Confirmation of the Plan was filed by Cascino Vaughan Law Offices, purportedly on behalf of various Current Asbestos Claimants (the "Cascino Objection"). As described in paragraphs 94(a) and (b) below, the John Crane Objection and the AMICO Objection were consensually resolved at or prior to the Confirmation Hearing, and have been withdrawn. As described in paragraphs 94(c) and (d) below, the Bankruptcy Court heard argument on the Goldberg Objection at the Confirmation Hearing and determined that no argument was necessary regarding the Cascino Objection because such objection was not prosecuted at the Confirmation Hearing. The Bankruptcy Court overruled both objections. On April 14, 2003, ACMC filed an extensive brief in support of confirmation of the Plan and in opposition to the three Plan objections that had been timely filed. The Legal Representative also filed an opposition to the Goldberg Objection. On April 18, 2003, ACMC filed a short correction to the brief. On April 23, 2003, ACMC filed its response to the Cascino Objection.
40. The Confirmation Hearing. On April 24, 2003 and May 1, 2003, the Bankruptcy Court conducted the Confirmation Hearing pursuant to sections 1128 and 1129 of the Bankruptcy Code to consider the Confirmation of the Plan.
41. Debtor's Representatives at Confirmation Hearing. By permission of the Bankruptcy Court, and with no objection, the Debtor presented the testimony of its confirmation witnesses by the affidavits of W.D. Hilton, Jr. (President of ACMC), Dr. Mark Peterson (ACMC's claims' expert), Daniel McSwigan (Representative of Trumbull), Sander L. Esserman (the Legal Representative) and Russell W. Budd (Chairman of the Creditors' Committee), each of which were accepted by the Bankruptcy Court in lieu of live testimony. Each affiant was either available for cross-examination in the courtroom, or could have become available on very short notice, but no party sought to cross-examine them on their testimony or objected to the Bankruptcy Court's consideration of the affidavits as evidence in support of Confirmation of the Plan.
42. Credibility of Testimony. The testimony contained in each of the confirmation affidavits is credible and uncontroverted.
43. Confirmation Exhibits. In compliance with the Local Rules of the Bankruptcy Court, the Debtor circulated an exhibit list and proposed exhibits to all parties in interest, including Plan objectors. At the Confirmation Hearing, the Debtor offered ACMC Exhibits 1-67 into evidence and, with no objections, the Bankruptcy Court admitted ACMC Exhibits 1-67 into evidence.
44. Legal Representative's Participation in Reorganization Case.
(a) The Legal Representative has actively participated in all applicable phases and proceedings in the Reorganization Case that have affected the rights of Future Asbestos Claimants. The Legal Representative was actively involved in both the pre-Petition Date and post-Petition Date negotiations with respect to elements of the Plan, the Plan Documents and the Claims Resolution Procedures that impact Future Asbestos Claimants. The Legal Representative has received applicable notices, including notice of the Confirmation Hearing. All actions taken by the Legal Representative in connection with the Reorganization Case were within the scope of his appointment and were performed diligently and competently by him. On April 7, 2003, ACMC published a Bankruptcy Court-approved Notice of Legal Representative's Appointment, Participation and Support of Plan Confirmation on Behalf of Future Asbestos Claimants (the "Legal Representative Notice") in the Wall Street Journal (National Edition) and USA Today. Among other things, the Legal Representative Notice sought to advise potential Future Asbestos Claimants of the Legal Representative's appointment and participation in the Reorganization Case on their behalf, his participation in negotiations resulting in the New NGC Settlement, Plan and Supplemental Injunction, his support for the New NGC Settlement, Plan and Supplemental Injunction, that he would appear at the Confirmation Hearing on behalf of Future Asbestos Claimants, that Future Asbestos Claimants would be bound by the New NGC Settlement, Plan and Supplemental Injunction, and that evidence of the adequacy of the Legal Representative's representation would be presented at the Confirmation Hearing. The Legal Representative, through his counsel, participated at the Confirmation Hearing and, through his confirmation affidavit and presentations made to the Court, demonstrated the adequacy of his representation of Future Asbestos Claimants and his support of the New NGC Settlement, Plan and Supplemental Injunction on behalf of Future Asbestos Claimants.
(b) The untimely Cascino Objection raised the question of the appropriateness of the post-Effective Date appointment of Sander L. Esserman as the Legal Representative for Future Asbestos Claimants under the NGC Bodily Injury Trust Agreement. As discussed more fully in paragraph 94(d) below, the Bankruptcy Court has overruled the Cascino Objection. Further, the Bankruptcy Court has heard no evidence of impropriety regarding, and finds no cause to deny, the post-Effective Date appointment of Mr. Esserman as Legal Representative for Future Asbestos Claimants, and believes that such appointment is appropriate, consistent with public policy and in the best interests of the Future Asbestos Claimants.
(c) Based on evidence presented at the Confirmation Hearing, the Court finds that the Legal Representative has acted with due diligence, reasonable prudence and has otherwise adequately represented the interests of the Future Asbestos Claimants in all respects and all phases of the NGC Reorganization Cases and the Reorganization Case. The Legal Representative neither holds nor represents an interest that is adverse to the interests of any Future Asbestos Claimant respecting the scope of his appointment. Any intra-class issues that exist within the class of Future Asbestos Claimants which could have presented any possible conflict among the Future Asbestos Claimants would also present intra-class issues among the holders of Current Asbestos Claims, and the resolution of any such competing interests was negotiated in the treatment to be afforded to Current Asbestos Claimants under the Plan. The treatment afforded to Future Asbestos Claimants under the Plan is identical to the treatment afforded to Current Asbestos Claimants. Thus, the intra-class issues, if any, that might have arisen relative to Future Asbestos Claims were protected through not only the Legal Representative's participation on behalf of Future Asbestos Claimants in the resolution of these issues, but also through the negotiation of substantially similar issues among the representatives of Current Asbestos Claimants, including the Creditors' Committee, which consists of asbestos plaintiffs' lawyers who represent asbestos claimants across a broad, representative range of disease categories and factual circumstances.
45. Creditors' Committee's Participation in Reorganization Case. The Creditors' Committee consists of asbestos plaintiffs' lawyers who represent asbestos claimants across a broad, representative range of disease categories and factual circumstances — from mesothelioma claimants to unimpaired pleural claimants. The Creditors' Committee has actively participated in the Reorganization Case and has been actively involved in both the pre-Petition Date and the post-Petition Date negotiations with respect to elements of the Plan, the Plan Documents and the Claims Resolution Procedures that impact Current Asbestos Claimants. In doing so, the Creditors' Committee considered and weighed the impact of the Plan and the Claims Resolution Procedures across the entire spectrum of Current Asbestos Claimants, including impaired and unimpaired claimants. The Creditors' Committee has received applicable notices, including notice of the Confirmation Hearing.
46. Support for Plan. At the Confirmation Hearing, Confirmation of the Plan was actively urged by the Debtor, the Creditors' Committee, the Legal Representative, New NGC and the NGC Settlement Trust (which owns 100% of the Interests in ACMC).
47. Classes of Claims and Interests. The following classes of Claims and Interests are treated under the Plan:
________________________________________________________________________ CLASS DESCRIPTION IMPAIRED/UNIMPAIRED ________________________________________________________________________ Unclassified Administrative Claims Unimpaired ________________________________________________________________________
Unclassified Priority Tax Claims Unimpaired ________________________________________________________________________
1 Priority Claims unimpaired ________________________________________________________________________
2 Secured Claims Unimpaired ________________________________________________________________________
3 Unsecured Claims Impaired ________________________________________________________________________
4 Claims and Demands Impaired ________________________________________________________________________
5 BI Settlement Claims Impaired ________________________________________________________________________
6 Penalty Claims Impaired ________________________________________________________________________
7 Interests Impaired ________________________________________________________________________
48. Tabulation of Ballots. Trumbull processed and tabulated all timely filed ballots with respect to the Plan in accordance with the requirements of the Voting Procedures Order, the Bankruptcy Code and the Bankruptcy Rules. The balloting procedures utilized in this Reorganization Case, including but not limited to the electronic voting procedures and use of master ballots by counsel for Asbestos Claimants, and the resulting voting with respect to the Plan were fair and properly conducted. All Ballots not timely filed by the Voting Deadline of February 19, 2003, were not tabulated by Trumbull. The failure to tabulate the untimely ballots was proper under the Voting Procedures Order; no party filing an untimely ballot demonstrated cause or excusable neglect for the Court to order that such untimely ballot should be included in the vote tabulation.
49. Voting Classes. The following voting Classes in the Plan voted to accept the Plan within the meaning of section 1126 of the Bankruptcy Code: Classes 4 and 5. Over 99.9% of the voting claimants in Class 4, by number and amount, voted to accept the Plan. Similarly, over 99.9% of the voting claimants in Class 5, by number and amount, have voted to accept the Plan. See ACMC Exhibit 11. The following Classes in the Plan were deemed to have rejected the Plan within the meaning of section 1126 of the Bankruptcy Code: Classes 6 and 7. Two ballots, one to accept and one to reject, were cast in Class 3. Under the Voting Procedures Order entered by the Bankruptcy Court, Class 3 ballots are only to be counted if the party casting the Class 3 ballot obtained an order from the Bankruptcy Court temporarily allowing its Class 3 Claim for voting purposes. The rejecting Class 3 ballot was cast by United States Gypsum Company ("U.S. Gypsum"). U.S. Gypsum withdrew its motion to allow its claim for voting purposes, which renders its Class 3 ballot invalid. The accepting Class 3 Ballot was filed by an alleged claimant that filed neither a proof of claim nor any motion to have its alleged Class 3 Claim temporarily allowed for voting purposes. Thus, the accepting Class 3 ballot is also invalid. Accordingly, there are no valid ballots that were cast in Class 3.
Classes 1 and 2 were not entitled to vote because they were deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. The Plan provides that Claimants in Class 6 and Interest Holders in Class 7 will not receive or retain any property under the Plan on account of such Claims or Interests and therefore are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.
50. Technical Modifications. On April 21, 2003, ACMC filed that certain Motion For Order Determining That the Technical Modifications To Debtor's Third Amended Plan of Reorganization Do No Adversely Affect Any Creditor (the "Technical Modifications Motion") pursuant to which ACMC sought to make certain technical modifications (the "Technical Modifications") to the Third Amended Plan. On April 24, 2003, the Bankruptcy Court entered an Order granting the Technical Modifications Motion. At the Confirmation Hearing, the Debtor notified the Bankruptcy Court of an additional clarifying change to section 1.1.136 of the Plan. That change, which is to be incorporated into the Confirmation Order, clarifies the definition of " Prostok Action" to include the new case number for a recently severed portion of the Prostok Action. Neither the Technical Modifications nor the clarifying change to section 1.1.136 adversely change the treatment of any Claims or Interests under the Plan. These modifications have been made in compliance with section 1127(a) of the Bankruptcy Code and Bankruptcy Rule 3019 and do not require resolicitation of the Plan. As a result, the Plan, as so modified, should be deemed accepted by all creditors and equity security holders who have previously accepted the Plan.
51. Proper Plan Proponent. ACMC is a proper proponent of a plan of reorganization pursuant to section 1121(a) of the Bankruptcy Code.
52. Compliance With Bankruptcy Rule 3016(b) and (c). The Plan is dated and identifies the name of the submitting Entity, in accordance with Bankruptcy Rule 3016(b). The Plan complies with Bankruptcy Rule 3016(c) with respect to each of the Injunctions provided in the Plan.
53. Compliance with Section 1129(a)(1) . Section 1122 and Section 1123(a)(1)-(7). The Plan complies with the applicable provisions of sections 1129(a)(1), 1122 and 1123(a)(1)-(7) of the Bankruptcy Code in that the evidence adduced at the Confirmation Hearing shows that:
(a) ACMC is a corporation organized under the laws of the State of Delaware and is a proper debtor under section 109 of the Bankruptcy Code.
(b) The Claims or Interest in each class are substantially similar to the other Claims or Interests in such class, as required by section 1122(a) of the Bankruptcy Code. A reasonable basis exists for the choices made in the Plan's classification scheme, and the classification of Claims and interests is fair, reasonable, and necessary. The Bankruptcy Code provides for the separate classification of Priority Claims (Class 1), Secured Claims (Class 2) and Interests (Class 7). Non-Compensatory Damages Claims (Class 6) are separately classified because such Claims are subordinated in payment to all Claims in the other Creditor Classes under the Bankruptcy Code. Although Classes 3, 4 and 5 all contain holders of unsecured claims that have the same relative priority against ACMC, separate classification of these claims is justified. The establishment of a separate class of Unsecured Claims in Class 3 recognizes that the claims allowance process for Class 3 Claims, which does not contain Asbestos Claims and is supervised by the Bankruptcy Court, is substantially different from the claims allowance process for Class 4 and Class 5 Claims — many of which will first arise and be asserted far into the future — which will be governed by the Claims Resolution Procedures. Although both Class 4 claimants and Class 5 claimants hold Asbestos Claims, these claimants are appropriately placed in separate classes because the holders of Asbestos Claims in Class 5, unlike the holders in Class 4, are parties to BI Settlement Agreements that arguably give the holders of Asbestos Claims in Class 5 the right to claim against ACMC not only for ACMC's share, under the CCR Producer Agreement, of the amount due under the BI Settlement Agreement, but under a joint and several liability theory also for the unpaid amount due by other bankrupt CCR members who are parties to such BI Settlement Agreements.
(c) The Plan complies with sections 1123(a)(1)-(7) of the Bankruptcy Code, in that the evidence adduced at the Confirmation Hearing shows the following:
(i) Article 2 of the Plan designates Classes of Claims, other than of a kind specified in section 507(a)(1), 507(a)(2) or 507(a)(8) of the Bankruptcy Code, and Classes of Interests as required by section 1123(a)(1) of the Bankruptcy Code.
(ii) Article 3 of the Plan specifies those Classes of Claims and Interests which are impaired and unimpaired as required by sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code and contains a specified treatment for each Class which is impaired. Briefly, with respect to impaired classes, the Plan contemplates that: (i) Class 3 Claims will receive their Pro Rata Share of the NGC Settlement Trust Class 3 Contribution; (ii) Classes 4 and 5 Claims will be resolved and paid in accordance with the Claims Resolution Procedures; (iii) Class 6 Claims shall receive no distribution; and (iv) Class 7 interests shall be cancelled and shall receive no distribution.
(iii) Article 3 of the Plan provides for the same treatment for each Claim or Interest in a particular Class, unless the holder of a particular Claim or Interest agrees to a less favorable treatment of such particular Claim or Interest, as required by section 1123(a)(4) of the Bankruptcy Code.
(iv) The Plan provides adequate means for its implementation, as required by section 1123(a)(5) of the Bankruptcy Code. The funding for the Plan derives from contributions from the NGC Settlement Trust, New NGC, the Settling Asbestos Insurance Companies, the Prostok Bondholder Settlement and the CCR Reimbursement Agreement Settlement. These contributions will generate in excess of $525 million of funding to implement the Plan, fund the NGC Bodily Injury Trust and pay Asbestos Claims. Articles 4, 8 and 10 and other provisions of the Plan provide adequate mechanisms for implementation of the Plan. Article 4 provides the framework for the creation and operation of Reorganized ACMC and the NGC Bodily Injury Trust, the Plan's vehicle for the resolution and payment of all Asbestos Claims asserted against the Debtor. This article is supplemented by the Plan's exhibits setting forth the NGC Bodily Injury Trust Agreement and Claims Resolution Procedures, as well as the Certificate of Incorporation and Bylaws, as restated and amended, of ACMC. Article 8 of the Plan sets forth the various transactions that will enable the Debtor to effectuate the Plan's terms, including the transfer of assets from the NGC Settlement Trust to Reorganized ACMC and the NGC Bodily Injury Trust and the various other corporate actions necessary for consummation. Finally, article 10 of the Plan details how the Debtor's intangible assets and liabilities, such as its causes of action, are being addressed by the Plan. Implementation of the NGC Bodily Injury Trust, and of distributions to holders of Asbestos Claims, is ensured by the provisions of the NGC Bodily Injury Trust Agreement and by the mechanisms set forth in the Claims Resolution Procedures. The engagement of TSI pursuant to the Comprehensive Services Agreement ensures that the NGC Bodily Injury Trust is administered by a claims facility experienced in the review, processing and payment of Asbestos Claims.
(v) Section 4.2 of the Plan provides that the certificate of incorporation of Reorganized ACMC shall, as of the Effective Date, be amended and restated in its entirety substantially in the form set forth in Exhibit F to the Plan. The Restated and Amended Certificate of Reorganization of Reorganized ACMC prohibits the issuance of nonvoting equity securities, as required by section 1123(a)(6) of the Bankruptcy Code.
(vi) The Plan sets forth (i) the initial President of Reorganized ACMC will be W.D. Hilton, Jr.; (ii) the initial directors of Reorganized ACMC will be Walter J. Taggart, Alan R. Kahn, Anne N. Foreman and W.D. Hilton, Jr.; (iii) the initial Trustees of the NGC Bodily Injury Trust will be Walter J. Taggart, Alan R. Kahn and Anne N. Foreman and the initial Executive Director of the NGC Bodily Injury Trust will be W.D. Hilton, Jr.; (iv) the initial members of the NGC Bodily Injury Trust Advisory Committee will be Mark H. Iola, Russell W. Budd and Robert Steinberg and (v) the initial legal representative to represent holders of Demands relative to the NGC Bodily Injury Trust will be Sander L. Esserman. The appointment of the identified individuals is endorsed by the Legal Representative and the Creditors' Committee. The sole objection to the appointment of several of these individuals was raised in the untimely filed Cascino Objection. For the reasons described in paragraph 94(d) below, the Cascino Objection is overruled in its entirety. Since prior to the Petition Date, each of the identified individuals has served in a similar capacity with the Debtor and the NGC Settlement Trust and each has substantial experience with issues impacting asbestos trusts generally and with the specific issues that will affect the NGC Bodily Injury Trust.
(vii) The Plan Documents provide for the appointment of successors to each of the foregoing as follows: (i) successor or new officers of Reorganized ACMC shall be elected by the board of directors of Reorganized ACMC; (ii) successor or new directors may be selected by a majority vote of the remaining directors of Reorganized ACMC; (iii) successor trustees of the NGC Bodily Injury Trust shall be filled by the unanimous vote of the remaining trustees, who shall consult the Legal Representative and the NGC Bodily Injury Trust Advisory Committee, and then obtain approval of the Bankruptcy Court; and (iv) a new Executive Director of the NGC Bodily Injury Trust shall be chosen by the trustees after consultation with the Legal Representative and the NGC Bodily Injury Trust Advisory Committee. The Debtor's selection of the above-referenced initial post-Effective Date officers, directors, trustees, NGC Bodily Injury Trust Advisory Committee members and legal representative, together with the Plan's provisions for the selection of successors relative to these positions, is in the best interests of Asbestos Claimants, creditors and equity security holders and consistent with public policy. As required by section 1123(a)(7) of the Bankruptcy Code, the Plan does not contain any provisions that are inconsistent with the interests of creditors and equity security holders or with public policy with respect to the manner of selection of any officer, director, or trustee under the Plan and any successor to such officer, director, or trustee.
54. Compliance With Sections 1129(a)(2) and (3). ACMC has complied with the applicable provisions of the of the Bankruptcy Code and the Bankruptcy Rules. ACMC solicited acceptances of the Plan in accordance with the requirements of section 1125(b) of the Bankruptcy Code, Bankruptcy Rule 3017, the Disclosure Statement Order and the Voting Procedures Order. The Plan is the result of vigorous, arm's-length bargaining among constituencies having very different and, in many instances, competing interests in the Reorganization Case. ACMC negotiated the Plan, the related Claims Resolution Procedures and the various settlements embodied in the Plan, with the participation of New NGC, the BI TAC, the NGC Legal Representative, the CCR, the Settling Asbestos Insurance Companies and others, including representatives of at least ten of some of the largest plaintiffs' asbestos firms in the country. Under the Plan, ACMC will reorganize and continue to do business, enabling creditors to receive the maximum recovery on their claims. The Reorganization Case has not been brought to frustrate creditors under the 1993 Reorganization Plan or otherwise to abuse the bankruptcy process. To the contrary, the Reorganization Case has been brought primarily because (a) ACMC cannot satisfy the claims of new creditors whose claims have arisen since confirmation of the 1993 Reorganization Plan or will arise after the Plan is confirmed, and (b) an opportunity exists to generate a substantial influx of cash pursuant to a provision of the Bankruptcy Code, section 524(g), that did not even exist in 1993, and to use that cash to substantially increase the amounts available to pay Asbestos Claimants. The Debtor has complied fully with the Bankruptcy Code and any applicable non-bankruptcy or state law. ACMC, its respective directors, officers, agents, and professionals and the other Persons involved in the negotiation and solicitation of acceptances of the Plan, including but not limited to the Creditors' Committee and the Legal Representative, have acted in good faith within the meaning of section 1125(e) of the Bankruptcy Code and are entitled to the protections afforded thereby.
55. Compliance With Section 1129(a)(4) . All payments made, or to be made, by ACMC or by a Person issuing securities or acquiring property under the Plan, for services or for costs and expenses in or in connection with the Reorganization Case, or in connection with the Plan and incident to the Reorganization Case, have been approved by, or are subject to the approval of, the Bankruptcy Court, as reasonable. Section 12.2(k) of the Plan provides for the Bankruptcy Court's retention of jurisdiction to hear and determine all applications for compensation of professionals and reimbursement of expenses arising out of or related to the Debtor's chapter 11 case. Intersecting with these Plan provisions are the provisions of that certain Administrative Order Under 11 U.S.C. § 105(a) and 329(a) Establishing Procedures For Interim Compensation and Reimbursement of Professionals By Non-Debtor the NGC Settlement Trust entered by the Bankruptcy Court on September 25, 2002 (the "Administrative Order"). This Administrative Order provides the interim compensation and reimbursement mechanisms that have governed the payment of professionals during the pendency of the case. In addition, this Administrative Order establishes the procedures for the submission of final fee applications for approval by the Bankruptcy Court. Similarly, the Bankruptcy Court will retain jurisdiction over charges incurred by the Estate under section 503(b) of the Bankruptcy Code.
56. Compliance With Section 1129(a)(5) . As required by section 1129(a)(5) of the Bankruptcy Code, ACMC has disclosed, in the Disclosure Statement and through evidence presented at the Confirmation Hearing, the identity, affiliation and nature of the compensation of each individual (including any insiders that will be employed or retained by Reorganized ACMC) proposed to serve, after Confirmation of the Plan, as a director, officer, or voting trustee of Reorganized ACMC or the NGC Bodily Injury Trust. Based on, among other things, the experience, education and/or particular skills of each, the manner of selection of each and any successors thereto, the appointment or continuance of the proposed directors, officers and voting trustees is consistent with the interests of the holders of Asbestos Claims, Claims and Interests and with public policy.
57. Compliance With Section 1129(a)(6) . No governmental regulatory commission has jurisdiction, or will have jurisdiction after Confirmation of the Plan, over rates of ACMC. Thus, the requirement of section 1129(a)(6) is not implicated by the Plan.
58. Compliance With Section 1129(a)(7) . The liquidation value of ACMC's assets is less than the value that will be realized by holders of Asbestos Claims, Claims and Interests under the Plan. Additional costs of administration would be incurred in a chapter 7 liquidation, including the costs and expenses of liquidation, the fees of the chapter 7 trustee, and the fees of professionals that a trustee would retain. The additional costs of a chapter 7 liquidation would diminish the recovery realized by creditors of ACMC's Estate. Liquidation of ACMC's assets under chapter 7 would also result in a loss to ACMC's Estate of the following assets, among other things: (i) the $347 million New NGC QSF Settlement Contribution; and (ii) the projected $10 million Prostok Bondholder QSF Contribution. The entities making these contributions are willing to do so only in connection with a chapter 11 plan containing a section 524(g) injunction, which is unavailable in chapter 7. As a result of the 1993 Reorganization Plan, the assets in the NGC Settlement Trust, as well as the assets held nominally by ACMC, are impressed with a trust for the benefit of both Current Asbestos Claimants and Future Asbestos Claimants that are the beneficiaries of the NGC Settlement Trust and may not be used solely to benefit Current Asbestos Claimants. As a result, the liquidation analysis, as admitted into evidence at the Confirmation Hearing as ACMC Exhibit 12 and incorporated into these Findings and Conclusions, properly demonstrates the likely outcome of a chapter 7 liquidation of ACMC: (i) holders of Administrative Claims, Priority Claims and Priority Tax Claims would receive the same distribution payment in full — under the Plan as in a chapter 7 case; (ii) holders of Class 3, Class 4 and Class 5 Claims would receive far less in a chapter 7 case than under the Plan; and (iii) holders of Class 6 Claims and Class 7 Interests would receive the same distribution — no distribution — under the Plan as in a chapter 7 case. ACMC submitted an alternative liquidation analysis as ACMC Exhibit 13 which assumed that only ACMC's assets (and no NGC Settlement Trust assets) would be available for distribution to ACMC's creditors and that the only asbestos creditors entitled to distributions would be Current Asbestos Claimants. Even under the alternative liquidation analysis reflected in ACMC Exhibit 13, the requirements of section 1129(a)(7) of the Bankruptcy Code are satisfied as to all creditors. In this scenario, Current Asbestos Claimants are projected to receive approximately 50% of the amount they will receive under the Plan.
59. Compliance With Section 1129(a)(8) . The Court accepts the voting tabulation submitted by Trumbull as an accurate summary of the results of the balloting on the Plan. Based on the voting tabulation, each Class that is impaired under the Plan has accepted the Plan by the requisite percentages set forth in section 1126(c) of the Bankruptcy Code, except for Classes 6 and 7 which, pursuant to section 1126(g) of the Bankruptcy Code, are deemed to have rejected the Plan, and Class 3, which had no valid ballots either accepting or rejecting the Plan. The Class 4 acceptance percentages were 99.9% by number and 99.9% by amount. The Class 5 acceptance percentages were 99.9% by number and 99.9% by amount. Even if all untimely filed ballots were counted in the vote tabulation, which the Bankruptcy Court finds is not proper, the acceptance percentages in each category would exceed 95% by number and amount.
60. Compliance with Section 1129(a)(9) . The Plan provides for the treatment of Administrative Claims, Priority Tax Claims and other Priority Claims entitled to priority pursuant to sections 507(a)(3)-(6) of the Bankruptcy Code in the manner required by section 1129(a)(9) of the Bankruptcy Code. Pursuant to articles 2 and 3 of the Plan, Administrative Claims (which includes claims entitled to priority under section 507(a)(1)), Priority Tax Claims (which includes claims entitled to priority under section 507(a)(7)) and Priority Claims (which includes claims entitled to priority under section 507(a) of the Bankruptcy Code other than Administrative Claims and Priority Tax Claims), will be paid in frill, in Cash, on the Distribution Date. To accommodate payment agreements with holders of Allowed Administrative Claims, the Plan provides for the payment of such Claims in accordance with the terms and conditions of the particular transaction relating to such liabilities and any agreements relating thereto.
61. Compliance With Section 1129(a)(10) . Because Classes 4 and 5 have accepted the Plan, at least one Class of Claims that is impaired under the Plan has accepted the Plan (determined without including any acceptance of the Plan by any insider of ACMC) as required by section 1129(a)(10) of the Bankruptcy Code.
62. Compliance With Section 1129(a)(11) . Reorganized ACMC will be able to satisfy its obligations under the Plan after Confirmation. The Plan is feasible, and the Confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of ACMC or the NGC Bodily Injury Trust. See, e.g., ACMC Exhibit 59. The Debtor has carefully structured the Plan and the NGC Bodily Injury Trust to provide appropriate mechanisms and funding to consummate the Plan with a high degree of certainty. Reorganized ACMC's ability to pay its operating expenses on an ongoing basis is ensured by the commitment of the NGC Bodily Injury Trust to pay any Reorganized ACMC Expenses. Additionally, the contributions from the NGC Settlement Trust, New NGC, the Senior Bondholder Defendants and the Settling Asbestos Insurance Companies ensure that the NGC Bodily Injury Trust will have sufficient capital upon the Effective Date to expeditiously begin processing Asbestos Claims and otherwise meet its financial commitments.
63. Compliance With Section 1129(a)(12) . In accordance with section 1129(a)(12) of the Bankruptcy Code, all fees payable under 28 U.S.C. § 1930 have been paid or the Plan provides for the payment of all such fees on the Effective Date. Since the inception of the Reorganization Case, such fees have been paid by the NGC Settlement Trust, on behalf of the Debtor, as they are billed. The Plan provides for the payment on the Effective Date of any then unpaid statutory fees. After the Effective Date, any statutory fees that are incurred will be Reorganized ACMC Expenses paid by the NGC Bodily Injury Trust.
64. Compliance With Section 1129(a)(13) . As of the Petition Date, ACMC had no obligation to pay retiree benefits, as that term is defined in section 1114 of the Bankruptcy Code.
65. Compliance With Section 1129(b) . The Plan does not discriminate unfairly against, and is fair and equitable with respect to, Classes 3, 6 and 7 and meets all the requirements of section 1129(b) of the Bankruptcy Code with respect to such Classes, because:
(a) Although the Claims in Class 3 have similar legal priority and status to the Claims in Classes 4 and 5, there is a reasonable basis for separate classification as to these classes because the Claims in Classes 4 and 5 are Asbestos Claims that will be addressed by the NGC Bodily Injury Trust, and the Class 4 and 5 Asbestos Claimants are entitled to receive the proceeds of various section 524(g) settlements that will be paid directly to the NGC Bodily Injury Trust. Claims in Class 3 are not Asbestos Claims and will not be addressed by the NGC Bodily Trust. No Classes of Claims or Interests junior to Class 3 will receive or retain any property under the Plan on account of such junior claim or interest; specifically no distribution is to be made under the Plan to holders of Class 6 Claims or Class 7 Interests on account of such Claims or Interests.
(b) Consistent with section 726(a)(4), Class 6 Penalty Claims will receive no distributions under the Plan, and no Class senior to Class 6 is receiving in excess of 100% distributions, nor are there any Classes of Claims or Interests junior to the claims of Class 6 that will receive or retain under the Plan any property on account of such junior claims or interests.
(c) The Holder of Interests in Class 7 will receive under the Plan what it would receive in a case under chapter 7 of the Bankruptcy Code. While Class 7 Interests will receive no distributions under the Plan, no Class senior to Class 7 is receiving in excess of 100% distributions and there are no Classes of Interests junior to the Interests classified in Class 7. Moreover, even though the NGC Settlement Trust, as the sole holder of the Class 7 Interests is technically deemed to have rejected the Plan, the NGC Settlement Trust strongly supports confirmation of the Plan.
(d) The Plan does not propose to pay, nor is it projected that the Plan will pay, over 100% distributions to any Class of Claimants or Interest Holders.
66. The Supplemental Injunction Complies With Sections 524(g) and 105(a) . The Supplemental Injunction is appropriate, and complies with the requirements of sections 524(g) and 105(a) of the Bankruptcy Code. The evidence adduced at the Confirmation Hearing shows the following:
(a) The Supplemental Injunction is to be implemented in connection with the Plan and formation of the NGC Bodily Injury Trust. See Plan at § 9.3.
(b) As of the Petition Date, the Debtor has been named as a defendant in personal injury, wrongful death or property damage actions seeking recovery for damages allegedly caused by the presence of, or exposure to, asbestos or asbestos-containing products. See ¶ 5 above.
(c) The NGC Bodily Injury Trust, upon the Effective Date, shall assume the liabilities of ACMC with respect to Asbestos Claims. See Plan at § 4.4.
(d) The NGC Bodily Injury Trust is to be funded in part by the securities of ACMC and by the obligation of ACMC to make future payments, including dividends (if any). The Plan provides that ACMC will be solely owned by the NGC Bodily Injury Trust. As a result, every asset of ACMC that is not required to pay non-Asbestos Claims will be available in the future to the NGC Bodily Injury Trust to enable such Trust to make payments on account of Asbestos Claims. The Plan provides that any such assets that become available after the Effective Date will be transferred to the NGC Bodily Injury Trust. See Plan at § 8.6.
(e) The NGC Bodily Injury Trust, on the Effective Date, will own 100% of the voting shares of Reorganized ACMC. See Plan at § 4.4.
(f) The NGC Bodily Injury Trust is to use its assets and income to pay Asbestos Claims. See Plan at § 4.4; Claims Resolution Procedures at § 1.1.
(g) ACMC is likely to be subject to substantial Demands for payment arising out of the same or similar conduct or events that gave rise to the Current Asbestos Claims, which are addressed by the Supplemental Injunction. See Affidavit of W.D. Hilton, Jr. In Support of Confirmation of The Third Amended Plan of Reorganization Under Chapter 11 of The Bankruptcy Code For Asbestos Claims Management Corporation (the "Hilton Confirmation Affidavit") a ¶ 164; Affidavit of Mark A. Peterson Concerning Projection of Future Asbestos Claims Against Asbestos Claims Management Corporation (the "Peterson Confirmation Affidavit") at ¶¶ 29-30.
(h) The actual amounts, numbers and timing of Demands cannot be determined. See Peterson Confirmation Affidavit at ¶ 30.
(i) Pursuit of Demands outside the Claims Resolution Procedures prescribed by the Plan is likely to threaten the Plan's purpose to deal equitably with Claims and Demands. The primary assets of the NGC Bodily Injury Trust will be assets contributed by the Protected Parties, and to permit holders of Asbestos Claims to pursue those Protected Parties will not only invalidate the settlement agreements with those Parties, leaving the NGC Bodily Injury Trust with no assets whatsoever to effectuate the Plan's purpose, but is also inequitable and inconsistent with the principles underlying the passage of section 524(g) of the Bankruptcy Code. See Hilton Confirmation Affidavit at ¶ 89.
(j) The terms of the Supplemental Injunction are set out in the Plan and in the Disclosure Statement and the Asbestos Claimant Disclosure Statement. See Plan at § 9.3; Disclosure Statement at § 4.7; Asbestos Claimant Disclosure Statement at § 3.2.
(k) Each of Class 4 and Class 5, which are the classes of claimants whose claims are to be addressed by the NGC Bodily Injury Trust, has voted in favor of the Plan by at least 75% of those voting. See Affidavit of Daniel McSwigan Certifying Tabulation of Ballots Accepting And Rejecting Third Amended Plan of Reorganization Under Chapter 11 of The Bankruptcy Code For Asbestos Claims Management Corporation (the "Trumbull Voting Affidavit") at ¶ 44.
(l) Pursuant to orders of the Bankruptcy Court, the District Court or otherwise, the NGC Bodily Injury Trust shall operate through mechanisms such as structured, periodic or supplemental payments, pro rata distributions, matrices or periodic review of estimates of the numbers and values of Asbestos Claims or other comparable mechanisms that provide reasonable assurance that the NGC Bodily Injury Trust shall value, and be in a financial position to pay, all Asbestos Claims in substantially the same manner regardless of the timing of the assertion of the Asbestos Claim. See Hilton Confirmation Affidavit at ¶ 90; Affidavit of Russell W. Budd In Support of The Third Amended Plan of Reorganization Under Chapter 11 of The Bankruptcy Code For Asbestos Claims Management Corporation (the "Budd Confirmation Affidavit") at ¶¶ 20-23; Affidavit of Sander L. Esserman In Support of The Third Amended Plan of Reorganization Under Chapter 11 of The Bankruptcy Code For Asbestos Claims Management Corporation (the "Esserman Confirmation Affidavit") at ¶ 63.
(m) The operation and payment mechanisms of the NGC Bodily Injury Trust have been carefully crafted to permit the NGC Bodily Injury Trust to fairly compensate holders of Asbestos Claims while at the same time safeguarding the NGC Bodily Injury Trust's long-term viability. These mechanisms have been developed in consultation with the Creditors' Committee, which has safeguarded the interests of Current Asbestos Claimants, and the Legal Representative, who has safeguarded the interests of Future Asbestos Claimants, and are substantially similar to the claims mechanisms previously approved by the Bankruptcy Court in the Alternate Facility Order. See Budd Confirmation Affidavit at ¶ 20; Esserman Confirmation Affidavit at ¶ 61.
(n) The Claims Resolution Procedures will fairly compensate holders of Asbestos Claims because the Allowed Liquidated Values provided in the Claims Resolution Procedures mirror the historical settlement averages paid by ACMC in the tort system. These historical settlement averages, and their use in the Alternate Claims Facility, were previously approved by the Bankruptcy Court in the Alternate Facility Order. See Budd Confirmation Affidavit at ¶ 21; Esserman Confirmation Affidavit at ¶ 62.
(o) The Claims Resolution Procedures provide for identical treatment of Current and Future Asbestos Claimants. This was a central point negotiated by the Creditors' Committee, the Legal Representative, the NGC Settlement Trust and ACMC, all of whom agreed that no variation in treatment would be tolerated. To ensure equivalent payments to Current and Future Asbestos Claimants, the Claims Resolution Procedures provide for the Trustees of the NGC Bodily Injury Trust to calculate the NGC Bodily Injury Trust Payment Percentage by taking into account not only Current Asbestos Claims that have been asserted against the NGC Bodily Injury Trust but Demands which will be asserted in the future against the NGC Bodily Injury Trust. In determining the NGC Bodily Injury Trust Payment Percentage, which is recalculated periodically to account for revised projections of likely claims and assets, the Trustees are directed to ensure that current payments on the Allowed Liquidated Value of a Current Asbestos Claim will be equivalent to anticipated future payments on the Allowed Liquidated Value of a similarly situated Demand. See Esserman Confirmation Affidavit at ¶ 63.
(p) The payment mechanisms embodied in the Claims Resolution Procedures incorporate negotiated compromises of any intra-class issues among holders of Asbestos Claims with different interests. One of these compromises involved the allocation of the NGC Bodily Injury Trust's assets between holders of impaired Asbestos Claims and unimpaired Asbestos Claims. The Creditors' Committee, which consists both of asbestos plaintiffs' lawyers representing impaired and unimpaired claimants, ACMC and the Legal Representative determined, after extensive negotiations, to resolve this dispute in the Allowed Liquidated Values that were assigned to Asbestos Claims in the various disease categories. This resolution was negotiated in connection with the Alternate Claims Facility, approved by this Court in the Alternate Facility Order and carried over to the Claims Resolution Procedures. Equivalent treatment to holders of impaired and unimpaired Current Asbestos Claims and Demands is ensured through the Claims Resolution Procedures' application of identical mechanisms for the allowance or disallowance of Current Asbestos Claims and Demands. See Budd Confirmation Affidavit at ¶¶ 21-22; Esserman Confirmation Affidavit at ¶¶ 64-65.
(q) The Legal Representative was appointed by the Bankruptcy Court as part of the proceedings leading to the issuance of the Supplemental Injunction for the purpose of, among other things, protecting the rights of all persons that might subsequently assert Demands that are addressed by the Supplemental Injunction and channeled to the NGC Bodily Injury Trust. See Esserman Confirmation Affidavit at ¶¶ 54-55.
(r) In light of the benefits provided, or to be provided, to the NGC Bodily Injury Trust on behalf of the Protected Parties, the Supplemental Injunction is fair, equitable and reasonable with respect to the persons that might subsequently assert Demands against the Protected Parties. See Hilton Confirmation Affidavit at ¶ 95. The Protected Parties covered by the Supplemental Injunction have been specifically identified in the Disclosure Statement and in the Supplemental Injunction. Applying the Supplemental Injunction to holders of Demands is fair, equitable and reasonable in light of the benefits provided, or to be provided, to the NGC Bodily injury Trust by the Protected Parties. These parties are providing in excess of $500 million of value to the NGC Bodily Injury Trust. This value would not be available but for the Supplemental Injunction because the Protected Parties would be unwilling to enter settlements of this magnitude without the assurance that these settlements have finally and forever extinguished any and all Asbestos Claims against them.
(s) In light of the benefits provided, or to be provided, to the NGC Bodily Injury Trust on behalf of the Protected Parties, identifying the Protected Parties (by name or as part of an identifiable group) in the Supplemental injunction is fair, equitable and reasonable with respect to the persons that might subsequently assert Demands. See subsection (r) immediately above.
(t) The Protected Parties are alleged to be directly or indirectly liable for the Asbestos Claims for one or more of the reasons set forth in section 524(g)(4)(A)(ii) and are entitled to the protection of the Supplemental Injunction. See Hilton Confirmation Affidavit at ¶ 97. The identity of the Protected Parties is readily identifiable (by name or as part of an identifiable group) from the terms of the Supplemental Injunction. Specifically, the Supplemental Injunction provides that it covers the following parties (the "Protected Party List"):
(i) ACMC and Reorganized ACMC, their past, present and future Subsidiaries or Affiliates (other than Austin), successors and assigns and any of their respective Representatives;
(ii) the NGC Settlement Trust, the NGC Bodily Injury Trust, the PD TAC, the BI TAC, the Creditors' Committee, the NGC Bodily Injury Trust Advisory Committee, the NGC Legal Representative and the Legal Representative, their successors and assigns and any of their respective Representatives;
(iii) any Settling Asbestos Insurance Company, its successors and assigns and any of its Representatives;
(iv) New NGC; any past, present or future Subsidiary (other than Austin) or Affiliate of New NGC; any Representative of New NGC or of any past, present or future Subsidiary (other than Austin) or Affiliate of New NGC; any past, present or future shareholder, insurer or lender of New NGC or any past, present or future Subsidiary (other than Austin) or Affiliate of New NGC, but solely in such Person's capacity as shareholder or insurer of, or lender to, New NGC or such Subsidiary or Affiliate; any former officer or director of Old NGC; and any successor or assign to any of the foregoing Entities; and
(v) if and only if the Prostok Bondholder Settlement is approved and the Prostok Bondholder QSF Contribution is paid, the Senior Bondholder Defendants, and any partner or insurer of the Senior Bondholder Defendants, but solely in such Person's capacity as insurer or partner of the Senior Bondholder Defendants; together with their successors and assigns.
(u) The Plan otherwise complies with section 524(g) of the Bankruptcy Code;
(v) The Supplemental Injunction is an integral part of the Plan and may not be vacated, amended or modified after Confirmation; and
(w) An Article m district court judge in the District Court shall hear any proceeding that involves the Supplemental Injunction, including without limitation, the enforcement, validity, application or construction of such injunction, or of section 524(g) of the Bankruptcy Code with respect to such injunction, and any such proceeding may be commenced only in the District Court which shall have exclusive jurisdiction over any such proceeding without regard to amount in controversy.
67. The Discharge and Discharge Injunction. Under the circumstances, the Plan's discharge provisions, including the Discharge Injunction, are proper. The Plan does not effectuate a liquidation of ACMC. ACMC will have continuing business after the consummation of the Plan, particularly in connection with maximizing the value of insolvent and unsettled insurance coverage for the benefit of Asbestos Claimants and with its role in resolving the Asbestos Claims, sufficient to support the discharge and the Discharge Injunction. ACMC contemplates that it will remain in business for decades. The Protected Parties are paying substantial monies to the NGC Bodily Injury Trust in full and complete settlement of any Claims or Demands against those entities by holders of Asbestos Claims.
68. The Injunctions Advance Consummation of the Plan and Materially Benefit the Estate. The Discharge Injunction and the Supplemental Injunction advance the consummation of the Plan and materially benefit ACMC's Estate by encouraging such Protected Parties to contribute funds to ACMC's Estate through the various settlements contemplated by the Plan. The Asbestos Insurance Company Injunction advances consummation of the Plan and materially benefits the Debtor's Estate by preserving an asset of the Estate through its prohibition against the filing by individual Asbestos Claimants of Direct Actions against the Asbestos Insurance Companies which actions could have the effect of diverting a portion of the available insurance to a particular claimant as opposed to all Asbestos Claimants. Thus, each of the Injunctions is appropriate under section 105(a) of the Bankruptcy Code.
69. No Intent to Avoid Taxes/Securities Laws. The primary purpose of the Plan is not avoidance of taxes or the avoidance of the requirements of section 5 of the Securities Act of 1933, as amended (the "Securities Act"). There has been no request by any Governmental Unit to make a finding that the principal purpose of the Plan is the avoidance of taxes or the avoidance of the application of the Securities Act in contravention of section 1129(d) of the Bankruptcy Code.
70. New NGC Settlement.
(a) The Plan implements the New NGC Settlement. The New NGC Settlement represents a global settlement of all of ACMC's and the NGC Settlement Trust's issues with New NGC (other than as provided in the New NGC Plan Documents) including without limitation: (i) New NGC's alleged liability to Future Asbestos Claimants; (ii) issues related to the Channeling Order in the NGC Reorganization Cases; (iii) issues related to the Stipulation Resolving Subsequent Asset Valuation; (iv) issues related to the Prostok Action; and (v) New NGC's alleged indemnification obligations under the Asset Purchase Agreement for interest paid to certain signatory insurers under section XX of the Wellington Agreement. ACMC's counsel conducted extensive legal research on, among other things, the viability of successor liability theories against New NGC by Asbestos Claimants under the laws of the states where the most significant number of asbestos bodily injury lawsuits were filed, and concluded that such claimants would have great difficulty successfully asserting such claims. The results of this research were discussed in the Disclosure Statement at pages 102 through 105. ACMC shared this research with the NGC Legal Representative and the members of the BI TAC who, with the aid of their separate counsel, conducted their own due diligence analysis and reached their own conclusions about the likelihood that a particular Future Asbestos Claimant could successfully pursue a successor liability claim against New NGC. All parties to the New NGC Settlement that reviewed this issue concluded that any successor liability litigation would be extremely time consuming and expensive for the litigants, and there is substantial uncertainty associated with the outcome of any such litigation. New NGC threatened to pursue appeals with respect to any rulings favorable to Future Asbestos Claimants to the highest courts in the applicable jurisdictions. Furthermore, New NGC's counsel has stated that if significant Future Asbestos Claims were asserted against it, New NGC might file its own chapter 11 case in North Carolina, use North Carolina choice of law rules to obtain the benefit of a favorable jurisdiction's successor liability statute and potentially pay any Future Asbestos Claims that are ultimately allowed only a fraction on the dollar. In addition, the parties considered the recovery that would be readily available, in a comparative sense, to Asbestos Claimants under a settlement with New NGC. Under such a settlement, Asbestos Claimants would be relieved of the obligation to demonstrate that New NGC has liability to the claimants, yet at the same time would receive a distribution effectively from New NGC as a result of any contribution New NGC would make. Accordingly, ACMC, the NGC Settlement Trust, the Creditors' Committee, the Legal Representative and New NGC entered into negotiations and reached the New NGC Settlement. With the advice of its counsel, ACMC has evaluated and negotiated the New NGC Settlement. ACMC, the Creditors' Committee and the Legal Representative have concluded that the consummation of the transactions contemplated by the New NGC Settlement is in the best interests of the holders of Asbestos Claims, Claims, Demands and Interests in ACMC.
(b) The principal terms of the New NGC Settlement are as follows: (1) New NGC will pay the NGC Bodily Injury Trust the sum of $347 million ($47 million of this amount will be paid through the issuance of a one-year note by New NGC secured by a Standby Letter of Credit from a financial institution acceptable to the NGC Settlement Trust); (2) New NGC and various other parties will receive the benefits of the Supplemental Injunction and the Asbestos Claims Indemnification Agreement; (3) the NGC Settlement Trust, ACMC, the NGC Bodily Injury Trust, the School Districts and various other parties will receive the benefits of the Fee Shifting Indemnification Agreement; (4) the Consolidated Appeals will be dismissed; (5) the NGC Settlement Trust will dismiss the Individual Prostok Defendants from the Prostok Action, and New NGC will waive and release any issues it has raised regarding its ownership of the causes of action being asserted by the NGC Settlement Trust in the Prostok Action; and (6) the parties to the New NGC Settlement will execute mutual releases, subject to certain limited exceptions. ACMC, the NGC Settlement Trust and the NGC Bodily Injury Trust shall acknowledge that New NGC shall be entitled to receive all tax benefits resulting from the deductibility of the New NGC QSF Settlement Contribution.
(c) The Bankruptcy Court determines that the New NGC Settlement is fair, equitable and reasonable to ACMC and its Claimants, Future Asbestos Claimants and Interest Holders. In approving the New NGC Settlement, the Bankruptcy Court has considered the following:
(i) To ultimately prevail in litigation regarding liability for Future Asbestos Claims, a Future Asbestos Claimant would have to show that New NGC has liability for Old NGC's asbestos-related torts under applicable successor liability laws in a respective state. The case law regarding successor liability is not uniform among the states. However, as a general rule, the various states impose a heavy burden on a plaintiff seeking to hold an Entity liable on a successor liability theory. From the research it conducted, ACMC concludes that a successor liability claim against New NGC would be very fact intensive and difficult at best to prove. The Legal Representative and the Creditors' Committee, both of which have carefully reviewed the case law and commissioned similar surveys of their own from their respective counsel, share this perspective. This hurdle is compounded by New NGC's threat, if significant Future Asbestos Claims were asserted against it, to file its own chapter 11 case in North Carolina and to pay such claims, if any are allowed, only a fraction on the dollar. In such case, the Debtor believes that New NGC would have argued that, under the conflict rules of North Carolina, the federal bankruptcy court considering any successor liability claims against New NGC should apply the law of Texas because that is where the asset sale took place and that is the choice of law rule specified in the Assets Purchase Agreement. The Bankruptcy Court finds, without deciding the issue, that there is case law support for this argument and, even given the unusual history of the creation of New NGC, the parties agree that the successor liability law of Texas imposes significant hurdles to recovery against New NGC. In any event, a Future Asbestos Claimant's chance of success in litigation is sufficiently uncertain to make settlement by ACMC on a global basis an advisable option. In addition, the New NGC Settlement resolves other litigation regarding issues related to the Channeling Order, the Alternate Claims Facility, the Subsequent Asset Valuation determination of the NGC Settlement Trust, New NGC's indemnification obligations for Wellington Agreement section XX interest and the Prostok Action. These issues are part and parcel of the global resolution of issues involving New NGC. Agreeing to resolve all issues with New NGC was reasonable in order to reach the overall agreement to obtain the New NGC QSF Settlement Contribution.
See Woody v. Combustion Engineering, Inc., 463 F. Supp. 817 (E.D.Tenn. 1978) (holding that under Tennessee choice of law rules, law of state in which bankruptcy sale of assets occurred must govern); Bonee v. L M Construction Chemicals, 518 F. Supp. 375 (M.D.Tenn. 1981) (applying successor law of state in which the sale of corporate assets took place); In re Asbestos Litigation, 517 A.2d 697 (Del.Super.Ct. 1986) ("[T]he focus of the successor liability issue is more properly on the legal effect of the . . . contractual transaction between [the selling and purchasing corporations]."); Wessinger v. Vetter Corp., 685 F. Supp. 769 (D.Kan. 1987) (applying successor law of state in which the sale of corporate assets took place) (citing Brown v. Kleen Kut Mfg. Co., 714 P.2d 942 (Kan. 1986)); see also Standal v. Armstrong Cork Co., 356 N.W.2d 380 (Minn.Ct.App. 1984) (applying law of state in which sale of assets occurred, although not specifically applying Minnesota contract choice of law rules); cf. Shane v. Hobam, Inc., 332 F. Supp. 526 (E.D.Pa. 1971) (holding that issue of successor liability determined under laws chosen in agreement for sale of corporate assets between predecessor and successor corporations); Litarowich v. Wiederkehr, 405 A.2d 874 (N.J.Super.Ct. 1979) (interpreting Shane as being premised upon the tacit assumption that the issue of successor liability is one of contract for choice of law purposes). Similarly, numerous states resolve the choice of laws question by characterizing the issue of successor liability as one of contract law, which leads to the same result. Wells v. Raymark Industries, No. 84-11-Civ-J-14, 1985 WL 6638 (M.D.Fla. 1985); In re Nicolet, Inc., Mass. Asbestos Litigation, M.M.L. NO. 1 2 (D.Mass. April 15, 1985); Carpenter v. Combustion Engineering, Inc., C.A., No. C78-224 (N.D.Ohio 1979); Scott v. Johns-Manville Corp., No. SA-82 CA 83 (W.D.Tex. 1982); Osteen v. Combustion Engineering, Inc., No. CV 79-0-47 (D.Neb. 1981); Chapin v. AC S, No. S-79-0272(N) (S.D.Miss. 1981); Hendrix v. Celotex Corp., No. CV 479-327 (S.D.Ga. 1981); Damewood v. Combustion Engineering, Inc., No. 1-78-170 (E.D.Tenn. 1979); Di Gravina v. Johns-Manville Sales Corp., No. L-6001-79 (N.J.Super.Ct. 1981) and In re Kitsap County Asbestos Cases, No. 81 2 00940 1 (Wash. Super. Ct. 1982).
(ii) It would be extremely time-consuming and expensive for Future Asbestos Claimants to recover damages from New NGC in litigation premised on successor liability. Due to slow manifestation of asbestos-related injuries, decades of litigation would be necessary to adjudicate all potential liability issues for all of the potential claimants in all potential jurisdictions. In addition, for Future Asbestos Claimants to even assert such claims against New NGC, the Channeling Order in the 1993 Confirmation Order must lift. Issues related to the Channeling Order and the structure of the Alternate Claims Facility that would impact how long the Channeling Order would stay in place are currently being appealed by New NGC and the NGC Legal Representative in the Consolidated Appeals in the District Court. Regardless of who prevails there, the losing party would certainly appeal to the Fifth Circuit. The New NGC Settlement avoids the time and expense of this lengthy, complicated and uncertain litigation.
(iii) The interests of the Asbestos Claimants and creditors support the approval of the New NGC Settlement. The New NGC Settlement presents an opportunity to greatly enhance the distributions which the NGC Bodily Injury Trust can make to Asbestos Claimants. ACMC's creditors' overwhelming support of the Plan as evidenced by their vote, coupled with the support of the Creditors' Committee and the Legal Representative and the absence of any objections even remotely suggesting that the New NGC Settlement should not be approved, demonstrate the wisdom of the New NGC Settlement and demonstrate that it is in the best interests of ACMC and its Estate.
(iv) The New NGC Settlement was negotiated by ACMC, the NGC Settlement Trust, the BI TAC, and the NGC Legal Representative. All parties to the New NGC Settlement have equivalent bargaining positions and sophisticated legal representation, and the New NGC Settlement was neither coerced nor secret. The New NGC Settlement was negotiated at arm's-length.
71. Treatment of BI Settlement Agreements.
(a) Prior to ACMC's withdrawal from the CCR on June 16, 2000, the CCR, as agent for ACMC and its other members, entered into BI Settlement Agreements with certain Asbestos Claimants. The BI Settlement Agreements arose both in the context of inventory settlements (i.e. group settlements by a particular law firm of some or all of the cases filed by the firm in a particular jurisdiction) and trial-listed settlements (i.e., settlements with individual plaintiffs entered into, for the most part, on the eve of trial). The CCR entered into the BI Settlement Agreements on behalf of ACMC, but also on behalf of other defendants for which the CCR served as agent under the terms of the CCR Producer Agreement. Pursuant to the CCR Producer Agreement (as modified by the CCR Reimbursement Agreement), ACMC was allocated a defined share of the amount due under each BI Settlement Agreement. (b) Several of the defendants that were parties to the BI Settlement Agreements, through the CCR as their agent, have filed voluntary petitions under the Bankruptcy Code. As a result, these defendants generally ceased paying their allocated liability share under certain BI Settlement Agreements. Certain Asbestos Claimants have sought to collect the unpaid shares from other CCR members, including ACMC, arguing that such liabilities are joint and several.
(c) As far as ACMC can determine from the BI Settlement Agreements in its possession, none of the written BI Settlement Agreements provide that liability is joint and several among the CCR members. Indeed, some of the BI Settlement Agreements in ACMC's possession provide that liability of the CCR members is several and not joint. However, some of the BI Settlement Agreements are silent on this issue, and some Asbestos Claimants have successfully argued that the liability under such BI Settlement Agreements is joint and several.
(d) The Plan embodies a settlement of potential joint and several claims against ACMC that could be based on BI Settlement Agreements. The settlement is reflected in the treatment of Class 5 BI Settlement Claims as a separate Class from Class 4 Asbestos Claims. In recognition of the potential joint and several contractual claim that could be asserted against ACMC by a BI Settlement Claimant, in addition to any Asbestos Claim held by such BI Settlement Claimant, the Claims Resolution Procedures have special provisions for BI Settlement Claims, including an increase in the consideration paid with respect to such claims.
(e) The Bankruptcy Court determines that the settlement is fair, equitable and reasonable. In approving the settlement, the Bankruptcy Court has considered the following:
(i) There is a reasonable risk that ACMC will be held liable, under theories of joint and several liability, for the amount owed by other defendants under BI Settlement Agreements. While the CCR has been able to defeat many actions seeking to hold its members jointly and severally liable, it has not been totally successful in this effort.
(ii) Given the concentrated representation of the majority of asbestos claimants by a relatively small number of plaintiffs' firms, it is likely that ACMC would face litigation from a significant portion of the BI Settlement Claimants related to ACMC's potential joint and several liability under BI Settlement Agreements. Even if ACMC successfully demonstrated that it had no joint and several liability under BI Settlement Agreements, this litigation would be extremely time-consuming and expensive. Moreover, there is substantial uncertainty associated with the outcome of such litigation. The modest increased consideration provided to the BI Settlement Claimants in the Plan is an inexpensive way for ACMC and the NGC Bodily Injury Trust to avoid costly, time-consuming and uncertain litigation to resolve the question of joint and several liability under BI Settlement Agreements. In the absence of the special provision for BI Settlement Claims, the NGC Bodily Injury Payment Percentage would increase by only three/tenths of one percent (.3%).
(iii) The interests of the Asbestos Claimants and creditors support the approval of the settlement related to BI Settlement Agreements. This settlement was negotiated by ACMC, the BI TAC and the NGC Legal Representative in conjunction with key asbestos plaintiffs' firms around the country. The BI TAC and the NGC Legal Representative collectively represent the interests of all known and unknown holders of Asbestos Claims. ACMC's creditors' overwhelming support of the Plan, coupled with the support of the Creditors' Committee and the Legal Representative and the absence of any objection even remotely suggesting that the settlement related to BI Settlement Agreements should not be approved, demonstrates the wisdom of the settlement and demonstrates that it is in the best interests of ACMC and its Estate; and
(iv) All parties to the settlement related to the BI Settlement Agreements have equivalent bargaining positions and sophisticated legal representation, and the settlement related to the BI Settlement Agreements was neither coerced nor secret. The settlement related to the BI Settlement Agreements was negotiated at arms'-length.
72. Abestos Insurance Company Settlements.
(a) The Plan provides a mechanism for remaining Asbestos Insurance Companies that provide coverage to ACMC for Asbestos Claims to reach settlements with ACMC of all issues under the Asbestos Insurance Policies issued by such Asbestos Insurance Companies and obtain the benefit of the Supplemental Injunction. Under the Plan, an Asbestos Insurance Company that reaches such a settlement is referred to as a Settling Asbestos Insurance Company. ACMC has reached such settlements with the following Asbestos Insurance Companies: Affiliated FM Insurance Company, Stonewall Insurance Company, Old Republic Insurance Company, Houston General Insurance Company, and The Constitution State Insurance Company. ACMC designated each of the above Asbestos Insurance Companies as Settling Asbestos Insurance Companies and disclosed the terms of the Asbestos Insurance Settlement Agreements with such Settling Asbestos Insurance Companies within the time frames set forth in section 8.19 of the Plan.
(b) Each Asbestos Insurance Company Settlement implements a cash policy buyout with the Settling Asbestos Insurance Company involved. In each case, the amount to be paid by the Asbestos Insurance Company represents a significant portion of the present value of each insurer's policy limit under the applicable asbestos insurance policy.
(c) ACMC has also reached a settlement with American Motorists Insurance Company ("AMICO"). The settlement agreement with AMICO is not an Asbestos Insurance Company Settlement and, therefore, AMICO will not become a Settling Asbestos Insurance Company. However, the Asbestos Insurance Company Injunction will apply to AMICO. The agreement with AMICO, which was filed with the Court and admitted into evidence at the Confirmation Hearing, resolves certain disputes with respect to insurance policies issued by AMICO to ACMC, but preserves the issue concerning whether underlying insurance applicable to one of the AMICO insurance policies (covering 1984) has been exhausted. AMICO has agreed to make payments to ACMC, and ACMC has agreed that so long as AMICO is abiding by the payment provisions of the agreement, or once AMICO's payment obligations under the settlement agreement have terminated, ACMC will not seek to lift the Asbestos Insurance Company Injunction as to AMICO, to prosecute any Asbestos Insurance Action or other claim against AMICO under the 1983 and 1984 policies, or to assign any claim against AMICO or assign or assert a Direct Action against AMICO to a third party claimant. Notwithstanding the Asbestos Insurance Company Injunction, either ACMC or AMICO shall be entitled to submit any dispute regarding exhaustion of the 1984 underlying limits to the court in the Stonewall Litigation for resolution, which shall be the exclusive forum for resolution of such disputes. ACMC acknowledges that it intends to abide by any rulings issued in the Stonewall Litigation. In addition, ACMC has agreed to make certain modifications to the Plan to resolve the AMICO objections thereto, none of which impact the treatment of claims thereunder.
(d) The Bankruptcy Court determines that the Asbestos Insurance Settlement Agreements, and the agreement with AMICO, are fair, equitable and reasonable to ACMC and its Claimants, Future Asbestos Claimants and Interest Holders. In approving such settlements, the Bankruptcy Court has considered the following:
(i) For over a decade ACMC has been litigating with its insurers in the Stonewall Litigation. This litigation raises complex and factual issues that have resulted in numerous appeals to the United States Court of Appeals for the Second Circuit. The outcome of this litigation is uncertain and, even if ACMC were successful, (a) payments under the policies at issue could be delayed for years because the insurers might argue that (i) the insurance attachment points had not been reached or (ii) certain claims were improperly allowed, and (b) some insurers may not be financially capable of paying ACMC's insurance claim in full. The Asbestos Insurance Company Settlements provide ACMC an opportunity to conclude all of its remaining insurance litigation, except with respect to certain issues reserved with AMICO. The lump sum policy buy-out payment of each Settling Asbestos Insurance Company represents a significant portion of the present value of that insurer's full policy limits and is consideration which ACMC will be paid immediately without the expense attendant to continued litigation. The agreement with AMICO establishes a payment protocol under the AMICO policies, and resolves all issues between AMICO and ACMC other than certain reserved issues.
(ii) Insurance Companies and AMICO would be, as it has been for over a decade, extremely time-consuming and expensive. The Asbestos Insurance Companies contend that there are many open issues still to be resolved in the Stonewall Litigation.
(iii) The interests of the Asbestos Claimants and creditors support the approval of the Asbestos Insurance Company Settlements and the agreement with AMICO. These settlements enhance the distributions which the NGC Bodily Injury Trust will be able to make to Asbestos Claimants. The Asbestos Insurance Company Settlements and the agreement with AMICO were negotiated by ACMC. They are supported by the Creditors' Committee and the Legal Representative who collectively represent the interests of all known and unknown holders of Asbestos Claims. ACMC's creditors' overwhelming support of the Plan as evidence by their vote, coupled with the support of the Creditors' Committee and the Legal Representative and the absence of any objections even remotely suggesting that the Asbestos Insurance Company Settlements or the agreement with AMICO should not be approved, demonstrate the wisdom of the settlements and demonstrate that they are in the best interests of ACMC and its Estate.
(iv) All parties to the Asbestos Insurance Company Settlements and the agreement with AMICO have equivalent bargaining positions and sophisticated legal representation, and such settlements were neither coerced nor secret. The Asbestos Insurance Company Settlements and the agreement with AMICO were negotiated at arm's-length.
73. Settlement of Claims Against NGC Settlement Trust for Transfer of ACMC Funds.
(a) Since confirmation of the 1993 Reorganization Plan, ACMC's and the NGC Settlement Trust's normal practice has been for all of ACMC's Cash to be distributed to the NGC Settlement Trust for investment and to fund payments to the CCR or to holders of allowed property damage claims. All of this Cash has been derived from settlements with, or other payments from, Asbestos Insurance Companies. The Cash has been used to resolve the claims of Asbestos Claimants and to pay the expenses associated with the operation of the NGC Settlement Trust and ACMC. As a result of these transfers, ACMC's sole assets, as of the Petition Date, were its remaining Asbestos Insurance Policies and its claims under the CCR Reimbursement Agreement. ACMC believes that the 1993 Reorganization Plan fully contemplated that the NGC Settlement Trust, using Cash provided by ACMC, would operate in this manner.
(b) ACMC is aware that general unsecured creditors of ACMC, if any exist, might argue that some portion of the funds transferred from ACMC to the NGC Settlement Trust should be recovered by ACMC's Estate and used to pay such general unsecured creditors. ACMC and the NGC Settlement Trust disagree with this argument. Both ACMC and the NGC Settlement Trust contend that the Cash transferred to the NGC Settlement Trust would not have been available to ACMC's general unsecured creditors in any event because it is all derived from Asbestos Insurance Policies which could only be accessed to pay Asbestos Claims or associated expenses. Moreover, given that the 1993 Reorganization Plan established the NGC Settlement Trust to own ACMC and its assets to resolve the claims of all current and future asbestos claimants that were made the beneficiaries of the NGC Settlement Trust, there is a reasonable argument that all of ACMC's assets are actually held in trust for the NGC Settlement Trust and its beneficiaries. Thus, litigation against the NGC Settlement Trust could actually result in ACMC's Estate being further reduced instead of enhanced.
(c) To avoid any possible arguments by ACMC's non-asbestos Claimants, the Plan proposes for the NGC Settlement Trust to fund ACMC's Administrative and Priority Claims and to give Class 3 Creditors a pro rata share of the NGC Settlement Trust Distribution Assets in the form of the NGC Settlement Trust Class 3 Contribution. In exchange, the NGC Settlement Trust will receive the protection of the Supplemental Injunction. The Bankruptcy Court determines that the settlement is fair, equitable and reasonable. In approving the settlement, the Bankruptcy Court has considered the following:
(i) The 1993 Reorganization Plan provides that the assets of ACMC shall be distributed to the NGC Settlement Trust for distribution equally and ratably to holders of asbestos claims. Even so, the NGC Settlement Trust is willing to make the NGC Settlement Trust Class 3 Contribution and to pay ACMC's Administrative, Priority and Priority Tax Claims to facilitate the contributions that will be made by other third parties for the benefit of Asbestos Claimants who are the NGC Settlement Trust?s beneficiaries. The NGC Settlement Trust is also willing to distribute its remaining assets to the NGC Bodily Injury Trust which will greatly enhance the distributions which the NGC Bodily Injury Trust will be able to make to Asbestos Claimants.
(ii) Regardless of the outcome, litigation against the NGC Settlement Trust would be extremely time-consuming and expensive. Moreover, there is substantial uncertainty associated with the outcome of such litigation. In contrast, the settlement provides significant, immediate benefits.
(iii) The interests of the Asbestos Claimants and creditors support the approval of the settlement. The settlement with the NGC Settlement Trust was negotiated by ACMC, the BI TAC and the NGC Legal Representative. The BI TAC and the NGC Legal Representative collectively represent the interests of all known and unknown holders of Asbestos Claims. ACMC's creditors' overwhelming support of the Plan as evidence by their vote, coupled with the support of the Creditors' Committee and the Legal Representative and the absence of any objections even remotely suggesting that the settlement with the NGC Settlement Trust should not be approved, demonstrate the wisdom of the settlement and demonstrates that it is in the best interests of ACMC and its Estate; and
(iv) All parties to the settlement with the NGC Settlement Trust have equivalent bargaining positions and sophisticated legal representation, and the settlement with the NGC Settlement Trust was neither coerced or secret. The settlement with the NGC Settlement Trust was negotiated by ACMC and the NGC Settlement Trust at aim's-length with the members of the BI TAC and the NGC Legal Representative.
74. Prostok Bondholder Settlement.
(a) The Prostok Bondholder Settlement, if implemented, will finally resolve all remaining issues involving ACMC, the NGC Settlement Trust and the School District Trust related to the Prostok Action. Pursuant to the Prostok Bondholder Settlement, all claims asserted against the Senior Bondholder Defendants in the Prostok Action are resolved through the payment by the Senior Bondholder Defendants of $12.5 million in settlement consideration. From this amount, approximately $2.2 million will be transferred to the NGC Bodily Injury Trust for payment of counsel fees. The remaining settlement sum will be allocated 75% to the NGC Bodily Injury Trust for the benefit of Asbestos Claimants under the Plan and 25% to the NGC Settlement Trust for the benefit of holders of Asbestos Property Damage Claims. This formula is expected to result in the allocation of approximately $7.725 million of this remaining settlement sum to the NGC Bodily Injury Trust, which will be responsible for the payment of Asbestos Claimants and approximately $2.575 million of the remaining sum to the NGC Settlement Trust for distribution to holders of Asbestos Property Damage Claims. In consideration of this payment, the Senior Bondholder Defendants will receive the releases specified in the Prostok Bondholder Settlement, the limited indemnification protection from the NGC Bodily Injury Trust specified in that settlement and the benefit of the Supplemental Injunction under the Plan. At the Confirmation Hearing, the Trust Parties (as defined in the Prostok Bondholder Settlement) and the Senior Bondholder Defendants presented a stipulation (the "Stipulation") agreeing to waive the parties' mutual obligation under clause (ii) of paragraph 3(a) of the Prostok Bondholder Settlement to use reasonable efforts to obtain an injunction in the NGC Reorganization Cases enjoining the assertion of claims against the Senior Bondholder Defendants by Asbestos Property Damage Claimants. This modification does not materially or adversely change the Prostok Bondholder Settlement or its reasonableness as to ACMC or the NGC Settlement Trust;
(b) Because the Prostok Bondholder Settlement will moot out any indemnification issues with respect to the School District Trust, the Prostok Bondholder Settlement will also result in the dissolution of the School District Trust and ultimately the release of the proceeds of that Trust ($2,000,000) to the NGC Bodily Injury Trust for the payment of Asbestos Claims. The Prostok Bondholder Settlement will only be implemented if all of the conditions precedent to it are satisfied.
(c) The Prostok Bondholder Settlement avoids the inherent risks and uncertainties involved in continued prosecution of the claims in the Prostok Action and disagreements between bodily injury claimants and holders of the Asbestos Property Damage Claims as to the allocation of any proceeds thereof. It also avoids what would be, even in the best case scenario, complex, expensive, disruptive and lengthy litigation over these matters. Finally, it results in the addition of substantial sums for the payment of Asbestos Claimants.
(d) The Prostok Bondholder Settlement was negotiated by the NGC Settlement Trust, the BI TAC, the PD TAC and the NGC Legal Representative. All parties to the Prostok Bondholder Settlement had equivalent bargaining positions and sophisticated legal representation, and the Prostok Bondholder Settlement was neither coerced nor secret. The Prostok Bondholder Settlement was negotiated at arm's-length.
(e) The Prostok Bondholder Settlement is fair, equitable and reasonable and is in the best interests of the Debtor and the beneficiaries of the NGC Settlement Trust and the Asbestos Claimants of ACMC.
(f) Approval of the Prostok Bondholder Settlement and implementation of the Supplemental Injunction to cover the Senior Bondholder Defendants, and the other parties described in the Prostok Bondholder Settlement, will increase the distribution available to the Asbestos Property Damage Claimants through the NGC Settlement Trust and to the Asbestos Claimants through the NGC Bodily Injury Trust.
(g) The Supplemental Injunction required by the Prostok Bondholder Settlement is integral to the Prostok Bondholder Settlement because parties, having reached the settlement, are entitled to the finality that would be accorded by the injunctions.
(h) The amount of the Prostok Bondholder QSF Contribution is estimated to be approximately $9.925 million. See ACMC Exhibit 64.
75. Settlement of Claims Related to CCR Reimbursement Agreement. The Bankruptcy Court has approved ACMC's settlement of claims with current and former members of the CCR with respect to the CCR Reimbursement Agreement by separate order. The Bankruptcy Court finds that the CCR Reimbursement Agreement Settlement, and the related settlements with the CCR members (or their affiliates) that have filed their own chapter 11 cases, is in the best interests of the Estate. The settlements resolve complex and lingering litigation, and will greatly benefit the progress of the Reorganization Case and the implementation of the Plan. The Bankruptcy Court's separate order, and the findings of fact and conclusions of law related thereto, are incorporated herein.
76. Aggregate Asbestos Claims. The projection of the Aggregate Asbestos Claims is based on projections of the number of Asbestos Claims, either now pending or to be asserted against the NGC Bodily Injury Trust in the future, that will be Allowed multiplied by the baseline Allowed Liquidated Values to be used under the Claims Resolution Procedures for each type of claim asserted and adjusted for inflation. The Bankruptcy Court has relied on the testimony of ACMC's claims' expert, Dr. Mark Peterson, for projections of the number of Future Asbestos Claims. Based on evidence that there were approximately 79,184 Asbestos Claims, with an aggregate projected Allowed value of $220,558,233, pending against ACMC as of June 30, 2000, and that approximately 440,598 additional Asbestos Claims will be filed against ACMC in the future, with an aggregate projected Allowed value of $1,826,736,460, the Bankruptcy Court estimates that the total number of Class 4 Claims and Demands that will be Allowed pursuant to the Claims Resolution Procedures is approximately 520,000 and the total Allowed dollar amount of such Class 4 Claims and Demands will be approximately $2.047 billion. In addition, based on the estimates available, the Bankruptcy Court estimates that the total number of Class 5 BI Settlement Claims that will be Allowed pursuant to the Claims Resolution Procedures is approximately 68,000 and the total Allowed dollar amount of such Class 5 BI Settlement Claims will be approximately $136,813,686. Consequently, the Bankruptcy Court estimates that the total dollar amount of Aggregate Asbestos Claims will be approximately $2.184 billion. See ACMC Exhibit 67.
77. Estimate of Allowed Administrative Claims. Based on estimates provided by the Debtor at the Confirmation Hearing, the amount of Allowed Administrative Claims is estimated to be $1,500,000. See Hilton Confirmation Affidavit at ¶ 172.
78. Absence of Allowed Priority and Non-Priority Tax Claims. No taxing authority asserted a Claim against the Debtor prior to the February 17, 2003 bar date established therefor. The amount of Allowed Priority Tax Claims is estimated to be $0.
79. Estimate of Allowed Priority Claims. All Priority Claims filed against the Debtor prior to the Claims Bar Date have been disallowed or withdrawn with prejudice. ACMC does not have employee contracts, the rejection of which would give rise to Allowed Priority Claims. The amount of Allowed Priority Claims is estimated to be $0.
80. Estimate of United States Trustee's Fees. Based on estimates provided by the Debtor at the Confirmation Hearing, the amount of applicable United States Trustee's Fees is estimated to be less than $5,000. See Hilton Confirmation Affidavit at ¶ 175. The Plan makes adequate provisions for the payment of these Fees and any similar fees likely to arise in the future through the agreement of the NGC Bodily Injury Trust to pay Reorganized ACMC Expenses.
81. Administrative and Priority Claims Reserve. Based on the estimates above in paragraphs 77 through 80, the amount required to fund the Administrative and Priority Claims Reserve is $1,500,000. See ACMC Exhibit 57.
82. Additional PD Payment. The Additional PD Payment is estimated to be $4,400,000. See Hilton Confirmation Affidavit at ¶ 170.
83. The NGC Settlement Trust Wind-Down Expenses. Based on estimates provided by the Debtor at the Confirmation Hearing, the NGC Settlement Trust Wind-Down Expenses are estimated to be $1,125,249. See Hilton Confirmation Affidavit at ¶ 177; ACMC Exhibit 60.
84. NGC Settlement Trust Distribution Assets. Based on the calculations above, the value of the NGC Settlement Trust Distribution Assets is $140,481,855. This number will increase by approximately $2 million upon dissolution of the School District Trust and return of any funds held therein to the NGC Settlement Trust. See ACMC Exhibit 63.
85. No Allowed Unsecured Claims. As a result of orders entered by the Bankruptcy Court after the February 7, 2003 hearing with respect to ACMC's objection to proofs of claim, many of the Unsecured Claims that were filed prior to the Claims Bar Date were disallowed or withdrawn with prejudice. The Bankruptcy Court anticipates that the remainder of the Unsecured Claims in Class 3 will be withdrawn with prejudice if the CCR Reimbursement Agreement Settlement, which has been approved by the Bankruptcy Court by separate order, and the Plan are implemented. Based on the evidence presented at the Confirmation Hearing, the Bankruptcy Court finds that the CCR Reimbursement Agreement Settlement is likely to be implemented and the remaining Unsecured Claims in Class 3 will be withdrawn. Based on the evidence presented at the Confirmation Hearing, the Bankruptcy Court estimates that no Unsecured Claims filed as a result of the rejection of executory contracts will be Allowed in the future.
86. NGC Settlement Trust Class 3 Contribution. The NGC Settlement Trust Class 3 Contribution is $0. See ACMC Exhibit 61. Because of the absence of any anticipated Allowed Unsecured Claims arising as a result of the rejection of executory contracts under the Plan and because, if any such Claims are Allowed, the NGC Settlement Trust will retain sufficient assets (approximately $24 million) for a period of time after the Effective Date to enable the NGC Settlement Trust Class 3 Contribution to be re-determined and funded, there is no need to establish an escrow or reserve for potential executory contract rejection Claims.
87. NGC Settlement Trust QSF Asbestos Claim Contribution. The NGC Settlement Trust QSF Asbestos Claim Contribution consists of both Cash and non-Cash assets. The Cash portion of the NGC Settlement Trust QSF Contribution is estimated to be approximately $114 million. Pursuant to section 8.4 of the Plan, the NGC Settlement Trust intends to transfer the majority of the value of the NGC Settlement Trust QSF Contribution, including approximately $90 million in Cash, to the NGC Bodily Injury Trust on the Effective Date. The NGC Settlement Trust intends to retain approximately $24 million (which may be higher or lower) in Cash, and other non-Cash components, of the NGC Settlement Trust QSF Asbestos Claim Contribution until no later than the Outside Date or the date that the NGC Settlement Trust finally winds-up its affairs, at which time the retained components of the NGC Settlement Trust QSF Asbestos Claim Contribution (less any amount required to pay the NGC Settlement Trust Class 3 Contribution in the event that determination is redetermined as a result of Allowed contract rejection claims) will be transferred to the NGC Bodily Injury Trust. The decision of the NGC Settlement Trust to retain a portion of the NGC Settlement Trust QSF Asbestos Claim Contribution is designed, in part, to maximize certain tax benefits attributable to losses of the NGC Settlement Trust. See Hilton Confirmation Affidavit at ¶ 184.
88. Initial NGC Bodily Injury Trust Payment Percentage. The evidence presented at the Confirmation Hearing reflects that the initial NGC Bodily Injury Payment Percentage, to be set by the Trustees of the NGC Bodily Injury Trust, will be approximately 29.5% for Class 4 Claims and 34.5% for Class 5 Claims. See ACMC Exhibit 59. The actual initial NGC Bodily Injury Payment Percentage will be determined by the Trustees of the NGC Bodily Injury Trust in accordance with the Trust Agreement and the Claims Resolution Procedures and may vary from the estimate presented at the Confirmation Hearing.
89. QSF Ruling. The Internal Revenue Service has issued a letter ruling that the NGC Bodily Injury Trust will be a Qualified Settlement Fund under section 468B of the Internal Revenue Code. The Bankruptcy Court will retain supervisory authority over the NGC Bodily Injury Trust.
90. Assumption/Rejection of Executory Contracts. Pursuant to section 1123(b)(2) of the Bankruptcy Code, the Plan constitutes a motion by ACMC to reject all prepetition executory contracts and unexpired leases except those listed on Exhibit C to the Plan. Based on the evidence adduced at the Confirmation Hearing, the prepetition executory contracts and unexpired leases to be rejected are burdensome to the Debtor's Estate and rejection of such contracts and leases is in the best interests of the Debtor's Estate. In addition, the Plan constitutes a motion by ACMC to assume the prepetition executory contracts and unexpired leases on Exhibit C to the Plan. The assumption of the prepetition executory contracts and unexpired leases listed on Exhibit C to the Plan, and the rejection of all other prepetition executory contracts and unexpired leases, is based on reasonable and sound business judgment of ACMC and is in the best interests of ACMC. No cure amount is owing by ACMC with respect to any assumed contract listed on Exhibit C, and the Debtor has adequately demonstrated adequate assurance of future performance under such contracts.
91. Exoneration. The provisions of the Plan, including but not limited to section 8.11, that exonerate the Protected Parties from liability as provided in the Plan are fair, equitable and reasonable, and induced the parties protected thereby to participate in the negotiation of the Plan and the Plan Documents and to otherwise participate in the Reorganization Case.
92. No Asbestos Claims Against Settling Asbestos Insurance Companies. The Supplemental Injunction prohibits the assertion of Asbestos Claims against any of the Protected Parties, including but not limited to the Settling Asbestos Insurance Companies. Allowing such Asbestos Claims to be asserted against any of the Protected Parties would undermine the benefits provided to the Protected Parties as a result of their settlements with the Debtor because such Protected Parties would not have obtained final resolution with respect to their potential exposure for Asbestos Claims.
93. Plan Documents. ACMC filed the Plan Documents within the time frames set forth in section 1.1.131 of the Plan. ACMC has disclosed all material facts relating to the various Plan Documents entered into, or to be entered into, in connection with the Plan. The Plan Documents are fair and reasonable.
94. Objections to Plan.
(a) John Crane Objection. John Crane, Inc. ("John Crane") agreed to withdraw its objection to Plan confirmation after ACMC agreed to make certain non-material technical modifications to the Plan and Claims Resolution Procedures. Modified Claims Resolution Procedures, including the modifications ACMC agreed to make to resolve the John Crane Objection, were filed by ACMC on April 18, 2003. The modifications to the Claims Resolution Procedures that ACMC agreed to make to resolve the John Crane Objection were designed simply to clarify certain issues that were already contemplated by the Claims Resolution Procedures. The modifications to the Plan required to resolve the John Crane Objection were set forth in the Technical Modifications. These modifications operate to preserve John Crane's setoff rights on a very limited basis; specifically, such setoff rights are preserved only in the event that ACMC asserts an Asbestos Claim against John Crane. The agreement with John Crane resolving the John Crane Objection is fair, equitable and reasonable. No further notice of such agreement is necessary.
(b) Resolution of AMICO Objection. AMICO is not a creditor of the Debtor, but is an insurer of the Debtor that filed an objection to the Plan. AMICO agreed to withdraw the AMICO Objection after ACMC reached an agreement to settle certain issues with AMICO. The basic terms of the agreement with AMICO are described in paragraph 72(c) above. The agreement with AMICO resolving the AMICO Objection is fair, equitable and reasonable. The Bankruptcy Court concludes that parties in interest could have anticipated that the AMICO Objection would have been resolved by agreement. Given that the agreement with AMICO resolves the Plan objection filed by AMIGO, which was served in accordance with the Notice of Confirmation Hearing, that the agreement was fully disclosed at the Confirmation Hearing and that the agreement with AMICO does not adversely affect any creditor or other party in interest in the Reorganization Case, the Debtor is authorized to enter into such agreement without further notice to any creditor or party in interest and without the need for a separate motion under Bankruptcy Rule 9019.
(c) Goldberg Objection. The Goldberg Objection, filed by the law firm of Goldberg, Persky, Jennings White, P.C. ("Goldberg, Persky"), on behalf of certain of its alleged clients who claim to hold Current Asbestos Claims (the "GP Claimants"), was not withdrawn. The only ballots cast by Goldberg, Persky on behalf of its clients pursuant to the Voting Procedures Order were untimely votes rejecting the Plan. Goldberg, Persky appeared at the Confirmation Hearing by telephone and did not present any evidence demonstrating excusable neglect or any other reason why the Bankruptcy Court should consider its untimely ballots. Further, Goldberg, Persky did not present any evidence in support of its objection to confirmation of the Plan. Goldberg, Persky has not demonstrated that the claims of the GP Claimants differ from those of their fellow class members in Classes 4 and/or 5 as to their rights against the Debtor, and the GP Claimants are treated similarly to their fellow class members.
Prominent law firms representing Asbestos Claimants across the country participated with ACMC and the Legal Representative in negotiating the New NGC Settlement and the Claims Resolution Procedures, and took into account successor liability considerations. To date, the issue of New NGC's successor liability to Asbestos Claimants has not been determined under the laws of any state, nor has the issue of what each state's choice of law rules would require. Any effort by the trustees of the NGC Bodily Injury Trust to presage how these cases would have been decided in each relevant jurisdiction would be purely speculative as would any determination by the trustees of the NGC Bodily Injury Trust about the relative values to be accorded to successor liability claims governed by the law of one jurisdiction vis-à-vis similar claims governed by the law of another jurisdiction.
As is discussed in paragraph 70(c)(i) above, in the absence of the New NGC Settlement and confirmation of the Plan, if New NGC had carried out its threat to file a chapter 11 case in North Carolina, the Debtor believes that New NGC would have argued that, under the choice of law rules of North Carolina, the federal bankruptcy court considering any successor liability claims against New NGC should apply the law of Texas because that is where the asset sale took place and that is the choice of law rule specified in the Assets Purchase Agreement. The Court has found this to be a credible position for New NGC to take and one that is consistent with the position taken by debtors in other jurisdictions that a uniform law should apply to similar claims seeking the same relief. In this event, there would be no differentiation between the strengths or weaknesses of any particular claimant's successor liability claim. Moreover, even if New NGC's argument were unsuccessful, all claimants can be expected to argue that the law of the state with the most favorable successor liability law should apply. Furthermore, such laws could change over time, forcing the NGC Bodily Injury Trust to re-evaluate the subjective successor liability rankings accorded to each state. In addition, given that New NGC's formation pursuant to the 1993 Reorganization Plan is a unique circumstance, not duplicated by many other corporations, the manner in which state law would approach the successor liability of New NGC is speculative.
For example, in the Babcock Wilcox fraudulent conveyance adversary proceeding, a critical issue was whether BW was insolvent at the time of the transactions at issue. A key legal issue was whether future asbestos claims should be included in the calculation of BW's debts to determine whether BW was solvent at the time of the asset transfers under attack. The defendants argued that, under Louisiana law, such claims were not included. Application of the laws of many other relevant jurisdictions appeared to result in an opposite conclusion. The Louisiana bankruptcy court ruled that application of either the forum state's choice of laws rule or a federal choice of laws rule led to the same conclusion. Louisiana fraudulent transfer law should govern the case because Louisiana had the most significant contacts with the transactions being challenged. The bankruptcy court rejected the asbestos committee's argument that it should apply the most favorable law in any state where an asbestos claimant was injured, concluding that such an approach would "result in mass confusion." Babcock Wilcox Company v. Babcock Wilcox Investment Co., et al. (In re Babcock Wilcox Co.), Ch. 11 Case No. 00-10992, Adv. No. 01-1155, bench ruling at 62-63 (E.D.La. June 25, 2001).
All of these factors would render any attempt by the NGC Bodily Injury Trust to assign a value to such potential claims extremely subjective and highly speculative, which would be contrary to the fiduciary obligations of trustees. Given the uncertainties faced by all claimants and the speculative nature of ranking the strength or determining the value of successor liability claims by state, either by agreement or litigation, the parties to the negotiation appropriately and reasonably agreed that the Claims Resolution Procedures should not make distinctions in the compensation of Claimants under the Claims Resolution Procedures based on successor liability law that might apply to particular claimants. Requiring the Claims Resolution Procedures to attempt to determine the merit of each Asbestos Claimant's successor liability claim against New NGC, particularly where such evaluation would be based on pure speculation, would be unworkable and unduly burdensome.
There was no consensus that some Asbestos Claimants had stronger successor liability claims than others. On the other hand, the Bankruptcy Court determined that treatment of Asbestos Claims had to be based on historical data. The trustees of the NGC Bodily Injury Trust can only operate on historical data, and not on speculative considerations. Furthermore, without equality of treatment, the Plan may not have received acceptance by at least 75% of the Asbestos Claimants as required by section 524(g). For these reasons, the Bankruptcy Court overruled the Goldberg Objection.
(d) Cascino Objection. The Cascino Objection was filed almost two months after the deadline for filing objections to the Plan. Cascino Vaughan Law Offices ("Cascino Vaughan"), which filed the Cascino Objection, had ample notice of the February 19, 2003 deadline set by the Bankruptcy Court for filing objections to confirmation of the Plan. No representative of Cascino Vaughan appeared at the Confirmation Hearing to prosecute the Cascino Objection. The Bankruptcy Court overruled the Cascino Objection for non-prosecution. In addition, Cascino Vaughan presented no evidence of excusable neglect for the Bankruptcy Court to consider the late-filed Cascino Objection, so the Bankruptcy Court also overruled the Cascino Objection for being untimely. Furthermore, the Bankruptcy Court, after considering all of the evidence presented in support of Confirmation of the Plan and taking judicial notice of all pleadings and matters occurring in the NGC Reorganization Cases and the Reorganization Case, finds there is no merit or validity to any of the objections raised in the Cascino Objection.
The Cascino Objection complains about the settlement relative to BI Settlement Claims, but provides no evidence in support of its objection to this settlement. For the reasons set forth above, the Bankruptcy Court finds that the settlement relative to BI Settlement Claims fair, equitable and reasonable.
There is no evidence of any impropriety in the performance by Messrs. Hilton, Taggart, Kahn, Esserman and Iola of their fiduciary obligations to their respective constituencies. In many instances, moreover, such performance was undertaken in reliance on court orders, entered after notice to Cascino Vaughan and their clients, directing the NGC Settlement Trust and ACMC to take the very actions about which the Cascino Objection complains. The record demonstrates that the NGC Settlement Trust's decision to allow ACMC to remain in the CCR for the resolution of Asbestos Claims was justified by the efficiencies and economies which a joint defense arrangement of this type brings to bear. The decision to remain in the CCR pending the appeal of the Liability Ruling was also appropriate. The NGC Settlement Trust had obtained the Liability Ruling from the Bankruptcy Court and an affirmance of the Liability Ruling from the District Court. If the Liability Ruling were upheld on appeal as was anticipated, all Asbestos Claimants would have been paid in full by the NGC Settlement Trust or through access to New NGC's assets. Experience had proven that the CCR was an efficient and economical mechanism for resolution of Asbestos Claims in accordance with the Plan, and the Bankruptcy Court had approved participation in the CCR. Withdrawal from the CCR during the pendency of the appeal would have lost the benefits of the CCR's claims resolution procedures even though, if the Liability Ruling had ultimately been affirmed, all parties agreed that it was the best mechanism for resolving Asbestos Claims. Moreover, during the appellate period, the NGC Settlement Trust could continue to pay Asbestos Claims through the CCR instead of imposing a hiatus on such payments.
Thus, the Bankruptcy Court finds no evidentiary basis for or validity to the Cascino Objection's assertion that, prior to the Effective Date, Messrs. Taggart, Kahn and Hilton breached their fiduciary duties. In fact, their service prior to the Effective Date makes these individuals ideal candidates to serve in the roles assigned to them under the Plan. Moreover, the Bankruptcy Court finds no evidentiary basis for or validity to the Cascino Objection's assertion that Mr. Iola made prior, improper representations to the Bankruptcy Court concerning product identification. Mr. Iola's service prior to the Effective Date makes him an appropriate candidate to serve as a member of the NGC Bodily Injury Trust Advisory Committee. Finally, the Bankruptcy Court finds no evidentiary basis for or validity to the Cascino Objection's assertion that Mr. Esserman should not serve because of alleged conflicts of interest. Mr. Esserman's service prior to the Effective Date makes him an appropriate candidate to serve as the Legal Representative for purposes of the NGC Bodily Injury Trust.
95. Plan Objections Overruled. All objections to the Confirmation of the Plan have either been satisfied by consent, modification and/or amendment to the Plan, or are addressed by these Findings and Conclusions, as the case may be. Any objection not resolved or withdrawn prior to the Confirmation Hearing has no validity or merit under the facts or applicable law, and the Bankruptcy Court overrules such objections.
CONCLUSIONS OF LAW
96. Jurisdiction and Venue. The Bankruptcy Court and the District Court have jurisdiction of this matter pursuant to 28 U.S.C. § 157 and 1334. Venue is proper in this district pursuant to 28 U.S.C. § 1408 and 1409.
97. Core Proceeding. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b).
98. Withdrawal of Reference. Although the reference of this case has been partially withdrawn by the District Court, the order withdrawing the reference referred to the Bankruptcy Court the authority to conduct the Confirmation Hearing and to make a recommendation to the District Court relative to the entry of the Confirmation Order and the Supplemental Injunction.
99. Debtor Burden of Proof Satisfied. ACMC has satisfied its burden of producing evidence that the Plan complies with sections 1129(a), 1129(b) and 524(g) of the Bankruptcy Code.
100. Technical Modifications. By separate order, dated April 24, 2003, the Bankruptcy Court has granted the Technical Modifications Motion. Such order is incorporated herein by reference. The Technical Modifications (a) comply with section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and all other provisions of the Bankruptcy Code, including, without limitation, sections 1122 and 1123; (b) do not adversely change the treatment under the Plan of any Claims or Interests and (c) do not require resolicitation of the Plan. Similarly, the change to the definition of " Prostok Action" set forth in section 1.1.136 of the Plan described to the Bankruptcy Court at the Confirmation Hearing, which modification will be set out in the Confirmation Order, does not adversely change the treatment of any Claims or Interests under the Plan, has been made in compliance with section 1127(a) of the Bankruptcy Code and Bankruptcy Rule 3019 and does not require resolicitation of the Plan. In light of the technical nature of the Technical Modifications and the change to section 1.1.136 of the Plan, no additional disclosure under section 1125(b) of the Bankruptcy Code is required with respect to the Technical Modifications or the change to section 1.1.136 of the Plan. Accordingly, pursuant to section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, all Claimants holding Claims and Interest Holders holding Interests that have accepted or are deemed to have accepted the Third Amended Plan are presumed to have accepted the Plan as modified by the Technical Modifications and the modification to the definition of " Prostok Action" referenced above.
101. Compliance with Sections 1122, 1123, 1129 and 524(g) . As set forth in these Findings and Conclusions, the Plan complies with the applicable requirements of sections 1122, 1123, 1129 and 524(g) of the Bankruptcy Code, with the exception of section 1129(a)(8), which non-compliance has been resolved by the Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code. There remains no issue of law or fact, nor any objection, which would preclude confirmation of the Plan. Neither the Goldberg Objection nor the Cascino Objection has proven that the Plan violates any confirmation requirement or any other applicable rule of law. The Plan should be confirmed and all objections should be overruled.
102. Approval of Settlements. The Bankruptcy Court has jurisdiction to approve each of the proposed settlements described above (collectively, the "Settlements") pursuant to, inter alia, 28 U.S.C. § 157 and 1334, and Bankruptcy Rule 9019. The Settlements are in the best interests of the Estate and within a range of reasonableness for resolving costly, complex and uncertain litigation. The Settlements, together with the Stipulation related to the Prostok Bondholder Settlement, are fair, equitable and reasonable under § 1129(b) of the Bankruptcy Code as to Classes 3, 6 and 7 and should be approved in all respects.
103. Authority to Enter Injunctions. The District Court has inherent constitutional and statutory power and authority to issue and enter the discharges, releases and injunctions (including, but not limited to, the Injunctions) contained in the Plan and Confirmation Order. See A.H Robins, 88 B.R. at 754 (holding that "the court may and will exercise its equitable power and authority to issue injunctive relief where there is a basis for concluding that reorganization or rehabilitation of [the debtor] might be undermined and frustrated by the actions sought to be enjoined")
104. Approval of Injunctions. Pursuant to section 105, 524 and 1123(b)(3) of the Bankruptcy Code, the releases, discharges, and injunctions (including, but not limited to, the injunctions) set forth in the Plan and to be implemented by the Confirmation Order are an integral part of the Plan and are fair, equitable, reasonable, and in the best interests of ACMC and its estate, Reorganized ACMC, the NGC Bodily Injury Trust, and holders of Claims, Demands and interests. All the legal requirements for granting such releases, discharges and Injunctions, including but not limited to the requirements set forth in section 524(g) of the Bankruptcy Code, have been met.
105. The Protected Parties are Entitled to the Protections of the Supplemental Injunction.
(a) A chapter 11 debtor is the primary beneficiary of the section 524(g) injunction. The entire section (and the Bankruptcy Code) generally speaks to the availability of section 524(g) protection to the debtor. First, the Bankruptcy Code specifically provides that the provisions of chapter 5 of the Bankruptcy Code apply to chapter 11 debtors. See 11 U.S.C. § 103(a). Second, the introductory clauses to section 524(g) provide ". . . a court that enters an order confirming a plan of reorganization under chapter 11 may issue, in connection with such order, an injunction . . . to supplement the injunctive effect of a discharge under this section." 11 U.S.C. § 524(g)(1)(A). This language demonstrates that the debtor can be the beneficiary not only of the discharge, but also of the section 524(g) injunction. Third, 11 U.S.C. § 524(g)(3)(A) provides that no entity that pursuant to a plan becomes a direct or indirect transferee of, or successor to any assets of, a debtor shall be liable for the debtor's asbestos claims solely by reason of its becoming such a transferee or successor. This directive can only be enforced if the section 524(g) injunction is intended to include within in its scope the debtor and any recipients of the debtor's assets under the plan. Under the Plan, these entities include Reorganized ACMC and the NGC Bodily Injury Trust. Finally, and most importantly, 11 U.S.C. § 524(g)(4)(B) specifically contemplates that the section 524(g) injunction would be available to protect the debtor from Demands. That section provides that, if a section 524(g) injunction is to be implemented pursuant to a plan, then such injunction shall be valid" . . . against the debtor or debtors involved, or against a third party described in [section 524(g)(4)(A)]." 11 U.S.C. § 524(g)(4)(B) (emphasis added). The foregoing provisions justify the inclusion of ACMC, Reorganized ACMC and the NGC Bodily Injury Trust within the protection of the Supplemental Injunction.
(b) The inclusion of certain related parties, including the Debtor's Representatives, Subsidiaries, and Affiliates, the Creditors' Committee, the Legal Representative and their respective successors and assigns, is a logical extension of this protection. As the Celotex and Fuller-Austin courts have recognized, the extension of this protection to these Protected Parties ensures that parties whose only exposure to Asbestos Claims derived indirectly from their connection to ACMC and the Reorganization Case and who, as a result, may have indemnification claims against ACMC are also covered by the Supplemental Injunction. See In re The Celotex Corp., Confirmation Order, No. 96-2220-CIV-21 (M.D.Fla. 1996) (ordering that "all Entities which have held or asserted, which hold or assert or which may in the future hold or assert any claim, demand or cause of action . . . against any Released Party . . . shall be permanently stayed, restrained or enjoined . . ." where Released Parties are defined, among others, as "the Debtors, Reorganized Celotex, Reorganized Carey Canada and the Consolidated Affiliates, any of their respective successors or assigns and each of their present and former directors, officers, agents, attorneys, accountants, financial advisors, investment bankers and employees."); In re Fuller-Austin Insulation Co., Order Approving The Disclosure Statement And Confirming The Plan of Reorganization For Fuller-Austin insulation Company, No. 98-2038-JJF (D.Del. 1998) (ordering that "all Entities which have held or asserted, which hold or assert, or which may in the future hold or assert any claim, demand or cause of action . . . against the Released Parties (or any of them) . . ." where Released Party is defined as "appropriate third parties, as that term is applied in Section 524(g)(4)(A)(ii) of the Bankruptcy Code, and consist of the following Entities: (a) the Debtor, Reorganized Fuller-Austin, and DynCorp, and any of their respective successors or assigns and each of their present and former directors, officers, agents, attorneys, accountants, financial advisors, investment bankers and employees; (b) the Committee, its members and representatives, and the Legal Representative; (c) the professionals or experts retained by any of the Debtor, the Committee, or the Legal Representative . . .").
(c) in addition to the protection afforded the debtor or transferees or successors of the debtor under the plan, section 524(g)(4) sets forth the broad categories of third parties who, if alleged to be directly or indirectly liable for Asbestos Claims, may be beneficiaries of the Supplemental Injunction. Generally, these categories include:
(i) Third parties who have a financial ownership interest in the debtor, a past or present affiliate of the debtor, or a predecessor in interest of the debtor ( 11 U.S.C. § 524(g)(4)(A)(ii)(I));
(ii) Third parties who have been involved in the management of the debtor or a predecessor in interest or who have served as an officer, director or employee of the debtor or a related party ( 11 U.S.C. § 524(g)(4)(A)(ii)(II));
(iii) Third parties who have provided insurance to the debtor ( 11 U.S.C. § 524(g)(4)(A)(ii)(III)); or
(iv) Third parties who have been involved in a transaction changing the debtor's corporate structure, or in a loan or other transaction affecting the financial condition of the debtor, or have provided financing or given advice to an entity involved in such a transaction ( 11 U.S.C. § 524(g)(4)(A)(ii)(IV)).
Each of the other Protected Parties falls within one or more of these categories, or is a Representative, Subsidiary, shareholder of Affiliate of an Entity covered by these categories and, therefore, is entitled to the protection of the section 524(g) injunction for the reason described above. In this regard, the NGC Settlement Trust, which currently owns and manages ACMC, is directly liable for the Asbestos Claims because it has assumed the liability of ACMC under the provisions of the 1993 Reorganization Plan. Similarly, the NGC Bodily Injury Trust, separate and apart from its right to be protected as a transferee of ACMC's assets under the Plan ( 11 U.S.C. § 524(g)(3)), will be directly liable for the Asbestos Claims because it will assume the liability of ACMC under the provisions of the Plan; the NGC Bodily Injury Trust will also own and manage Reorganized ACMC. These entities are entitled to be protected by the Supplemental injunction pursuant to the provisions of 11 U.S.C. § 524(g)(4)(A)(ii)(I) and (II). Similarly, the PD TAC, the BI TAC and the NGC Legal Representative arguably could be liable for the Asbestos Claims by virtue of their involvement with the 1993 Reorganization Plan or its implementation through the last ten years or through their involvement, albeit on an advisory basis, in the management of the NGC Settlement Trust and ACMC. These parties are entitled to be protected by the Supplemental Injunction pursuant to the provisions of 11 U.S.C. § 524(g)(4)(A)(ii)(II).
Notwithstanding the injunctive provisions of the Supplemental Injunction, the Supplemental Injunction allows the assertion of Asbestos Claims against ACMC and the NGC Bodily Injury Trust in accordance with the Claims Resolution Procedures.
(d) The parties listed in subparagraph (iii) of the Protected Party List, see Finding of Fact ¶ 66(t), the Settling Asbestos insurance Companies and their Representatives Subsidiaries and Affiliates, are allegedly either directly or indirectly liable for the Asbestos Claims because they have provided insurance to ACMC. These parties are entitled to be protected by the Supplemental Injunction pursuant to the provisions of 11 U.S.C. § 524(g)(4)(A)(ii)(III).
(e) The parties listed in subparagraph (iv) of the Protected Party List, New NGC and certain related persons, have been alleged to be directly or indirectly liable for the Asbestos Claims covered by section 524(g)(4)(A)(ii). New NGC is alleged to be liable under theories of state successor liability premised on New NGC's involvement in a transaction affecting the financial condition of the Debtor, i.e., the 1993 Reorganization Plan pursuant to which New NGC acquired certain operating assets of ACMC, and thus New NGC, its lenders, Representatives, shareholders and Affiliates qualify for protection under subsection 524(g)(4)(A)(ii)(IV). The individuals identified in subparagraph (d) of the Protected Party List are alleged to be liable based on their involvement in the management of ACMC during the NGC Reorganization Cases and thus they are entitled to protection by the Supplemental Injunction pursuant to 11 U.S.C. § 524(g)(4)(A)(ii)(II).
(f) Finally, the parties listed in subparagraph (v) of the Protected Party List, the Senior Bondholder Defendants and their affiliates and representatives, have been alleged to be directly or indirectly liable for the Asbestos Claims by virtue both of their involvement in the management of ACMC during the NGC Reorganization Cases, but also their involvement in the transactions related to the 1993 Reorganization Plan. These parties are entitled to be protected by the Supplemental Injunction pursuant to the provisions of 11 U.S.C. § 524(g)(4)(A)(ii)(II) and (IV).
106. Approval of Claims Resolution Procedures. The procedures set forth in the Claims Resolution Procedures for administering and making distributions with respect to Asbestos Claims by the NGC Bodily Injury Trust are reasonable and satisfy the requirements of section 524(g) of the Bankruptcy Code.
107. Assumption/Rejection of Prepetition Executory Contracts and Unexpired Leases. The assumption of certain prepetition unexpired leases and executory contracts provided for in Exhibit C to the Plan is in the best interests of ACMC and ACMC has satisfied the requirements of section 365 of the Bankruptcy Code. All prepetition unexpired leases and executory contracts not listed on Exhibit C are rejected. No cure amount is owing with respect to assumed executory contracts and unexpired leases.
108. Exemption From Securities Law.
(a) Pursuant to section 1125(e) of the Bankruptcy Code, the transmittal of the Solicitation Packages and Asbestos Claimant Solicitation Packages, the solicitation of acceptances of the Plan, and the participation in the offer, issuance, sale or purchase of the Reorganized ACMC Common Stock and any other securities pursuant to the Plan, shall not subject ACMC, the NGC Settlement Trust, the Legal Representative, New NGC, the Creditor's Committee or any other Person to any liability, on account of such solicitation or participation, for violation of any applicable law, rule, or regulation governing solicitation of acceptance or rejection of a plan or the offer, issuance, sale or purchase of securities.
(b) Pursuant to section 1145(a)(1) of the Bankruptcy Code, the offering, issuance and distribution pursuant to the Plan of Reorganized ACMC Common Stock and any other distributions that may be deemed to be securities shall be exempt from section 5 of the Securities Act and from any state or local law requiring registration, notification, qualification or exemption prior to the offering, issuance, distribution or sale of securities.
109. Retention of Jurisdiction Proper. The Bankruptcy Court or the District Court, as may be provided in the Plan, may retain jurisdiction over the matters set forth in section 12.1 of the Plan and the Confirmation Order as ultimately entered by the District Court.
110. Continuation of Debtor. The Plan and the transactions contemplated by it do not provide for, and, when consummated, will not constitute, the liquidation of all or substantially all of the property of the Estate of ACMC within the meaning of section 1141(d)(3) of the Bankruptcy Code.
111. Appointment of Officers, Directors, Trustees and Other Representatives. The appointment of Alan R. Kahn, Anne N. Foreman and Walter J. Taggart as the initial directors of Reorganized ACMC and as the initial Trustees of the NGC Bodily Injury Trust, and the appointment of W.D. Hilton, Jr., as the initial President of ACMC and the Executive Director of the NGC Bodily injury Trust, are in the best interests of ACMC and its Estate and consistent with public policy, and should be approved. The appointment of Sander L. Esserman as initial Legal Representative for Future Asbestos Claimants pursuant to the NGC Bodily injury Trust Agreement is in the best interests of ACMC, its Estate and Future Asbestos Claimants and consistent with public policy, and should be approved. The appointment of Russell W. Budd, Mark H. Iola and Robert B. Steinberg as initial members of the NGC Bodily injury Trust Advisory Committee pursuant to the NGC Bodily Injury Trust Agreement, are in the best interests of ACMC, its Estate and Current Asbestos Claimants and consistent with public policy, and should be approved.
112. Adequacy of Notice. Notice of, among other things, the Reorganization Case, the hearing on the adequacy of the Disclosure Statements, the Plan, the New NGC Settlement, the other Settlements, and the Confirmation Hearing was reasonable, adequate and sufficient under the circumstances and provided creditors of ACMC, Current Asbestos Claimants, Future Asbestos Claimants and parties in interest adequate notice of the relevant proceedings herein and an opportunity to appear and be heard, as required by the Bankruptcy Code, the Bankruptcy Rules, the United States Constitution and other applicable law. The notices described in paragraphs 21 through 25, and paragraphs 28 and 36, the appointment of the Legal Representative to represent the interests of Future Asbestos Claimants and the Legal Representative's adequate representation of Future Asbestos Claimants in all phases of the Reorganization Case as found in paragraph 44 are sufficient to bind Future Asbestos Claimants under the Plan and the injunctions and affords such Future Asbestos Claimants due process.
113. Binding Effect of the Plan and the Confirmation Order. The provisions of the Plan and the Confirmation Order will be binding on the Debtor, Reorganized ACMC, the NGC Bodily Injury Trust, all Asbestos Claimants, Claimants and Interest Holders (whether or not impaired under the Plan and whether or not, if impaired, they accepted the Plan), any other Person making an appearance in the Reorganization Case, and any other Person or Entity affected thereby, as well as their respective heirs, successors, assigns, trustees, subsidiaries, affiliates, officers, directors, agents, employees, representatives, attorneys, beneficiaries, guardians and similar officers or any Person claiming through or in the right of such Person.
C C. Conclusion
These Findings and Conclusions shall serve to support the entry of the Confirmation Order confirming the Plan and issuing the injunctions, including the Supplemental Injunction. Accordingly, the Bankruptcy Court respectfully recommends that the District Court enter the proposed Confirmation Order to be forwarded to the District Court with the Report and Recommendation of the Bankruptcy Court.