CHARLOTTE, N.C.--(EON: Enhanced Online News)--EnPro Industries, Inc. (NYSE: NPO):
- GST and Coltec obtain asbestos claimant votes required for approval of their joint plan of reorganization
- Limited objections to the joint plan of reorganization have been filed
- Timing of GST emergence from bankruptcy remains on target
EnPro Industries, Inc. (NYSE: NPO) today reported that its subsidiaries, Garlock Sealing Technologies LLC (“GST”) and Coltec Industries Inc (“Coltec”), have obtained the asbestos claimant votes necessary for approval of the consensual joint plan of reorganization to resolve all current and future asbestos claims. The joint plan of reorganization was filed in GST’s asbestos claims resolution process under Chapter 11 of the Bankruptcy Code pending in the U.S. Bankruptcy Court for the Western District of North Carolina (the “Bankruptcy Court”).
The solicitation process for this approval was completed on December 9, 2016. The joint plan of reorganization requires approval by a vote of asbestos claimants by 75% or more in number and at least two-thirds (2/3) in dollar amount that were actually voted. The balloting agent tabulating the votes of asbestos claimants today filed a declaration with the Bankruptcy Court certifying that the percentages cast in favor of the joint plan significantly exceeded each of these thresholds. The balloting agent has certified that, of the votes cast, 95.85% in number and 95.80% in amount were in favor of approval of the joint plan.
The restructuring of Coltec, to facilitate the implementation of the settlement reflected in the joint plan and which was contingent upon approval of the joint plan by asbestos claimants, remains on target to be completed by year end. As contemplated by the joint plan, the restructured Coltec (referred to as “OldCo”), which will retain responsibility for all asbestos claims against Coltec and rights to certain insurance assets, intends to file a pre-packaged Chapter 11 bankruptcy petition at the end of January 2017. EnPro anticipates that Coltec’s bankruptcy case will be administered with GST’s pending Chapter 11 proceedings.
The deadline for filing objections to the joint plan in GST’s pending Chapter 11 proceeding was December 9, 2016. While no asbestos claimant or creditor filed any objection to the joint plan, objections were filed by the appointed bankruptcy administrator and by three insurers. The technical objection filed by the bankruptcy administrator, which is a non-judicial, federal appointee that is involved in cases from a perspective independent of an interested party, concerns the scope of the joint plan’s “exculpatory” provisions that would extend limited protection to the debtors in the case, their affiliates, committees appointed in the case, the future claimants’ representative and their respective professional advisors from liability for ancillary claims related to their actions or failure to act in connection with the case. The objections of the three insurers primarily concern the impact of the joint plan on insurance policies and related contracts to which they are parties. The deadline for the filing of objections to the joint plan in OldCo’s anticipated Chapter 11 proceeding is expected to be March 24, 2017. The hearing on objections to the joint plan and to determine whether the Bankruptcy Court will confirm the joint plan will commence on May 15, 2017.
Steve Macadam, EnPro’s President and Chief Executive Officer, said, “This vote is an important milestone in our effort to permanently resolve these asbestos claims. Although objections have been filed by the bankruptcy administrator and several insurers, we believe these objections, which we generally anticipated, will not materially delay approval of the joint plan of reorganization or require any material changes to the plan. Accordingly, we continue to anticipate receiving all necessary court approvals for confirmation of the plan, with the target that GST and OldCo will emerge from bankruptcy during the third quarter of 2017.”
The joint plan of reorganization was proposed pursuant to a comprehensive settlement, announced on March 17, 2016, with the court-appointed committee representing current asbestos claimants and the court-appointed legal representative of future asbestos claimants in GST’s asbestos claims resolution process pending in the Bankruptcy Court, as well as with ad-hoc representatives for current and future asbestos claimants against Coltec. In addition to the approval of asbestos claimants, the joint plan is subject to approval by the Bankruptcy Court and the U.S. District Court for the Western District of North Carolina (the “District Court”) and, if so approved and consummated, would permanently resolve all current and future asbestos claims against GST and Coltec and would protect all of EnPro and its subsidiaries from those claims, under Section 524(g) of the U.S. Bankruptcy Code.
Forward Looking Statements
Statements in this press release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that the joint plan may not obtain necessary approval by the Bankruptcy Court or the District Court, uncertainties related to pending and potential future objections to the joint plan, including with any changes to the joint plan implemented in the resolutions of such objections, the actions and decisions of creditors, insurers and other third parties that have an interest in the bankruptcy proceedings, the terms and conditions of any reorganization plan that is ultimately approved by the Bankruptcy Court, including with any changes to the joint plan implemented in the resolutions of objections, delays in the confirmation or consummation of the joint plan, risks with respect to the receipt of consents necessary to effect the corporate restructuring of Coltec and the timing of the completion of the restructuring, the occurrence of events that could delay the commencement of OldCo’s anticipated Chapter 11 proceeding, and risks and uncertainties affecting the ability to fund anticipated contributions under the joint plan as a result of adverse changes in results of operations, financial condition and capital resources, including as a result of economic factors beyond EnPro’s control. EnPro’s filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2015 and Form 10-Q for the period ended March 31, 2016, describe other risks and uncertainties. Except as may be required by law or as expressly undertaken in this press release, EnPro does not undertake to update any forward-looking statement made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based.
About EnPro Industries
EnPro Industries, Inc. is a leader in sealing products, metal polymer and filament wound bearings, components and service for reciprocating compressors, diesel and dual-fuel engines and other engineered products for use in critical applications by industries worldwide. For more information about EnPro, visit the company’s website at http://www.enproindustries.com.