Paddock Enterprises, LLC (“Paddock”), a wholly owned subsidiary of O-I Glass, Inc. (“O-I Glass”), announced that an order confirming its Plan of Reorganization (the “Plan”) was entered by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), paving way to the implementation of the Plan and the final stage in the Chapter 11 process.
“We are pleased to have achieved this significant milestone resolving Paddock’s legacy liabilities in a manner that is fair and equitable, and provides finality for the company moving forward,” said Andres Lopez, CEO of O-I Glass. “The broad support for the Plan among Claimants is indicative of the positive outcome it delivers to all parties. We look forward to implementing the final steps in the Chapter 11 process following this confirmation by the Bankruptcy Court.”
The approved Plan was jointly proposed by Paddock, the Asbestos Claimants’ Committee (“ACC”), the Future Claimants’ Representative (“FCR”), and O-I Glass and received the overwhelming support of Paddock’s asbestos Claimants, with more than 99% voting in favor. The centerpiece of the Plan is a trust established under section 524(g) of the Bankruptcy Code (the “Asbestos Trust”) that will process and pay Asbestos Claims pursuant to Asbestos Trust Distribution Procedures (“TDP”). In exchange for funding the Asbestos Trust, Paddock and its parent company, O-I Glass, as well as certain additional parties (collectively, the “Protected Parties”), will be protected by an injunction that will prohibit assertion of Asbestos Claims against the Protected Parties and will channel all such Asbestos Claims to the Asbestos Trust. As of the effective date, the Asbestos Trust will be funded with cash and other consideration totaling $610 million.
Paddock next will seek the United States District Court for the District of Delaware’s (the “District Court”) affirmation of the Bankruptcy Court’s order. Pending this approval by the District Court, Paddock expects to emerge from Chapter 11 in mid-2022, resulting in a permanent resolution to Paddock’s legacy asbestos liabilities.