On October 1, 2001, Federal-Mogul Corporation and our U.S. subsidiaries voluntarily filed for financial restructuring under Chapter 11 of the U.S. Bankruptcy Code. At the same time, Federal-Mogul subsidiaries in the United Kingdom filed jointly for Chapter 11 and Administration under the U.K. Insolvency Act of 1986.
Federal-Mogul made the decision to reorganize under Chapter 11 in order to resolve excessive litigation we faced because of asbestos liabilities. Although our own exposure to asbestos litigation was limited, many of the companies we had acquired over the years had much deeper asbestos liability issues.
Chapter 11 is often used by companies faced with large numbers of product liability suits in multiple jurisdictions because it provides a practical way to address the potential liabilities in one place. A Chapter 11 filing immediately stops all lawsuits against a company and prevents creditors from taking action against a company to enforce claims or to collect any monies or property that might be owed.
Chapter 11 provides a process for a company to define and resolve its liabilities under a court-supervised process. Under a Chapter 11 bankruptcy filing — unlike a “Chapter 7” filing — a company continues its normal business operations.
During these restructuring proceedings, Federal-Mogul continued business operations without interruption, and with the full support of our major customers and suppliers. The emergence process is progressing toward conclusion in the U.S.
In October 2006, U.K. Company Voluntary Arrangements (CVAs) resolution became effective, enabling Federal-Mogul to retain under the CVAs all of the U.K. Administrated businesses. Furthermore, on November 17, the U.K. court entered an order discharging the Administration in the U.K. to be effective November 30.
On February 2, 2007, the United States Bankruptcy Court approved the Supplemental Disclosure Statement describing the Fourth Amended Joint Plan of Reorganization. On April 6, 2007, the solicitation period for voting on the Plan ended. All classes voted in support of the Plan.
The Bankruptcy Court set June 18-21, 2007, for the Confirmation hearing with respect to the Amended Plan. The evidentiary phase of the Confirmation hearing resumed on July 9, 2007, and concluded on July 10, 2007, with closing arguments set to begin on October 1, 2007.
On November 8, 2007, the United States Bankruptcy Court, the Honorable Judith K. Fitzgerald presiding, issued an order confirming the Company's Fourth Amended Plan of Reorganization, on a wholly consensual basis without objections, paving the way for Federal-Mogul to emerge from Chapter 11.
On November 14, 2007, the United States District Court, the Honorable Joseph H. Rodriguez presiding, affirmed the Confirmation Order.
The Amended Plan is jointly proposed by Federal-Mogul, the Unsecured Creditors Committee, the Asbestos Claimants Committee, the Future Asbestos Claimants Representative, the Agent for the Prepetition Bank Lenders and the Equity Committee. The Plan also has the support of the Asbestos Property Damage Committee and the Ad Hoc Committee of Unsecured Creditors.
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