The following is a brief overview of the major steps that are expected to take place as Federal-Mogul moves through the Administration process, from filing through stabilization of the business, reorganization and ending with emergence.

Phase 1 — Filing

• Federal-Mogul voluntarily files a petition for an Administration Order under the 1986 Insolvency Act.
• Upon filing, an “automatic stay” on creditor action is commenced, which freezes all legal action and debts against Federal-Mogul.
• Daily business operations continue to serve customers.

Phase 2 — Statutory requirements upon appointment

• Upon appointment of the Administrators, they must place an advertisement in the newspapers giving notification of the appointment.
• Within 14 days, all employees must be informed of the appointment and be advised of their continued employment.
• All known creditors of the company must be contacted within 28 days of the appointment.
• Within 14 days of every six-month period, reports must be sent to all known creditors.
• Within two months of every six-month period, an abstract of receipts and payments must be sent to the Court, Registrar of Companies and all members of the Creditors’ Committee.

Phase 3 — Plan strategy for exit from Administration

• The Administrators, working with Federal-Mogul where appropriate, begin to stabilize trading to ensure that the company can meet all of our ongoing operating obligations, including employee wages and benefits, payments to suppliers for any goods or services provided after the filing date, as well as routine capital expenditures.
• The Administrators formulate proposals to achieve the purpose of the Administration order, which will encompass a resolution of Federal-Mogul’s asbestos liabilities.
• A meeting of creditors is called within three months of filing to approve the Administrators’ proposals.

Phase 4 — Emergence

• Once the purposes of the Administration have been achieved, a strategy will be devised to exit the Administration.
• The precise exit strategy that will be adopted will depend upon the circumstances at that time.
• Federal-Mogul emerges from Administration with our asbestos liabilities resolved, removing the current uncertainty and providing a more secure future for Federal-Mogul, our employees, suppliers and customers.