The following is a brief overview of the major steps that are expected to take place as Federal-Mogul moves through the Chapter 11 process, from filing through formulation of a plan of reorganization and ending with confirmation of the plan of reorganization and emergence from the Chapter 11 proceedings.

Phase 1 — Filing

• Federal-Mogul voluntarily files a petition for reorganization under Chapter 11 of the United States Bankruptcy Code.
• Filing triggers an “automatic stay” that freezes all lawsuits and collection actions against Federal-Mogul.
• Federal-Mogul arranges a new “Debtor in Possession” credit facility. Upon court approval, these funds are available to help ensure that the company meets all of our ongoing operating obligations, including payroll and benefits, payments to vendors and suppliers for goods and services provided after the filing date, as well as routine capital expenditures.
• All facilities conduct normal business operations.

Phase 2 — Formulation of a Plan of Reorganization

• Creditors’ committees are formed to work with Federal-Mogul on reorganization-related issues. The bankruptcy court resolves any conflicts.
• A notice is sent out to anyone who may have financial or other claims against Federal-Mogul requesting that they submit “proof of claims” so that a master list of creditors can be developed.
• Federal-Mogul finalizes our long-range strategic business plan and a plan of reorganization, which will provide economic value to the stakeholders.

Phase 3 — Confirmation of a Plan of Reorganization and Emergence

• Federal-Mogul submits our proposed plan of reorganization and a disclosure statement, outlining our current and projected financial condition, for approval of the creditors and bankruptcy court.
• Creditors have an opportunity to vote to accept or reject the plan. Upon creditor approval, the bankruptcy court confirms the plan of reorganization and sets a date for Federal-Mogul to emerge from Chapter 11.
• Federal-Mogul emerges from the Chapter 11 process with our asbestos liabilities resolved as to amount and funding requirements, removing the current uncertainty and creating greater flexibility for the future.