Manville Creditors Object to Plan for Reorganization

A group of commercial creditors of Manville Corp. raised new objections on Friday to the asbestos maker’s reorganization plan, the same day that the plan was formally presented to a federal bankruptcy court.

Lawyers for banks and other companies that filed the first commercial creditors’ claims on Manville’s assets denounced recent changes to the reorganization plan that would recognize some claims by other commercial creditors. Recognition of the additional claims would reduce what the original group of creditors may receive by 10% to 15%, attorneys said.

Manville filed for protection under Chapter 11 of the U.S. Bankruptcy Code in 1982, saying the move was forced by the mounting claims of asbestos victims. Although the reorganization plan was formally filed on Friday, Manville has disclosed details of it in recent months.

“As presently constituted, the prospects of this plan getting our approval are nil,” said John Jerome, attorney for the original commercial creditors. The original commercial creditors’ claims total $450 million, plus interest that to date totals about $200 million.

Nonetheless, attorneys for Manville and victims of asbestos-related injuries asserted after a court hearing that the objecting creditors will probably reconsider their position and approve the plan. “There just isn’t enough money to give everybody everything,” said Elihu Inselbuch, attorney for some asbestos victims.