Manville Makes a Deal on Control of the Firm
Manville Corp. management has struck a tentative deal with creditors and health injury claimants on the explosive issue of who will run the one-time asbestos manufacturer when it emerges from its pending bankruptcy court reorganization.
A proposed agreement on the issue, which has threatened to derail a 3 1/2-year reorganization effort, will be presented to Manville’s board for a vote Monday, Manville attorney Michael Crames said during a U.S. Bankruptcy Court hearing here Thursday.
Attorneys wouldn’t discuss details, but the tentative deal will apparently give some say in choice of directors and top management to creditors and those alleging health injury from Manville asbestos. The Denver-based maker of forest and building products sought bankruptcy court protection in 1982, contending that it could not pay off thousands of claims brought by people claming injury from Manville asbestos.
Leon Silverman, principal architect of the reorganization plan and an attorney for future health claimants, has said he could not support a plan unless claimants’ representatives had a say in the choice of chairman and board members. He has opposed the continued leadership of John A. McKinney, Manville’s chairman and chief executive, and noted that health claimants will hold 80% of Manville stock in the reorganized company.
Attorneys for creditors and present health claimants have also sought a say in the selection of top management and board members. But in a meeting last Monday, the Manville board voted to reserve such a prerogative for itself.
U.S. Bankruptcy Judge Burton Lifland adjourned a hearing on the case until Tuesday.
Separately, Manville said it has settled out of court with three more of the 28 insuring companies that it has sued to help shoulder the burden of paying off asbestos injury claims. Agreements giving it $27.25 million, plus interest since April 15, have been reached with Sun Insurance Office and affiliates Sun Alliance Insurance and London Assurance, Manville said. The agreements, if approved by the court, would mean that Manville has settled with 14 insurance carriers for about $500 million.