Judge Clears Plan for Manville and Transfers Control

U.S. Bankruptcy Judge Burton Lifland on Thursday approved as expected a reorganization plan allowing Manville Corp. to emerge from bankruptcy but transferring control of the company to trustees for tens of thousands of victims of asbestos disease.

Reading aloud from his 48-page opinion, Lifland rejected several objections to the plan from Manville creditors including common shareholders, whose stakes in the company will be almost entirely eradicated.

The plan is still subject to appeals that could take a year or more to reach the U.S. Supreme Court, attorneys said. Assuming the appeals are ultimately rejected, Manville could begin payouts to asbestos victims, suppliers, banks and other creditors as soon as next July or as late as sometime in 1988.

In a statement issued from Manville’s Denver headquarters just after Lifland completed his reading, Chief Executive W. T. Stephens called the ruling “the official start of the new Manville. . . . We have accepted our obligations and have great challenges ahead of us.”