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In re Maremont Corp.

United States District Court, D. Delaware

May 17, 2019

In re MAREMONT CORPORATION, et al., [1]Debtors.

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER (I) APPROVING THE ADEQUACY OF THE DISCLOSURE STATEMENT, (II) APPROVING THE PREPETITION SOLICITATION PROCEDURES, AND (III) CONFIRMING THE MODIFIED JOINT PREPACKAGED PLAN OF REORGANIZATION OF MAREMONT CORPORATION AND ITS DEBTOR AFFILIATES PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE REF. DOCKET NOS. 10, 11, 65, 136, 139, 140, 142, 155, 158, 222, 223, 238

          KEVIN J. CAREY UNITED STATES BANKRUPTCY JUDGE.

         Recitals

         A. On December 4, 2018 (the "Solicitation Date"). Maremont Corporation ("Maremont") and its affiliated debtors and debtors in possession (collectively, the "Debtors") in the above-captioned chapter 11 cases (the "Chanter 11 Cases") commenced a prepetition solicitation (the "Solicitation") of votes to accept or reject the Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 10] (the "Original Plan." as supplemented by the Plan Supplement to the Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates [Docket No. 65] (the "Plan Supplement") and as modified by (i) the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 136], (ii) the modifications filed on March 17, 2019 [Docket No. 155], (iii) the modifications and revised Exhibit D (Asbestos Personal Injury Trust Distribution Procedures) filed on May 14, 2019 [Docket No. 222]; and (iv) the further revised Exhibit D filed on May 17, 2019 [Docket No.___] (collectively with the Original Plan, the Plan Supplement, and as may be further amended, modified, or supplemented from time to time, the "Plan")).[2] Specifically, on the Solicitation Date, the Debtors caused Donlin, Recano & Company, Inc. (the "Solicitation Agent'") to commence service of (i) the Disclosure Statement for the Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code, dated December 4, 2018 [Docket No. 11] (together with all exhibits thereto, the "Disclosure Statement") and all exhibits thereto, including, inter alia, the Original Plan, to Holders of Claims in the Voting Class (as defined below), all as more fully described in the Declaration of Jung W. Song of Donlin, Recano & Company, Inc. Regarding Solicitation of Votes and Tabulation of Ballots Cast on the Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 12] (the "Voting Declaration") and the Affidavit of Donlin, Recano & Company, Inc. Regarding Service of Solicitation Packages with Respect to the Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 13] (the "Affidavit of Service"). On December 12, 2018, the Debtors supplemented the Solicitation Package by mailing additional materials -including the ballot (the "Ballot") and master ballot (the "Master Ballot") for accepting or rejecting the Plan (together with the Plan, the Disclosure Statement and as supplemented on December 12, 2018, the "Solicitation Package"), the Asbestos Personal Injury Trust Agreement, and the Asbestos Personal Injury Trust Distribution Procedures (as may be modified, amended or supplemented from time to time, the "TOP").

         B. The Solicitation Package was distributed to each Holder of record or such Holder's counsel of record as of November 30, 2018 (the "Voting Record Date") of a Class 4 Asbestos Personal Injury Claim, the only Class of Claims or Interests entitled to vote to accept or reject the Original Plan (the "Voting Class"). The Debtors established January 18, 2019 at 4:00 p.m. (prevailing Eastern Time) as the deadline by which Holders of Claims in the Voting Class were required to have returned their completed Ballots or Master Ballots to the Solicitation Agent by first-class mail, overnight mail, or hand delivery.

         C. The Debtors did not solicit votes to accept or reject the Original Plan from Holders of Claims or Interests in Classes 1, 2, 3, 5, 6, 7 or 8, each of which was presumed to have accepted or rejected the Original Plan pursuant to sections 1126(f) or (g), as applicable, of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the "Bankruptcy Code").

         D. On January 22, 2019 (the "Petition Date"), the Debtors each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").

         E. On the Petition Date, the Debtors filed, among other documents and pleadings, (i) the Original Plan; (ii) the Disclosure Statement; and (iii) the Debtors' Motion for Entry of an Order (I) Scheduling Combined Hearing to Consider Approval of Disclosure Statement and Confirmation of Prepackaged Plan, (II) Establishing the Plan and Disclosure Statement Objection Deadline and Related Procedures, (III) Approving the Solicitation Procedures and Forms of Ballots, (IV) Approving the Form and Manner of Notice of the Combined Hearing, Objection Deadline, and Notice of Commencement, (V) Conditionally Directing that a Meeting of Creditors Not Be Convened, (VI) Conditionally Extending Deadline to File Schedules and Statements, and (VII) Granting Related Relief `[Docket No. 9].

         F. On January 23, 2019, the Bankruptcy Court entered the Order (I) Scheduling Combined Hearing to Consider Approval of Disclosure Statement and Confirmation of Prepackaged Plan, (II) Establishing the Plan and Disclosure Statement Objection Deadline and Related Procedures, (III) Approving the Solicitation Procedures and Forms of Ballots, (IV) Approving the Form and Manner of Notice of the Combined Hearing, Objection Deadline, and Notice of Commencement, (V) Conditionally Directing that a Meeting of Creditors Not Be Convened, (VI) Conditionally Extending Deadline to File Schedules and Statements, and (VII) Granting Related Relief [Docket No. 30] (the "Scheduling Order").

         G. In accordance with the Scheduling Order, the Bankruptcy Court established (i) March 4, 2019 at 4:00 p.m. (prevailing Eastern Time) as the deadline by which any responses or objections to the adequacy of the Disclosure Statement or confirmation of the Original Plan were to be filed (the "Objection Deadline"); (ii) March 12, 2019 as the date by which any replies in support of the Disclosure Statement or the Plan were to be filed; and (iii) March 18, 2019 at 1:00 p.m. (prevailing Eastern Time) as the date and time of the hearing at which the Bankruptcy Court would consider, among other things, the adequacy of the Disclosure Statement and confirmation of the Plan, which hearing was continued to May 14, 2019 at 2:00 p.m. (prevailing Eastern Time) (collectively, the "Combined Hearing").

         H. Under the Scheduling Order, the Debtors were required, on or before January 25, 2019, to serve notice of, among other things, the commencement of the Chapter 11 Cases, the Combined Hearing, the Objection Deadline, and the procedures for objecting to the adequacy of the Disclosure Statement and confirmation of the Plan [Docket No. 33] (the "Combined Notice"). As evidenced by the Affidavit of Service of Winnie Yeung, dated January 28, 2019 [Docket No. 35] (the "Combined Notice Affidavit"), the Debtors served the Combined Notice on January 25, 2019 upon all Holders of Claims or Interests, the United States Trustee for the District of Delaware f"U.S. Trustee"), all parties requesting notice under rule 2002 (the "Rule 2002 Service List") of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and other parties in interest and potential parties in interest.

         I. On several dates between January 25 and January 30, 2019, the Debtors published a supplemental notice of the commencement of the Chapter 11 Cases and the Combined Hearing and related procedures (the "Publication Notice"), once in each of The New York Times, USA Today, the Wall Street Journal, Mealey's Litigation Report: Asbestos, and Mealey's Asbestos Bankruptcy Report. See Docket Nos. 39, 40, 41, 42 and 43 (the "Certifications of Publication").

         J. On February 4, 2019, the U.S. Trustee appointed an official committee of asbestos personal injury claimants (the "Asbestos Claimants Committee"'). On March 13, 2019, the Bankruptcy Court entered the Order Appointing James L. Patton, Jr., as Legal Representative for Future Asbestos Claimants, Nunc Pro Tunc to the Petition Date [Docket No. 146] (the "Future Claimants' Representative").

         K. On February 15, 2019, the Debtors filed the Plan Supplement containing the following documents: (i) the Asbestos Records Cooperation Agreement; (ii) the Assumed Executory Contract and Unexpired Lease List; (iii) Reorganized Maremont's Bylaws; (iv) Reorganized Maremont's Certificate of Incorporation; (v) the List of Members of Reorganized Maremont Board and Reorganized Subsidiary Board, and List of Officers of Reorganized Maremont Reorganized Subsidiaries; and (vi) an amended Exhibit I to the Original Plan, listing the names and affiliations of Future Claimants' Representative, Asbestos Personal Injury Trustee, and members of the Asbestos Personal Injury Trust Advisory Committee. See Docket Nos. 65, 66.

         L. In the Voting Declaration, the Solicitation Agent certified the results of the Solicitation and confirmed that the Solicitation was carried out in accordance with the Solicitation Procedures. As further described below, the Voting Declaration certified that, among other things, Holders of Claims in the Voting Class that voted on the Plan voted unanimously to accept the Plan.

         M. On March 12, 2019, the Debtors filed the following documents concurrently herewith: (i) the Plan; (ii) a proposed form of this order (as may be modified, amended or supplemented from time to time, this "Order"); (iii) the Memorandum of Law in Support of Entry of an Order Approving the Adequacy of the Disclosure Statement and Confirming the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (the "Confirmation Memorandum"); (iii) the Declaration of Carl D. Anderson, II in Support of the Adequacy of the Disclosure Statement and Confirmation of the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 139] (the "Anderson Declaration"); and (iv) the Declaration of James L. Patton, Jr. in Support of the Memorandum of Law in Support of Entry of an Order Approving the Adequacy of the Disclosure Statement and Confirming the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 140] (the "Patton Declaration" and, together with the proposed form of this Order, the Confirmation Memorandum, and the Anderson Declaration, the "Confirmation Submissions").

         N. On March 17, 2019, the Debtors filed a Madeline of changed pages to the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates and Exhibit N to the Plan [Docket No. 155]. On May 14, 2019, the Debtors filed (i) a blackline of changed pages to the Modified Joint Prepackaged Plan of Reorganization of Maremont Corporation and Its Debtor Affiliates, (ii) a blackline of revised Exhibit D - Asbestos Personal Injury Trust Distribution Procedures [Docket No. 222], and (iii) a revised proposed form of this Order [Docket No. 223]. On May 17, 2019, the Debtors filed a certificate of counsel with (i) a blackline of revised Exhibit D - Asbestos Personal Injury Trust Distribution Procedures and (ii) a revised proposed form of this Order [Docket No.___].

         O. One objection to the Plan and Disclosure Statement was filed by the U.S. Trustee [Docket No. 112] (the "UST Objection"). The Debtors also received informal comments and/or requests that clarifying language be included in the Plan or this Order from (i) the United States Department of Justice, (ii) the United States Environmental Protection Agency, (iii) the Ohio Attorney General's Office and the Ohio Environmental Protection Agency, (d) Zurich, and (e) FFIC.

         P. The Bankruptcy Court held the Combined Hearing to consider the adequacy of the Disclosure Statement and confirmation of the Plan. At the initial portion of the Combined Hearing on March 18, 2019, the Bankruptcy Court overruled certain of the U.S. Trustee's objections to provisions in the TDP, including the objections to: (i) the confidentiality of claim submissions set forth in Section 6.5 of the TDP and the related discovery procedures; (ii) Sections 5.7(b)(3) and 5.7(a)(2) of the TDP; (iii) the claim withdrawal and deferral provisions in Section 6.3 of the TDP; (iv) the audit provisions in Section 5.8 of the TDP; and (v) the lack of a provision in the TDP limiting the amount of attorneys' fees that a claimant may pay to his or her attorney upon receiving payment from the Asbestos Personal Injury Trust. The Bankruptcy Court also directed that the TDP be revised to require claimants to provide certain additional information to the Asbestos Personal Injury Trust and to permit the Asbestos Personal Injury Trust to obtain certain additional information from the claimants in its discretion.

         Q. The Debtors filed modifications to the TDP on May 14, 2019 to address the remaining objection of the U.S. Trustee and the statements of the Bankruptcy Court at the March 18, 2019 portion of the Combined Hearing. On May 14, 2019, the Bankruptcy Court confirmed that the TDP, as modified, satisfied the Bankruptcy Court's concerns as stated at the March 18, 2019 portion of the Combined Hearing and as identified in paragraph P above, and that the TDP would be approved in connection with confirmation of the Plan. On May 17, 2019, the Debtors filed final revisions to the TDP with a certificate of counsel confirming that the TDP, as further modified, satisfies the remaining objection of the U.S. Trustee.

         WHEREFORE, the Bankruptcy Court having: (a) reviewed the Plan, the Combined Notice, the Affidavit of Service, the Combined Notice Affidavit, the Confirmation Submissions, and all filed pleadings, exhibits, statements and comments regarding the approval of the Disclosure Statement and confirmation of the Plan, including all objections, statements, and reservations of rights; (b) held the Combined Hearing on March 18, 2019 and May 14, 2019; (c) heard the statements and arguments made by counsel in respect of the approval of the Disclosure Statement and confirmation of the Plan; (d) considered all oral representations, affidavits, testimony, documents, filings and other evidence regarding approval of the Disclosure Statement and confirmation of the Plan, including, without limitation, evidence submitted or presented at the Combined Hearing; (e) overruled any and all objections to approval of the Disclosure Statement and to confirmation of the Plan and all statements and reservations of rights not consensually resolved or withdrawn unless otherwise indicated herein; and (f) taken judicial notice of all pleadings and other documents filed, all orders entered, and all evidence proffered or adduced and arguments presented in the Chapter 11 Cases;

         NOW, THEREFORE, the Bankruptcy Court having found that notice of the Combined Hearing and the opportunity for any party in interest to object to approval of the Disclosure Statement and confirmation of the Plan has been adequate and appropriate as to all parties affected or to be affected by the Plan and the transactions contemplated thereby, and that the legal and factual bases set forth in the Confirmation Submissions and all evidence presented at the Combined Hearing establish just cause for the relief granted herein; and after due deliberation thereon and good cause appearing therefor, the Bankruptcy Court hereby makes and issues the following findings of fact and conclusions of law and orders:

         Findings of Fact and Conclusions of Law

         IT IS HEREBY FOUND AND DETERMINED THAT:

         A. Findings of Fact and Conclusions of Law.

         1. The findings and conclusions set forth herein, in the recitals, and in the record of the Combined Hearing constitute the Bankruptcy Court's findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, made applicable herein by Bankruptcy Rules 7052 and 9014. To the extent any findings of fact constitute conclusions of law, or any conclusions of law constitute findings of fact, they are adopted as such.

         B. Corporate Structure.

         2. Maremont is a Delaware corporation and a wholly-owned subsidiary of Meritor, Inc. ("Meritor"), a public company organized under the laws of the State of Indiana. Maremont is headquartered in Troy, Michigan. Maremont's Debtor affiliates Maremont Exhaust Products, Inc. ("MEP"), AVM, Inc. ("AVM."), and Former Ride Control Operating Company, Inc. ("FRCOC") are wholly-owned by Maremont. AVM is a South Carolina corporation and FRCOC and MEP are incorporated in Delaware. See Declaration of Carl D. Anderson, II in Support of First Day Pleadings ¶ 3 [Docket No. 3] (the "Anderson First Day Declaration").

         C. History of the Debtors' Asbestos Personal Injury Liabilities.

         1. Corporate History.

         3. Historically, Maremont and its subsidiaries manufactured, distributed, and sold aftermarket friction products, including aftermarket brake linings, disc pads, and clutch facings (the "Friction Products Business"), aftermarket mufflers (the "Exhaust Products Business"). aftermarket shock absorbers and strut assemblies, and original equipment vacuum actuators for automotive climate controls systems, superchargers and turbochargers, and gas springs. Anderson First Day Decl. ¶ 4. Certain of the products manufactured and sold as part of the Friction Products Business and the Exhaust Products Business contained asbestos. However, Maremont and its subsidiaries have not manufactured or sold any asbestos-containing products since 1978. Id

         4. Maremont divested its business lines over time pursuant to multiple sale transactions, beginning with the sale of the Friction Products Business in June 1977. Anderson First Day Decl. ¶ 5. This was followed by the sale of the Exhaust Products Business and the Motion Control Business in 2006 and the sale of the Ride Control Business in 2009. By 2013, the Debtors had ceased all operations and divested all remaining operating assets. Id. The Debtors' ongoing operations as of the Petition Date relate to (a) managing their legacy environmental and asbestos liabilities and (b) owning the Commercial Property and collecting rents on a lease of that property pursuant to the Commercial Property Lease (each as defined below). Id.

         D. Maremont's Business and Property.

         5. Maremont owns an income-producing commercial property in Grand Blanc, Michigan, which was valued at approximately $1.4 million as of October 2018 (the "Commercial Property"). Anderson Decl. ¶ 7. The Commercial Property is a Dollar General store leased under a 15-year triple-net lease (the "Commercial Property Lease") that generates approximately $91, 000 in annual revenue. Id. The Debtors will assume the Commercial Property Lease pursuant to the Plan. See id; Plan, Ex. J. Reorganized Maremont intends to continue to own the Commercial Property business after the Effective Date, which will continue to generate rental income pursuant to the Commercial Property Lease. See id

         1. Asbestos Personal Injury Claims Against Maremont and Its Debtor Affiliates.

         6. Debtors Maremont and MEP have collectively been subject to thousands of personal injury and wrongful death claims asserting that they are liable for damages caused by exposure to asbestos-containing products that they or their predecessor(s)-in-interest allegedly used, sold, manufactured, marketed, produced or distributed or that were allegedly present in their manufacturing facilities. Anderson First Day Decl. ¶ 13. These suits commenced in 1977 and have continued to the present. As of December 31, 2018, there were approximately 13, 000 pending asbestos-related lawsuits against Maremont and MEP, of which approximately 1, 900 were considered by the Debtors to be active. Id. During the five-year period ending December 31, 2018, approximately 2, 600 asbestos-related lawsuits were asserted against Maremont and MEP. During this same period, Maremont has incurred and paid approximately $43.8 million in defense and settlement costs on account of the Asbestos Personal Injury Claims, including over $6.2 million in the calendar year ended December 31, 2018. Id. Maremont recently reported its contingent asbestos liabilities as of the end of fiscal year 2018 for the next 41 years at approximately $107 million (including future defense costs of approximately $79.6 million, of which $27.4 million was estimated to be incurred over the next five years). Id.

         2. Asbestos Personal Injury Claims Against Non-Debtor Affiliates of Maremont.

         7. In addition to the claims asserted against Maremont and its subsidiaries, certain plaintiffs also have alleged asbestos-related personal injury or wrongful death claims against one or more Non-Debtor Affiliates of Maremont, including Meritor, based upon or arising from alleged exposure to the Debtor Product Lines. Anderson First Day Decl. ¶ 14. These claims appear to name Non-Debtor Affiliates solely on account of the plaintiffs' purported exposure to the Debtor Product Lines. None of the Non-Debtor Affiliates has ever engaged in or been involved in the manufacture, distribution or sale of any of the Debtor Product Lines, and, to date, no court has issued a ruling or made a finding that any Non-Debtor Affiliate is liable for any claims based upon or arising from any of the Debtor Product Lines or that any such Non-Debtor Affiliate should be treated as a successor in interest or alter ego of the Debtors, or that Maremont's corporate veil should be pierced. Id

         8. In addition, Meritor and certain of its predecessors and affiliates other than the Debtors have been named as defendants in asbestos lawsuits alleging personal injury or wrongful death as a result of exposure to asbestos used in the Rockwell Product Lines of Rockwell International Corporation, i.e., the Rockwell Claims. Anderson First Day Decl. ¶ 15. Liability for certain Rockwell Claims was transferred to a predecessor of Meritor at the time of the spin-off of Rockwell International's automotive business to that predecessor in 1997. The Rockwell Product Lines are independent of the Debtor Product Lines, and while claims relating to the Debtor Product Lines will be channeled to the Asbestos Personal Injury Trust under the terms of the Plan, the Rockwell Claims will not. Id; see Plan § I.A.43, 1.A.76, I.A.82, 1.A.144, IA. 145.

         3. Remaining Maremont Insurance.

         9. Historically, Maremont maintained insurance coverage for asbestos liabilities under a number of primary and excess insurance policies issued by various insurers. The majority of Maremont's insurance coverage has been exhausted and released through insurance coverage settlements and is no longer available to provide coverage for asbestos-related personal injury or other claims. Anderson First Day Decl. ¶ 10.

         10. The only remaining coverage currently held by Maremont is with FFIC pursuant to the FFIC Agreement, which is a coverage-in-place settlement agreement entered into with FFIC in 2010. Anderson First Day Decl. ¶ 10. As of the Petition Date, the remaining indemnity limits under the FFIC Agreement were approximately $7 million. Anderson Decl. ¶ 12.

         11. FFIC, Zurich, Everest, and Mt. McKinley were each providers of insurance to the Debtors. As a good faith compromise and settlement, pursuant to Section IV.D of the Plan, FFIC and Zurich have agreed to be Settling Insurers as defined in the Plan. Anderson Decl. ¶ 13. Everest and Mt. McKinley have not objected to the treatment of the Everest Agreement as set forth in Section IV.D of the Plan, and are therefore being treated as Settling Insurers in accordance with Section IV.D of the Plan. Id. On the Effective Date, the FFIC Agreement, the Everest Agreement, and the Zurich Agreement will be rejected by the Debtors. FFIC, Zurich, Everest, and Mt. McKinley will each be Non-Estate Representative Released Parties and Protected Parties under the Plan. Id.

         4. Trust-Related Settlement Negotiations.

         12. As described in detail in the First Day Declaration, in the face of mounting costs to defend and resolve Asbestos Personal Injury Claims and dwindling insurance and other assets, Maremont decided to investigate a potential restructuring to be implemented through a chapter 11 proceeding, utilizing section 524(g) of the Bankruptcy Code to establish and fund a trust that would provide for the fair and equitable treatment of all Holders of Asbestos Personal Injury Claims. The parties' negotiation of the terms of the Plan and Asbestos Personal Injury Trust ultimately centered around fixing the amount of the Meritor Contribution for its and its affiliates' protections under the Asbestos Personal Injury Channeling Injunction and related provisions of the Plan. Following several months of good faith, arm's length negotiations, the parties agreed to the terms of a settlement now embodied in the Plan. See Anderson Decl. ¶ 14.

         13. In addition to the parties spending considerable time negotiating a settlement, including the principal terms of significant contributions by Meritor and Maremont to help fund the Asbestos Personal Injury Trust, the advisors to the ad hoc committee of firms representing personal injury claimants (the "Ad Hoc Committee") and the prepetition Future Claimants' Representative, personally and/or through their advisors, engaged in numerous discussions regarding the terms of potential settlements with Maremont and Meritor and conducted their own negotiations regarding the terms of the Asbestos Personal Injury Trust. Anderson Decl. ¶ 15. This included extensive negotiations regarding initial payment percentages and claim and distribution procedures for Holders of current Claims and future Demands. Following the initial negotiations between the Ad Hoc Committee and the prepetition Future Claimants' Representative regarding the terms of the Asbestos Personal Injury Trust Agreement and the TDP, counsel to the Debtors reviewed the proposed documents and further engaged in negotiations with the Ad Hoc Committee and the prepetition Future Claimants' Representative regarding the specific terms of the Asbestos Personal Injury Trust Agreement and the TDP. Id. During these negotiations, counsel to the Debtors sought to understand the rationale and basis for including certain provisions in the TDP. Id. Various revisions were made to the TDP as a result of negotiations among the Debtors, the Ad Hoc Committee and the prepetition Future Claimants' Representative. The Debtors' overall focus was to propose a Plan and Asbestos Personal Injury Trust in good faith that (i) would satisfy the requirements of the Bankruptcy Code, including sections 1129 and 524(g), (ii) included provisions intended to treat current and future claimants in substantially the same manner, and (iii) would be supported by the Ad Hoc Committee and prepetition Future Claimants' Representative, and accepted by Holders of Asbestos Personal Injury Claims. Id.

         E. Key Provisions of the Plan.

         1. The Asbestos Personal Injury Trust.

         14. The Plan establishes the Asbestos Personal Injury Trust under section 524(g) of the Bankruptcy Code. On the Effective Date, the Asbestos Personal Injury Trust will assume all liabilities and responsibility for all Asbestos Personal Injury Claims. Plan §§ VIII.E.2, VIII.E.8. The Asbestos Personal Injury Trust shall constitute a "qualified settlement fund" under section 468 of the Internal Revenue Code. Plan §§ I.A.I 1, VIII.E.2. The Asbestos Personal Injury Trust will be funded by the contribution of the Asbestos Personal Injury Trust Assets, which include: (a) the Maremont Contribution, which includes (i) all insurance proceeds and obligations owed to the Debtors, (ii) all Cash and cash equivalents held by the Debtors as of the Effective Date after giving effect to the Intercompany Loan Payment and the Settlement Payment, less the Effective Date Payment, the Reserve Funds, and the Effective Date Working Capital, and (iii) the Meritor Contribution (to the extent included in the Maremont Contributed Cash and described in (b) herein); (b) the cash portions of the Meritor Contribution, which includes (i) the Intercompany Loan Payment-pursuant to which Meritor owed Maremont approximately $20 million as of the Petition Date, and (ii) the Settlement Payment in Cash by Meritor to Maremont in the amount of $28 million; (c) all other assets, rights, and benefits assigned, transferred, or conveyed to the Asbestos Personal Injury Trust in connection with the Plan or any Plan Documents, including, without limitation, the Reorganized Maremont Stock; and (d) all proceeds of the foregoing. See Plan §§ IV.B.1, IV.B.2, IV.C, IV.E, IV.I.

         15. The Plan also contains an injunction that will channel all Asbestos Personal Injury Claims to the Asbestos Personal Injury Trust (as referenced and more fully defined in the Plan, the "Asbestos Personal Iniurv Channeling Injunction"). Plan § VIII.C. The injunction bars Holders of such Claims, Demands, and Causes of Action from taking any actions against the Protected Parties, which include the Debtors, the Reorganized Debtors, Meritor Related Parties, the Non-Debtor Affiliates, the Settling Insurers, which include Zurich, FFIC, Mt. McKinley, and Everest, and any Representative of the Debtors, the Reorganized Debtors, or any Representative of the foregoing parties, in each case that is not a Non-Indemnified Party. See Plan §§ LA. 126, IV.E. 11, VIII.C.

         16. The Asbestos Personal Injury Trust will use its assets and income to resolve Asbestos Personal Injury Claims in accordance with the Asbestos Personal Injury Trust Agreement (Plan, Ex. C) and the TDP (Plan, Ex. D) so that Holders of such Claims are treated fairly, equitably, and reasonably in light of the finite assets available to satisfy such Claims. Plan § IV.E.2.

         2. Releases by the Debtors.

         17. The Plan provides that the Debtors will release the Non-Estate Representative Released Parties from any all claims of, or on behalf of, the Debtors, whether direct, indirect, or derivative. See Plan §§ I.A.105, VIII.E. Specifically, on the Effective Date, the Debtors, the Reorganized Debtors, any entity seeking to exercise the rights of the Estates, and any successor to any Debtor or any Estate representative will release Meritor and the other Non-Debtor Affiliates, the Settling Insurers, solely in their capacity as such, any Representative of the foregoing entities, and any Meritor-Indemnified Representative. See Plan §§ I.A.105, VIII.E.

         3. Treatment of Claims Other than Asbestos Personal Injury Claims.

         18. Under the Plan, Holders of Allowed Priority Non-Tax Claims, Secured Claims, General Unsecured Claims, Environmental Claims, and Subsidiary Equity Interests will be paid in full. Plan § III.C. The Maremont Equity Interests will be cancelled, annulled, and extinguished. Plan § III.C.7. The Intercompany Claims shall be paid, adjusted, continued, settled, reinstated, canceled, discharged, or eliminated, in each case to the extent determined to be appropriate by the Debtors or the Reorganized Debtors, as applicable, or as otherwise provided in Section IV.B of the Plan. Plan § III.C.6.

         F. Jurisdiction; Venue; Core Proceeding (28 U.S.C. §§ 157, 1334(a), 1408 and 1409).

         19. The Bankruptcy Court and the United States District Court for the District of Delaware (the "District Court") have jurisdiction over this proceeding and the parties and property affected hereby pursuant to 28 U.S.C. § 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated February 29, 2012. Approval of the Disclosure Statement and confirmation of the Plan are core proceedings under 28 U.S.C. § 157(b)(2), and the Bankruptcy Court has jurisdiction (a) to approve the adequacy of information contained in the Disclosure Statement and to determine whether the Plan complies with the applicable provisions of the Bankruptcy Code and should be confirmed, and (b) to enter an order, consistent with Article III of the United States Constitution, with respect thereto, except to the extent section 524(g) of the Bankruptcy Code requires issuance or affirmance of the Confirmation Order by the District Court. Venue in this District was proper as of the Petition Date and remains proper pursuant to 28 U.S.C. §§ 1408 and 1409.

         G. Commencement and Joint Administration of the Chapter 11 Cases.

         20. On the Petition Date, the Debtors commenced the Chapter 11 Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On January 23, 2019, the Bankruptcy Court entered an order authorizing the joint administration and procedural consolidation of the Chapter 11 Cases in accordance with Bankruptcy Rule 1015(b) [Docket No. 26]. No. request for the appointment of a trustee or examiner has been made in the Chapter 11 Cases. On February 4, 2019, the U.S. Trustee appointed the Asbestos Claimants Committee.

         H. Judicial Notice.

         21. The Bankruptcy Court takes judicial notice of the docket of the Chapter 11 Cases maintained by the Clerk of the Bankruptcy Court, including, without limitation, all pleadings and other documents filed and orders entered thereon. The Bankruptcy Court also takes judicial notice of all evidence proffered or adduced and all arguments made at the hearings held before the Bankruptcy Court during the pendency of the Chapter 11 Cases.

         I. Burden of Proof.

         22. The Debtors, as proponents of the Plan, have met their burden of proving the applicable elements of sections 1129 and 524(g) of the Bankruptcy Code by a preponderance of the evidence, which is the applicable evidentiary standard for Confirmation.

         J. Objections Overruled.

         23. All parties have had a full and fair opportunity to be heard on all issues raised by objections to confirmation of the Plan. All unresolved objections, statements, informal objections, and reservations of rights, if any, related to the Solicitation, the Disclosure Statement, or the confirmation of the Plan, including any unresolved objection of the U.S. Trustee to the Plan, are OVERRULED on the merits.

         K. Adequacy of the Solicitation Procedures and Adequacy of the Information Contained in the Disclosure Statement (11 U.S.C. §§ 1125, 1126(b)).

         24. Sections 1125(g) and 1126(b) of the Bankruptcy Code apply to the solicitation of acceptances and rejections of the Plan prior to the commencement of a chapter 11 case. The Disclosure Statement contains "adequate information" as such term is defined in section 1125 of the Bankruptcy Code, thereby satisfying sections 1125 and 1126(b) of the Bankruptcy Code. Based upon the applicable Affidavits of Service and the Voting Declaration, votes for acceptance or rejection of the Original Plan were solicited and tabulated in good faith and the Solicitation was fair and complied with sections 1125 and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the Disclosure Statement, all other applicable provisions of the Bankruptcy Code and all other applicable rules, laws and regulations, including any applicable non-bankruptcy law.

         L. Transmittal and Mailing of Materials; Notice.

         25. As evidenced by the Affidavit of Service, the Combined Notice Affidavit, the Voting Declaration, and the other affidavits of service and mailing filed with the Bankruptcy Court prior to the Combined Hearing, the transmittal and service of the Plan, the Disclosure Statement, the Ballots, and the Combined Notice were adequate and sufficient under the circumstances, and all parties have been given due, proper, timely, and adequate notice, and an opportunity to appear and be heard with respect thereto. The Combined Notice informed Holders of Claims, Holders of Interests and other parties in interest that the Combined Hearing could be adjourned and informed them of how to access the electronic website maintained by the Solicitation Agent to obtain up-to-date information regarding the scheduling of the Combined Hearing and other relevant dates in the Chapter 11 Cases. Holders of Claims and Holders of Interests also had the ability to request that they be placed on the Debtors' Rule 2002 Service List. Accordingly, due and proper notice has been given with respect to the Combined Hearing and the deadlines and procedures for filing objections to the Disclosure Statement and confirmation of the Plan in accordance with the Scheduling Order, the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware (the "Local Rules").

         M. Plan Modifications.

         26. On March 12, 2019, the Debtors filed the Plan [Docket No. 136], containing certain non-material technical modifications as well as certain other modifications that are responsive to the UST Objection and informal comments from other parties (the "March 12 Plan Modifications"). The Debtors served notice of the filing of the Plan and the March 12 Plan Modifications with (a) a blackline comparison showing the non-material and technical changes made to the Original Plan mailed as part of the Solicitation Package and filed on the Petition Date on the Rule 2002 Service List, and (b) a fully-conformed clean version of the Plan reflecting the Plan Supplement and the Plan Modifications. The Debtors filed further modifications to the Plan on March 17, 2019 [Docket No. 155], May 14, 2019 [Docket No. 222], and May 17, 2019 [Docket No. __] (together with the March 12 Plan Modifications, the "Plan Modifications"), and served notice of the filing of these modifications on the Rule 2002 Service List. A fully-conformed version of the Plan is attached hereto as Exhibit A. Adequate and sufficient notice of the Plan Modifications has been given, and, pursuant to section 1127 of the Bankruptcy Code and in accordance with Bankruptcy Rule 3019, no other further notice, disclosure under section 1125 of the Bankruptcy Code, or re-solicitation of votes on the Plan is required, as the Plan Modifications do not materially adversely affect the treatment of any Claims against or Interests in the Debtors under the Plan.

         N. The Plan's and the Debtors' Compliance with the Bankruptcy Code.

         1. Plan Compliance with the Applicable Provisions of the Bankruptcy Code (11 U.S.C. § 1129(a)(1)).

         27. The Plan has complied, and the Debtors have complied, with all applicable provisions of section 1129 of the Bankruptcy Code.

         (a) Proper Classification of Claims and Equity Interests (11 U.S.C. §§ 1122 and 1123(a)(1)).

         28. The classification of Claims and Interests under the Plan is proper under the Bankruptcy Code. Article III of the Plan designates Classes of Claims and Interests, other than Administrative Expense Claims (see Plan § HA), including Professional Fee Claims (see Plan § II.B), and Priority Tax Claims (see Plan § II.C), which, pursuant to section 1123(a)(1) of the Bankruptcy Code, need not be classified. The Plan designates six Classes of Claims against the Debtors and two Classes of Interests in the Debtors. See Plan § III.B. As required by section 1122(a) of the Bankruptcy Code, each Class of Claims and Interests contains only Claims or Interests that are substantially similar to the other Claims or Interests within such Class. Valid business, factual and legal reasons exist for separately classifying the various Classes of Claims and Interests created under the Plan, the classifications were not promulgated for any improper purpose and such Classes do not unfairly discriminate between or among Holders of Claims or Interests. The Plan therefore satisfies sections 1122 and 1123(a)(1) of the Bankruptcy Code.

         (b) Specification of Unimpaired Classes (11 U.S.C. § 1123(a)(2)).

         29. The Plan specifies that Classes 1, 2, 3, 5 and 8 are Unimpaired within the meaning of section 1124 of the Bankruptcy Code, thereby satisfying section 1123(a)(2) of the Bankruptcy Code. Plan § III.C. Holders of Claims in Class 6 are either conclusively deemed to have accepted or rejected the Plan as to be determined by the Debtors or the Reorganized Debtors, as applicable, and as a result are either Unimpaired or Impaired. See Plan § III.C.6.

         (c) Specification of Treatment of Impaired Classes (11 U.S.C. § 1123(a)(3)).

         30. The Plan designates each of Classes 4, 6 (to the extent Impaired), and 7 as Impaired within the meaning of section 1124 of the Bankruptcy Code and specifies the treatment of Claims and Interests in those Classes, thereby satisfying section 1123(a)(3) of the Bankruptcy Code. See Plan § III.C.

         (d) No. Discrimination (11 U.S.C. § 1123(a)(4)).

         31. The Plan provides for the equivalent treatment by the Debtors for each Claim or Interest in a particular Class, unless a Holder of a particular Claim or Interest has agreed to less favorable treatment, which satisfies section 1123(a)(4) of the Bankruptcy Code. See Plan § III.C.

         (e) Implementation of Plan (11 U.S.C. § 1123(a)(5)).

         32. The Plan and the Plan Supplement provide adequate and proper means for implementation of the Plan, thereby satisfying section 1123(a)(5) of the Bankruptcy Code, including without limitation, (i) the good-faith compromise and settlement of all Claims, Interests, and controversies resolved pursuant to the Plan (Plan § IV.A); (ii) the continued corporate existence of the Debtors on and after the Effective Date (the "Reorganized Debtors") and the vesting of the property of the Debtors' Estates in the Reorganized Debtors (Plan § IV.I); (iii) all actions set forth in Article IV of the Plan; (iv) the adoption of the corporate documents that will govern the Reorganized Debtors (Plan §§ IV.K-L); (v) the sole director and officer of Reorganized Maremont and the Reorganized Subsidiaries (Plan § IV.M); (vi) the vesting of authority in the Reorganized Debtors and their officers and directors to issue, execute, deliver, file, or records such agreements, instruments, releases, and other documents, and to take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan and the Restructuring Transactions (Plan § IV.K); (vii) the various discharges, releases, injunctions, indemnifications, and exculpation provided under the Plan, including those set forth in Section IV.B and Article VIII of the Plan; (viii) the assumption, assumption and assignment, or rejection of Executory Contracts, including the assumption of Environmental Claims by Arvin Environmental Management, LLC ("Arvin Environmental") pursuant to the Environmental Assumption and Indemnification Agreement (Plan §§ IV.F, V); (ix)the cancellation of the outstanding shares of Maremont common stock and the issuance of the Reorganized Maremont Stock (Plan §§ IV.C, IV.I); (x) the making of the Meritor Contribution and the Maremont Contribution (Plan § IV.B); (xi) the contribution of the Intercompany Receivables to Maremont and then from Maremont to each of AVM, FRCOC, and MEP (Plan § IV.G); (xii) the compromise and settlement of each of the FFIC Agreement, the Zurich Agreement, and the Everest Agreement (Plan § IV.D); (xiii) the funding of the Reserve Funds for the Effective Date Payments and the payment of other legal fees and expenses (Plan § IV.G); and (xiv) the creation of the Asbestos Personal Injury Trust, the transfer of the Asbestos Personal Injury Trust Assets to the Asbestos Personal Injury Trust, the assumption of liabilities and responsibility for Asbestos Personal Injury Claims by the Asbestos Personal Injury Trust, the appointment of the Asbestos Personal Injury Trustee, the members of the Asbestos Personal Injury Trust Advisory Committee and the Post-Effective Date Future Claimants' Representative, and the resolution of Asbestos Personal Injury Claims in accordance with the Asbestos Personal Injury Trust Agreement and the TDP. Plan § rV.E. The Plan therefore satisfies the requirements of section 1123(a)(5) of the Bankruptcy Code.

         (f) Non-Voting Equity Securities (11 U.S.C. § 1123(a)(6)).

         33. In accordance with section 1123(a)(6) of the Bankruptcy Code, Reorganized Maremont's Certificate of Incorporation prohibits the issuance of non-voting equity securities. See Plan Ex. L. After the Effective Date, the Reorganized Debtors may amend and restate Reorganized Maremont's Bylaws, Certificate of Incorporation, or similar governing documents, as applicable, as permitted by applicable non-bankruptcy law. See Plan Ex. K.

         (g) Selection of Officers and Directors (11 U.S.C. § 1123(a)(7)).

         34. On the Effective Date, the Debtors' officers and directors will be removed except for Sherman K. Edmiston III, a current director of Debtor Maremont, who was identified in the Plan Supplement as the proposed sole director and officer of each of the Reorganized Debtors. Plan Supplement Ex. M; Plan Ex. M. Mr. Edmiston has been selected with the participation of the Asbestos Claimants Committee and the Future Claimants' Representative, given that the Asbestos Personal Injury Trust will own 100% of the equity in Reorganized Maremont (Anderson Decl. ¶ 40; Patton Decl. ¶ 25).

         35. Section 1123(a)(7) of the Bankruptcy Code does not apply to the selection of the Asbestos Personal Injury Trust Advisory Committee and the Asbestos Personal Injury Trustee. Mr. Alan Rich will serve as the initial Asbestos Personal Injury Trustee. Plan Ex. I. Notwithstanding the foregoing, the Plan also provides for the nomination of five individuals to serve as the initial members of the Asbestos Personal Injury Trust Advisory Committee, with their appointment effective pursuant to this Order. Plan § IV.E.6, Ex. I. The initial members will be Beth Gori, Perry Browder, Armand J. Volta, Jr., John D. Cooney, and Marcus E. Raichle, Jr. Successor members will be appointed as provided in the Asbestos Personal Injury Trust Agreement. Plan § IV.E.6, Ex. C. In addition, Section IV.E.4 of the Plan provides for the nomination and appointment of the initial Asbestos Personal Injury Trustee, who will be Alan B. Rich, Esq. Plan § IV.E.4, Ex. I. Any subsequent trustees will also be appointed in accordance with the terms of the Asbestos Personal Injury Trust Agreement. Plan § IV.E.4, Ex. C. Mr. Patton, who has served as the Future Claimants' Representative prior to, and in these Chapter 11 Cases, will continue to serve as the Post-Effective Date Future Claimants' Representative post-Confirmation, pursuant to the terms of the Asbestos Personal Injury Trust Agreement. Plan § IV.E.5, Ex. C. Such provisions are consistent with the interests of creditors, equity security holders, and public policy. The Plan therefore satisfies the requirements of section 1123(a)(7) of the Bankruptcy Code.

         (h) No. Debtor Is an Individual (11 U.S.C. §§ 1123(a)(8), 1123(c)).

         36. None of the Debtors is an individual. Accordingly, sections 1123 (a)(8) and 1123 (c) of the Bankruptcy Code are not applicable to the Plan.

         (i) Discretionary Contents of the Plan (11 U.S.C. § 1123(b)).

         37. The other provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code. The Plan therefore satisfies the requirements of section 1123(b) of the Bankruptcy Code.

         (i) Impairment or Unimpairment of Classes of Claims and Interests (11 U.S.C. § 1123(b)(1)).

         38. The Plan specifies that (a) Class 1 (Priority Non-Tax Claims), Class 2 (Secured Claims), Class 3 (General Unsecured Claims), Class 5 (Environmental Claims), and Class 8 (Subsidiary Equity Interests) are Unimpaired, (b) Class 4 (Asbestos Personal Injury Claims) and Class 7 (Maremont Equity Interests) are Impaired, and (c) Class 6 (Intercompany Claims) is Impaired or Unimpaired as determined by the Debtors or Reorganized Debtors, as applicable. Plan §§ III.B-C. The Plan therefore is consistent with section 1123(b)(1).

         (ii) Assumption and Rejection of Executory Contracts and Unexpired Leases (11 U.S.C. § 1123(b)(2)).

         39. Article V of the Plan governs the assumption or rejection of Executory Contracts that were not otherwise rejected, or subject to rejection, pursuant to an order of the Bankruptcy Court. On the Effective Date, all Executory Contracts shall be rejected by the applicable Debtor in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code, unless any such Executory Contract: (a) is listed on the Assumed Executory Contract and Unexpired Lease List (see Plan Ex. J); or (b) has been specifically addressed pursuant to an order of the Bankruptcy Court that becomes a Final Order on or before the Effective Date. On the Effective Date, except as otherwise provided in the Plan, entry of this Order shall constitute an order of this Court approving the assumption or the assumption and assignment of the Executory Contracts listed on the Assumed Executory Contract and Unexpired Lease List, in accordance with, and subject to, the requirements of sections 365 and 1123 of the Bankruptcy Code.

         40. On or as soon as reasonably practicable after the Effective Date, any monetary amounts by which each Executory Contract on the Assumed Executory Contract and Unexpired Lease List may be in default shall be satisfied in full by the payment of the proposed cure amount, if any, listed on the Assumed Executory Contract and Unexpired Lease List. There have been no objections to the Debtors' assumption of the Executory Contracts, to the Debtors' representation that no cure amounts are due with respect to any Executory Contract to which the Debtors are a party, or that the Debtors have provided adequate assurance of future performance of the Executory Contracts to be assumed or assumed and assigned. See Anderson Decl. ¶ 32.

         41. The Debtors have exercised sound business judgment in determining to reject all Executory Contracts, except those listed on Exhibit J to the Plan or otherwise addressed pursuant to an order of this Court, pursuant to sections 365 and 1123(b)(2) of the Bankruptcy Code and Article V of the Plan. The rejection of these Executory Contracts pursuant to the Plan is beneficial and necessary to the Debtors' and Reorganized Debtors' operations upon and subsequent emergence from chapter 11, and is in the best interests of the Debtors, their Estates, and their creditors. In addition, the Debtors have exercised sound business judgment in determining to assume or assume and assign the Executory Contracts listed on Exhibit J to the Plan. The assumption or assumption and assignment of such Executory Contracts pursuant to the Plan is beneficial and necessary to the Debtors' and Reorganized Debtors' operations upon and subsequent emergence from chapter 11, and is in the best interests of the Debtors, their Estates, and their creditors.

         42. In addition, the assumption by the Reorganized Debtors and the Asbestos Personal Injury Trust of indemnification obligations pursuant to the Asbestos Claims Indemnification Agreement (Plan Ex. A) and the survival of the Debtors' indemnification obligations to certain Representatives of the Debtors and the Non-Debtor Affiliates post-emergence is of fundamental importance to the Debtors' reorganization process, is a sound exercise of the Debtors' business judgment, and is in the best interests of the Debtors, their estates, and their creditors.

         (iii) Settlement and Preservation of Claims and Causes of Action (11 U.S.C. § 1123(b)(3)).

         43. In accordance with section 1123(b) of the Bankruptcy Code, and except where such Causes of Action have been expressly released (including, for the avoidance of doubt, pursuant to the Debtor Release), the Reorganized Debtors shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action in their favor, whether arising before or after the Petition Date, and the Reorganized Debtors' rights to commence, prosecute or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. Plan § rV.P. The Reorganized Debtors may pursue such Causes of Action, as appropriate, in accordance with the best interest of the Reorganized Debtors. No. Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement or the Disclosure Statement to any Cause of Action against them as an indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action. Except with respect to Causes of Action as to which the Debtors or Reorganized Debtors have expressly released any Person or Entity on or prior to the Effective Date (pursuant to the Debtor Release or otherwise), the Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan. Unless any Causes of Action against an Entity are expressly waived, relinquished, exculpated, released, compromised or settled in the Plan, this Order, or a Bankruptcy Court order, the Reorganized Debtors expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches, shall apply to such Causes of Action upon, after or as a consequence of the Confirmation or Consummation of the Plan.

         44. With the exception of those claims released by the Debtors pursuant to Section VIII.E of the Plan, on the Effective Date all claims, defenses, rights and Causes of Action of the Debtors and of the Reorganized Debtors relating to Asbestos Personal Injury Claims shall be transferred and assigned to the Asbestos Personal Injury Trust. Plan § IV.E.8. In accordance with section 1123(b) of the Bankruptcy Code, the Asbestos Personal Injury Trust shall retain and may enforce such claims, defenses, rights, and Causes of Action and shall retain and may enforce all defenses and counterclaims to all Claims or Demands asserted against the Asbestos Personal Injury Trust, including, but not limited to, setoff, recoupment, and any rights under section 502(d) of the Bankruptcy Code; provided, however, that no such claims, defenses, Causes of Action, or counterclaims may be asserted against any Protected Party. Id. The Asbestos Personal Injury Trust shall be deemed to be the appointed representative of the Debtors and the Reorganized Debtors and may pursue, litigate, compromise, and settle any rights, claims, or Causes of Action transferred to it, as appropriate. Id

         (iv) Modification of Rights (11 U.S.C. § 1123(b)(5)).

         45. In accordance with section 1123(b)(5) of the Bankruptcy Code, Article III of the Plan modifies or leaves unaffected, as the case may be, the rights of Holders of Claims or Interests in each Class.

         (v) Additional Plan Provisions (11 U.S.C. § 1123(b)(6)).

         46. In accordance with section 1123(b)(6) of the Bankruptcy Code, the Plan includes additional appropriate provisions, including the retention of jurisdiction of the Bankruptcy Court and District Court and certain release, injunction, exculpation, and discharge provisions, that are not inconsistent with applicable provisions of the Bankruptcy Code.

         (vi) Cure of Defaults (11 U.S.C. § 1123(d)).

         47. In accordance with section 1123(d) of the Bankruptcy Code, Section V.B of the Plan provides for the satisfaction of any cure amounts associated with any Executory Contracts to be assumed pursuant to the Plan in accordance with section 365(b)(1) of the Bankruptcy Code. The Debtors are not in default under any Executory Contract assumed pursuant to the Plan and accordingly, no cure amounts are required to be paid to any party to such Executory Contract, unless otherwise determined by this Court or through mutual agreement by the parties to such Executory Contract prior to the Effective Date. Anderson Decl. ¶ 31.

         2. Debtors' Compliance with the Applicable Provisions of the Bankruptcy Code (11 U.S.C. § 1129(a)(2)).

         48. The Debtors have complied in good faith with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy Code. Specifically: (a) the Debtors are eligible to be debtors under section 109 of the Bankruptcy Code and are proper proponents of the Plan under section 1121(a) of the Bankruptcy Code; and (b) except as otherwise provided or permitted by orders of this Court, the Debtors have complied with the applicable provisions of the Bankruptcy Code, including sections 1125 and 1126(b), the Bankruptcy Rules, the Local Rules, and applicable non-bankruptcy rules and regulations and the Scheduling Order in transmitting the Solicitation Package and in soliciting and tabulating votes to accept or reject the Plan. The Debtors complied with applicable provisions of the Bankruptcy Code in transmitting the Combined Notice and otherwise satisfied section 1129(a)(2) of the Bankruptcy Code.

         3. Plan Proposed in Good Faith (11 U.S.C. § 1129(a)(3)).

         49. The Debtors filed the Chapter 11 Cases and have proposed the Plan (and all documents necessary to effectuate the Plan) in good faith. The Chapter 11 Cases were filed and the Plan was proposed with the legitimate purpose of providing a fair and equitable resolution of the Debtors' Asbestos Personal Injury Claims and maximizing the returns available to creditors and other parties in interest. The Plan allows the Debtors to do this by channeling their Asbestos Personal Injury Claims to the Asbestos Personal Injury Trust and assigning their Environmental Claims to an affiliate of their ultimate parent, Meritor. Anderson Decl. ¶ 33. The Debtors' good faith is evident from the facts and record of the Chapter 11 Cases, the Disclosure Statement, the record of the Combined Hearing, and other proceedings held in the Chapter 11 Cases. The record demonstrates that the Debtors engaged in extensive good-faith, arm's length negotiations with Meritor, the Ad Hoc Committee, and the prepetition Future Claimants' Representative, which led to the Plan's formulation. In the negotiations, the Debtors sought to reach a fair and equitable global resolution of their Asbestos Personal Injury Claims, including future Demands. Id. ¶ 34. Further, the exposure and medical criteria, (TDP § 5.3(a)(3)), confidentiality provision, (TDP § 6.5), and audit provision (TDP § 5.8), set forth in the TDP are fair and equitable to Holders of all Asbestos Personal Injury Claims, including Future Demand Holders. The Plan and the contracts, instruments, agreements, and documents necessary and related to implementing, effectuating, and consummating the Plan, including all exhibits to the Plan - including the Asbestos Personal Injury Trust Documents - along with the Plan's classification, indemnification, release, injunction, and exculpation provisions, were the product of lengthy and hard-fought negotiations among the parties, and reflect the global compromise of numerous complex and interdependent issues. Anderson Decl. ¶ 34; Patton Decl. ¶ 10. Such exhibits and provisions are consistent with sections 105, 524(g), 1122, 1123(b)(3)(A), 1123(b)(6), 1129, and 1142 of the Bankruptcy Code and applicable law in this Circuit and are each necessary for the Debtors' successful reorganization and permanent resolution of their Asbestos Personal Injury Claims, including future Demands. In determining that the Plan satisfies section 1129(a)(3) of the Bankruptcy Code, the Bankruptcy Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases, the Plan itself, and the process leading to Confirmation. The Plan therefore satisfies the requirements of section 1129(a)(3) of the Bankruptcy Code.

         4. Payments for Services or Costs and Expenses (11 U.S.C. § 1129(a)(4)).

         50. Except as otherwise provided or permitted by the Plan or other orders of the Bankruptcy Court, the payments for services or costs and expenses in or in connection with the Chapter 11 Cases, or in connection with the Plan and incidental to the Chapter 11 Cases, in each case incurred prior to the Effective Date, including Professional Fee Claims asserted by Retained Professionals that have been or will be paid by the Debtors, have been, hereby are, or will be, authorized by order of the Bankruptcy Court or are otherwise permitted under the Bankruptcy Code. The Plan therefore satisfies the requirements of section 1129(a)(4) of the Bankruptcy Code.

         5. Directors, Officers, and Insiders (11 U.S.C. § 1129(a)(5)).

         51. In compliance with section 1 l29(a)(5)(A)(i) of the Bankruptcy Code, the Debtors have disclosed the identity and affiliations of the initial sole director and officer of the Reorganized Debtors, Sherman K. Edmiston III, in Exhibit M to the Plan that was filed with the Plan Supplement. Plan Ex. M. Mr. Edmiston is one of the current directors of Debtor Maremont. Plan Ex. M; Anderson Decl. ¶ 35. Accordingly, the Debtors have satisfied the requirements of section 1 l29(a)(5)(A)(i) of the Bankruptcy Code. The proposed sole director and officer of Reorganized Maremont and each of the Reorganized Subsidiaries was selected with the approval of the Asbestos Claimants Committee and the Future Claimants' Representative, who have each determined that having Mr. Edmiston continue as the sole director and officer of the Reorganized Debtors will benefit the Holders of Claims and Interests. Patton Decl. ¶ 19. The continuation in office of the proposed sole director and officer of each of the Reorganized Debtors will allow the Reorganized Debtors to benefit from the director's familiarity with the Debtors' reorganization and business going forward, which is consistent with the interests of Holders of Claims and Interests and with public policy. The Plan therefore satisfies the requirements of section 1129(a)(5) of the Bankruptcy Code.

         6. Inapplicability of Section 1129(a)(6).

         52. The Plan does not provide for any change in rates subject to the jurisdiction of any governmental regulatory commission and will not require governmental regulatory approval. Accordingly, section 1129(a)(6) of the Bankruptcy Code does not apply to the Plan.

         7. Best Interests of Creditors Test (11 U.S.C. § 1129(a)(7)).

         53. The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The liquidation analysis set forth in Section DCD of the Disclosure Statement and other evidence proffered or adduced in the Anderson Declaration and at the Combined Hearing: (i) are reasonable, persuasive and credible as of the dates such analysis or evidence was prepared, presented, or proffered; (ii) utilize reasonable and appropriate methodologies and assumptions; (iii) have not been controverted by other evidence or challenged; and (iv) establish that each Holder of a Claim or Interest in an Impaired Class either has accepted the Plan or would not receive or retain property of greater value if the Debtors were liquidated under chapter 7 of the Bankruptcy Code.

         54. Two Classes of Claims or Interests (other than Intercompany Claims) are Impaired under the Plan: Class 4 (the Voting Class) and Class 7 (Maremont Equity Interests). Holders in the Voting Class who voted on the Plan voted unanimously to accept the Plan, thereby satisfying section 1129(a)(7). With respect to Class 7, the requirement of section 1129(a)(7) is also satisfied because the Holders of Maremont Equity Interests would receive no distribution if Maremont were ...


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