IMERYS TALC AMERICA: Files Chapter 11 Plan, Launches Sale Process

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On May 15, 2020, the North American Talc Subsidiaries of Imerys (Imerys Talc America, Imerys Talc Vermont, Imerys Talc Canada), along with Imerys SA (“the Group”) and Imerys Talc Italy SpA, filed a joint Plan of Reorganization and related disclosure statement in the United States Bankruptcy Court for the District of Delaware as part of the chapter 11 bankruptcy cases initiated on Feb. 13, 2019. The Plan outlines a proposed path forward to emerge from chapter 11 having addressed historic talc-related liabilities.

The North American Talc Subsidiaries believe that the Plan provides a favorable solution for all stakeholders, including representatives of current and future claimants in talc-related litigation, while effectively defining a path forward for the impacted talc businesses. The Plan provides that if the necessary approvals are obtained, the Talc Subsidiaries will emerge from the chapter 11 process and the Group will be released from all existing and future talc-related liabilities arising out of the Talc Subsidiaries’ past operations, as such liabilities will be channeled into a dedicated trust.

Concurrent with the filing, the North American Talc Subsidiaries are initiating a sale process for substantially all of their assets under Section 363 of the U.S. Bankruptcy Code. The North American Talc Subsidiaries are not seeking to liquidate their assets, but anticipate pursuing a sale as a going concern. No stalking horse bidder has been identified. Imerys SA is entitled to participate as a bidder in any sale process, but will not serve as a stalking horse. Pursuant to the terms of the proposed Plan, all undisputed claims of suppliers against the filing entities are expected to be paid in full.

Subject to approval of the Plan by the requisite number of talc claimants, Imerys Talc Italy intends to file for voluntary chapter 11 protection in order to benefit from the same global and permanent protections of historic talc-related liabilities as the North American Talc Subsidiaries.

The Filing Companies are targeting confirmation of the Plan in October of this year and emergence from chapter 11 protection before the end of 2020.

Giorgio La Motta, President, Imerys Talc America, Imerys Talc Vermont, and Imerys Talc Canada, commented, “This is a significant step in the North American Talc Subsidiaries’ path towards emergence from chapter 11. The Plan represents a favorable outcome for the North American Talc Subsidiaries’ stakeholders and will enable us to move forward free of historic talc-related liabilities.”

Representatives appointed by the bankruptcy court to represent the existing and future potential talc-related claimants have agreed to the terms of the Plan, and will be preparing a letter to accompany the solicitation documents indicating their support of the Plan, and advocating for the support from those entitled to vote on the Plan. A hearing to consider approval of the Disclosure Statement is scheduled with the Court for June 30, 2020. Following Court approval of the Disclosure Statement, the Filing Companies will distribute the Plan and Disclosure Statement to voting creditors for their consideration.

About Imerys Talc America

Imerys Talc and its subsidiaries are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants,and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia.

Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019.

The Debtors estimated $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing.

The Hon. Laurie Selber Silverstein is the case judge.

The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent.

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