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IMERYS TALC: Unsecured Creditors to Be Paid in Full in Plan

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Debtors Imerys Talc America, Inc. (ITA), Imerys Talc Vermont, Inc. (ITV), and Imerys Talc Canada Inc. (ITC) filed with the U.S. Bankruptcy Court for the District of Delaware a Joint Chapter 11 Plan of Reorganization and a Disclosure Statement on May 15, 2020.

The contemplated filing of Imerys Talc Italy S.p.A. (ITI) is designed to address the Talc Personal Injury Claims against ITI, and ITI’s filing is contingent upon acceptance of the Plan by the holders of such Claims. As a result, certain holders of Claims against ITI are being solicited through this Disclosure Statement to vote on the Plan prior to ITI’s contemplated chapter 11 filing.

In developing the Plan, the Debtors engaged in good-faith, arms’-length negotiations with Imerys S.A., the Tort Claimants’ Committee, and the FCR. The Debtors are pleased to report that, subject to the terms of the letters accompanying this Disclosure Statement, both the Tort Claimants’ Committee and the FCR support the Plan and are Plan Proponents.

The North American Debtors commenced their Chapter 11 Cases in order to manage the significant potential liabilities arising from claims by plaintiffs alleging personal injuries caused by exposure to talc mined, processed and/or distributed by one or more of the North American Debtors. As of the Petition Date, one or more of the North American Debtors had been sued by approximately 14,650 claimants seeking damages for personal injuries allegedly caused by exposure to the North American Debtors’ talc products, with the vast majority of such claims (approximately 98.6%) based on alleged exposure to cosmetic talc products.

A Talc Personal Injury Trust will be established and assume all Talc Personal Injury Claims. The Talc Personal Injury Trust will be funded with the Talc Personal Injury Trust Assets in order to resolve Talc Personal Injury Claims in accordance with the Talc Personal Injury Trust Documents. The Plan also contemplates a section 363 sale process, by which the assets of the North American Debtors will be marketed to third parties pursuant to a court-approved sale process. The net proceeds from the Sale will be used to fund the Talc Personal Injury Trust.

To resolve the Debtors’ Talc Personal Injury Claims the Plan incorporates a global settlement between the Plan Proponents. The Plan contemplates the establishment of a Talc Personal Injury Trust that will assume all Talc Personal Injury Claims and resolve Talc Personal Injury Claims in accordance with the Talc Personal Injury Trust Documents.

Class 3a Unsecured Claims Against the North American Debtors will each be paid the allowed amount of its unsecured claim. Such payment will be (i) in full, in Cash, plus post-petition interest at the federal judgment rate in effect on the Petition Date, or (ii) upon such other less favorable terms as may be mutually agreed upon between the holder of the Unsecured Claim and the applicable North American Debtor or Reorganized North American Debtor.

Class 3b Unsecured Claims Against ITI are unaltered by the Plan. Except to the extent that a holder of an Unsecured Claim against ITI agrees to a different treatment, on and after the Effective Date, Reorganized ITI will continue to pay or dispute each Unsecured Claim in the ordinary course of business in accordance with applicable law.

Class 4 Talc Personal Injury Claims will be channeled to and assumed by the Talc Personal Injury Trust without further act or deed and shall be resolved in accordance with the terms and procedures of the Talc Personal Injury Trust and the Trust Distribution Procedures. Pursuant to the Plan and the Trust Distribution Procedures, each holder of a Talc Personal Injury Claim shall have its Claim permanently channeled to the Talc Personal Injury Trust, and such Claim shall thereafter be asserted exclusively against the Talc Personal Injury Trust and resolved and paid by the Talc Personal Injury Trust in accordance with the Trust Distribution Procedures.

Class 6 Equity Interests in the North American Debtors will be canceled, annulled, and extinguished.

Class 7 Equity Interests in ITI will be reinstated and the legal, equitable, and contractual rights to which holders of Equity Interests in ITI are entitled shall remain unaltered to the extent necessary to implement the Plan.

All Cash consideration necessary for payments or distributions on account of the North American Debtor Claims shall be obtained from (i) the Cash on hand of the North American Debtors on the Effective Date, including Cash derived from business operations and (ii) the Imerys Cash Contribution.

Imerys S.A. has agreed to make, or cause the Imerys Contribution to be made in exchange for the releases and channeling injunction benefiting the Imerys Protected Parties as contemplated pursuant to the Plan. The Imerys Contribution includes (i) the Imerys Settlement Funds, (ii) the Imerys Cash Contribution, (iii) the Talc Trust Contribution, and (iv) the Additional Contribution.

A full-text copy of the disclosure statement dated May 15, 2020, is available at https://tinyurl.com/y83ndv8a from PacerMonitor at no charge.

Counsel for Debtors:

RICHARDS, LAYTON & FINGER, P.A.
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Amanda R. Steele, Esq.
Brett M. Haywood, Esq.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701

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LATHAM & WATKINS LLP
Jeffrey E. Bjork, Esq.
Kimberly A. Posin, Esq.
Helena G. Tseregounis, Esq.
Shawn P. Hansen, Esq.
355 South Grand Avenue, Suite 100
Los Angeles, California 90071-1560
Telephone: (213) 485-1234
Facsimile: (213) 891-8763

– and –

Richard A. Levy, Esq.
330 North Wabash Avenue, Suite 2800
Chicago, Illinois 60611
Telephone: (312) 876-7700
Facsimile: (312) 993-9767

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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