Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 1 of 12 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA Charlotte Division IN RE: Case No. 10-BK-31607 GARLOCK SEALING TECHNOLOGIES LLC, et al., Chapter 11 Debtors. 1 Jointly Administered MOTION FOR ENTRY OF AN ORDER APPROVING SOLICITATION AND CONFIRMATION PROCEDURES AND SCHEDULE FOR CONFIRMATION OF THE JOINT PLAN Garlock Sealing Technologies LLC (“Garlock”), Garrison Litigation Management Group, Ltd. (“Garrison”), The Anchor Packing Company (“Anchor”), Coltec Industries Inc. (“Coltec”), the Official Committee of Asbestos Personal Injury Claimants (the “Committee”), the Future Asbestos Claimants’ Representative (the “FCR”), the Ad Hoc Coltec Future Asbestos Claimants’ Representative, and the Ad Hoc Coltec Asbestos Claimants Committee (together all the aforementioned parties, the “Plan Proponents”), are proponents of the Joint Plan of Reorganization of Garlock Sealing Technologies LLC, et al. and OldCo, LLC dated May 20, 2016 (as it may be from time to time amended, supplemented or modified, the “Plan”). OldCo, LLC is the proposed successor by merger to Coltec Industries Inc. “Coltec” refers to Coltec Industries Inc before the proposed merger with OldCo, LLC and to OldCo, LLC thereafter. Debtors file this motion (the “Motion”) seeking entry of an order (i) establishing procedures for solicitation and tabulation of votes to accept or reject the Plan, (ii) approving 1 The debtors in these jointly administered cases are Garlock Sealing Technologies LLC; Garrison Litigation Management Group, Ltd.; and The Anchor Packing Company. 1 Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 2 of 12 forms of Ballots; (iii) approving the form and content of notice, and the manner of giving notice; and (iv) establishing dates and deadlines in connection with confirmation of the Plan.2 Although Coltec is not currently a debtor, the Plan would resolve Coltec Asbestos Claims contemporaneously with GST Asbestos Claims. Pursuant to Sections 1125(g) and 1126(b) of the Bankruptcy Code, if the Court grants this Motion, Coltec will follow the same procedures to solicit acceptance of the Plan by Coltec Asbestos Claimants before Coltec commences a chapter 11 bankruptcy case. In support of this Motion, Debtors respectfully show the Court as follows: I. The Comprehensive Settlement and the Joint Plan 1. On March 17, 2016, Garlock, Coltec, the Committee, and the FCR, along with the other Plan Proponents, reached a comprehensive settlement that would provide broad-based and permanent relief from Asbestos Claims for the Debtors, Coltec, affiliates and other Asbestos Protected Parties (the “Comprehensive Settlement”). Nearly contemporaneously with the filing of this Motion, to implement the Comprehensive Settlement, the Plan Proponents filed the Plan and moved for approval of a Disclosure Statement. This Motion also implements the Comprehensive Settlement. 2. Details of the Plan are outlined in the Plan itself as well as in the Disclosure Statement. For purposes of this Motion, it is important to emphasize some key differences in the nature of the relief sought by the Plan Proponents in the Plan compared to the relief sought in the previous plan proposed by Debtors—the Second Amended Plan of Reorganization (“Second Amended Plan”). 2 All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan. 2 Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 3 of 12 3. First, the Plan is a joint plan supported by the representatives of all of the key constituents in these cases, including, specifically Debtors, Coltec, the FCR, and the Committee. The Comprehensive Settlement and Plan are the product of six years of litigation and seek to implement a consensual, successful reorganization pursuant to Section 524(g) of the Bankruptcy Code. 4. Second, the Plan proposes that Garlock’s parent, Coltec, will, along with the now- filed Debtors, file its own petition for relief under Chapter 11. Historically, Coltec was sued alongside Garlock in tens of thousands of asbestos related personal injury cases. Suits against Coltec primarily asserted that asbestos from asbestos-containing component parts in engines and pumps caused asbestos-related disease. Such suits often asserted that asbestos-related disease was caused by exposure to asbestos-containing gaskets and packing manufactured by Garlock. 5. The Comprehensive Settlement provides that Coltec will solicit acceptance of the Plan with respect to Coltec Asbestos Claimants as a “pre-packaged” plan prior to Coltec’s commencement of a Chapter 11 case assuming the Plan is accepted by the requisite number of Claimants. In such event, Debtors and Coltec will move the Court to jointly administer the Coltec case with these cases. 6. If the Court confirms the Plan, Debtors and Coltec also will be discharged of further legal responsibility for GST Asbestos Claims and Coltec Asbestos Claims to the fullest extent permitted by law. The District Court also will be called upon to issue an injunction pursuant to Section 524(g) channeling Asbestos Claims to a $480 million trust for processing and resolution and permanently enjoining the Holders of those Claims from pursuing other remedies against the Debtors, Coltec, their affiliates, and other Asbestos Protected Parties. 3 Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 4 of 12 7. The trust will process and resolve Asbestos Claims in accordance with Claims Resolution Procedures agreed to by claimants’ representatives as part of the Comprehensive Settlement. Administration of the trust will be overseen by a trustee, Louis R. Sifford, who has been jointly nominated by the claimants’ representatives. 8. Third, by contrast to the Second Amended Plan, with this Plan there are no disputes about whether and to what extent Asbestos Claimants or their representatives may vote to accept or reject the Plan. All Asbestos Claimants have been classified into a single class, Class 5. The FCR supports the Plan but the Plan does not require the FCR, on behalf of future Asbestos Claimants, to register his support by casting a ballot. The Plan Proponents agree that two classes of creditors, Class 5 Asbestos Claimants and Class 9 GST/Garrison Equity Interests, are the only two classes of creditors or interest holders that are impaired by the Plan and thus entitled to vote whether to accept or reject the Plan. II. This Motion Seeks for the Court to Approve Substantially the Same Procedures It Approved in Connection with Confirmation of the Second Amended Plan 9. Debtors move the Court for an order substantially in the form attached as Exhibit A (the “Confirmation Procedures Order”)3 which approves the specific Solicitation and Voting Procedures, including the forms of Ballots (the “Voting Procedures” attached hereto as Exhibit B). The Voting Procedures set forth in very specific detail the process for giving notice, establishing presumptive requirements for temporary allowance, and providing dates and deadlines for motions and confirmation objections concerning the Plan. The proposed forms of Ballot are attached to the Voting Procedures. 3 The Proposed Order also includes approval of the Disclosure Statement which is sought through a separate motion. 4 Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 5 of 12 10. The procedures proposed by this Motion mirror in every practical respect the Confirmation Procedures the Court previously approved in connection with solicitation of the now-superseded Second Amended Plan. In that context, the Court considered and decided numerous procedural matters for confirmation, including establishing procedures for notice, solicitation, and voting. The Court’s decisions on these points, following numerous hearings and contests by the parties, were ultimately embodied in the Order Approving Disclosure Statement and Establishing Asbestos Claims Bar Date and Procedures for Solicitation (Docket No. 4542) (Apr. 10, 2015) (“Second Amended Plan Confirmation Procedures Order”). A. This Motion Proposes a Substantially Similar Notice Program to the One the Court Previously Approved That Will Give Due Process to Claimants 11. This Motion, like the notice program approved in the Second Amended Plan Confirmation Procedures Order, seeks approval of a Notice Program devised by Kinsella Media, LLC (“Kinsella”), the Notice Agent appointed by the Court. Like the previously approved program, the proposed Notice Program will give Asbestos Claimants notice of the Plan and the Confirmation Hearing in an effective manner. Also like the previous Notice Program, this one provides for direct notice to known Asbestos Claimants of Garlock and Coltec and publication notice through print and electronic media, as well as through television advertising designed, based on Kinsella’s expertise, to give effective notice to potential Asbestos Claimants. The Notice Program, coupled with the appointment and participation of the FCR, is meant to satisfy the dictates of due process. 12. Attached as Exhibit C are the specifics of the Notice Program proposed by this Motion and developed by Kinsella. It provides that known Class 5 Asbestos Claimants will receive a Solicitation Package that will include (a) a CD-Rom that contains a copy of the Order 5 Case 10-31607 Doc 5341 Filed 05/26/16 Entered 05/26/16 16:03:11 Desc Main Document Page 6 of 12 Approving Disclosure Statement and Establishing Confirmation Procedures, the Disclosure Statement, the Voting Procedures, and forms of Ballots and instructions, and (b) a paper copy of the court-approved Confirmation Hearing Notice and Notice of Simultaneous Solicitation of GST Asbestos Claimants and Coltec Asbestos Claimants. Similarly it provides that Class 9 GST/Garrison Equity Interest holders, the only other class entitled to vote, will likewise receive Solicitation Packages in the same way.