Bankruptcy Court approves Reorganization Plans – US Chapter 11 proceedings move towards final conclusion (ad hoc)

26. September 2007

On September 24, 2007, an order was entered by the Bankruptcy Court approving the PoRs and overruling all remaining objections to them. In order for the confirmation order of the Bankruptcy Court to become final, it must be affirmed by the District Court. In the event that  the District Court affirms the Bankruptcy Court order, the time for an appeal (30 days) must, moreover, expire.   

As previously disclosed, RHI, several RHI affiliates and various US companies operating under Chapter 11 (including North American Refractories Company /NARCO) had reached settlement agreements in April 2004 to settle all mutual prepetition claims.

Beginning in June 2005, the US-Chapter 11 companies filed Plans of Reorganization (PoRs). The PoRs filed by these companies incorporate the abovementioned settlement agreements. A condition to the NARCO settlement agreement is a USD 40 million payment by Honeywell International Inc. to RHI Refractories Holding under a prior contract, which payment is called for upon final approval of the confirmation order and consummation of the PoRs.

If the approval given by the Bankruptcy Court becomes final and the PoRs become effective, RHI AG and its affiliates permanently receive protection with respect to all remaining asbestos claims against the debtor companies in the USA.