Halliburton Notes Confirmation of Reorganization Plan
Houston-based provider of products and services to the petroleum and energy industries, Halliburton, reported that on July 16, 2004, the Honorable Judith K. Fitzgerald issued an order confirming the Chapter 11 Plan of Reorganization filed by DII Industries, Kellogg Brown & Root (KBR) and various other Halliburton subsidiaries to implement the companies’ proposed global asbestos and silica settlement.
DII Industries, KBR and other affected subsidiaries filed for a prepackaged Chapter 11 plan of reorganization on Dec.16, 2003, in Bankruptcy Court in Pittsburgh, Pa.
“This is positive news for Halliburton’s employees, customers and shareholders. I am pleased that we’re taking our final steps toward permanently resolving our asbestos liability,” said Dave Lesar, chairman, president and chief executive officer of Halliburton. “Now that DII Industries’ reorganization has been entered and we have a confirmation, the asbestos chapter in Halliburton’s history soon will be closed.”
After reviewing the confirmation order, the debtors filed a motion with the Bankruptcy Court requesting clarification of certain provisions in the confirmation order. In response to the debtors’ motion, the Bankruptcy Court agreed that clarification concerning the points raised by the debtors was appropriate and announced that it would clarify its confirmation order.
The clarifications that the Bankruptcy Court approved make it clear that the debtors, Halliburton and the other Halliburton affiliates, will receive the scope of relief that was requested in the debtors’ plan of reorganization in relation to asbestos and silica claims. The Bankruptcy Court also announced that it would transmit its amended and clarified order to the U.S. District Court for affirmation as required by bankruptcy law. Entry of the confirmation order is a major step towards a resolution of the silica and asbestos liabilities.
The next key milestones for the plan of reorganization are the finalization of the settlement agreements with the insurance companies and affirmation of the confirmation order by the U. S. District Court, followed by a 30-day period for appeals, if any, to the Third Circuit Court of Appeals.
Until the settlement agreements with the insurance companies are finalized and approved by the Bankruptcy Court, Halliburton anticipates that the insurance companies will file appeals of the confirmation order to protect their appeal rights. However, assuming the previously announced settlement agreements are finalized and receive Bankruptcy Court approval, Halliburton expects the insurance companies will withdraw their appeals and permit the plan of reorganization to be affirmed by the U. S. District Court without appeals by the insurance companies.