Paddock Enterprises, a wholly owned subsidiary of US-based glass container manufacturer O-I Glass, has filed a Chapter 11 reorganisation plan and disclosure statement with the US Bankruptcy Court for the District of Delaware.
The filing comes under the Chapter 11 bankruptcy case that the company filed in January 2020.
It will permanently settle all existing and future asbestos-related claims after receiving the court’s approval.
As part of the plan, a trust will be established to process and pay for all claims related to asbestos.
Once the plan comes into force, the trust will receive $610m in funding.
O-I Glass CEO Andres Lopez said: “We are pleased that Paddock is one significant step closer towards achieving the goal of resolving its legacy liabilities in a manner that is fair and efficient for claimants and that provides finality for O-I Glass and Paddock.
“This plan represents a favourable outcome for all parties, and we look forward to the plan’s implementation as Paddock moves towards emergence.”
The plan has been jointly proposed by its supporters, which include O-I Glass, the Official Committee of Asbestos Personal Injury Claimants, Paddock and the legal representative for future asbestos personal injury claimants.
It was developed after ‘extensive’ informal negotiations and more than a month of formal mediation proceedings.
The bankruptcy court is due to hear the disclosure statement on 16 February.
Paddock expects a final hearing on the plan to be held in the second quarter of this year.
Last month, O-I Glass agreed to divest Cristar TableTop to Vidros Colombia, an affiliate of Brazilian glass tableware producer Nadir Figueiredo, for $95m.
The sale is part of O-I Glass’ ongoing portfolio optimisation programme and is expected to generate gross proceeds of around $95m.
It is due to close in the first half of this year.