SPY322.64-7.66 -2.32%
DIA267.58-5.23 -1.92%
IXIC10,632.99-330.65 -3.02%

O-I Glass Announces its Subsidiary, Paddock Enterprises, Files for Chapter 11 Bankruptcy

O-I Glass, Inc. (“O-I Glass” or the “Company”) today announced that its wholly owned subsidiary, Paddock Enterprises, LLC (“Paddock”), has voluntarily filed for relief under Chapter 11

Benzinga · 01/06/2020 11:26

O-I Glass, Inc. (“O-I Glass” or the “Company”) today announced that its wholly owned subsidiary, Paddock Enterprises, LLC (“Paddock”), has voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware to equitably and finally resolve all of its current and future asbestos-related claims.

On December 27, 2019, O-I Glass announced the adoption of a new holding company structure whereby O-I Glass became the new parent entity with Owens-Illinois Group, Inc. (“O-I Group”) and Paddock as direct, wholly owned subsidiaries. The Company’s legacy asbestos-related liabilities are isolated within Paddock, structurally separating them from the Company’s glass-making operations, which remain under O-I Group. O-I Glass and O-I Group are not included in the Chapter 11 filing and will continue to operate as usual throughout Paddock’s Chapter 11 process. 

Andres Lopez, CEO of O-I Glass, said, “Addressing Paddock’s legacy liabilities through Chapter 11 will help enable O-I Glass to further unlock the value creation potential of this global franchise. By improving the Company’s capital structure, this important step will support a number of critical strategic efforts and possibilities as O-I Glass leverages its position as the world's leading manufacturer of sustainable glass packaging.” 

After exiting a business in 1958 that produced Kaylo, an asbestos-containing thermal insulation product, the Company has disposed of over 400,000 asbestos-related claims and incurred gross expense of approximately $5 billion for asbestos-related costs. Lopez continued, “Paddock evaluated its options and determined that a Chapter 11 plan of reorganization was the most fair and equitable way to obtain certainty and finality in addressing its legacy asbestos-related liabilities. Pending final resolution of the Chapter 11 proceeding, all asbestos-related claims payments will be suspended.”

Paddock’s ultimate goal in its Chapter 11 case is to confirm a plan of reorganization under Section 524(g) of the U.S. Bankruptcy Code and utilize this specialized provision to establish a trust that will address all current and future asbestos-related claims. Paddock has been and remains committed to fairly and equitably compensating claimants who are ill and have legitimate exposure to the Kaylo products manufactured by its predecessor from 1948-1958. Paddock looks forward to working swiftly and constructively to confirm a plan of reorganization and is committed to emerging from bankruptcy as expediently as possible.