The parent company of chemical manufacturer BioLab has agreed to a settlement stemming from a fire seven years ago at a warehouse in Georgia.
Under terms of the deal, Chemtura Corp. will place $7 million in a fund to be made available to residents, property owners and businesses that were impacted by the blaze, which produced a chemical cloud and closed local highways.
A federal bankruptcy court in Manhattan approved the deal on Jan. 25; Chemtura had filed for Chapter 11 protection there in March 2009.
“The settlement is the product of extensive arm’s-length negotiations occurring over many years,” according to a written statement from Craig Bruens, an attorney at Kirkland & Ellis in New York who has served as restructuring counsel for Chemtura.
“The proposed class-action settlement … will resolve substantially all remaining claims relating to the 2004 Conyers, Ga., warehouse fire that occurred at BioLab’s facility.”
Indeed, it’s not uncommon for businesses to seek resolution of outstanding claims while under bankruptcy protection. And in fact, the Georgia case was just one in a series of claims made by state and federal authorities over sites owned by Chemtura, Bruens added.
The company came out of Chapter 11 protection in early November, and a day later its shares were once
again trading publicly on the New York Stock Exchange, Bruens said.
Still, Chemtura’s emergence from bankruptcy wasn’t without contention. In the months beforehand, shareholders argued that the company’s reorganization plan had undervalued its worth. (A greater valuation would have given equity holders a higher recovery.)
But a bankruptcy judge in October ultimately dismissed those assertions and upheld Chemtura’s plan.
As for BioLab, it’s been largely business as usual, said Charlie Schobel, vice president and general manager. The company has benefited from a strong aftermarket despite a slowdown in new construction, added Schobel, who was equally optimistic over a recent dealer meeting in Washington, D.C., that drew some 650 attendees.
“We could very well have seen the bottom,” he said. “Builders today are reporting more interest and business.”