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January 27th, 2008
A committee analyzing the settlements agreed on by Dana Corp has asked to see the settlement papers before the company is allowed to exit bankruptcy. The committee says that the agreement may not be beneficial to creditors.
Dana Corp, an Ohio based automotive parts maker, thought that they had taken care of part of their asbestos lawsuit problems. Earlier this year, an agreement was reached with 7,500 claimants in asbestos lawsuits against the company. This would have facilitated the companies filing of Chapter 11, and allowed the company to have a decision on the bankruptcy as early as this week. Now, a committee representing the interests of creditors in the asbestos lawsuits are asking to see the claimant agreements, stating that those creditors that had settled prior to the company receiving Chapter 11 status may have been given more favorable treatment by Dana Corp.
Though Dana Corp argues that only seven percent of the 150,000 claimants show signs of mesothelioma or asbestosis, the council feels that all creditors should receive the same agreement no matter when they agree to terms with the company. By getting some of the mesothelioma cases settled prior to Chapter 11, the company comes out better after the bankruptcy has been approved.
