Federal-Mogul Corp. said Tuesday that it plans to emerge from Chapter 11 bankruptcy on Dec. 27.
The Southfield, Mich.-based automotive and agriculture manufacturing equipment supplier said it bankruptcy reorganization plan was confirmed by the U.S. Bankruptcy Court on Nov. 8 and affirmed by the U.S. District Court on Nov. 14.
An onslaught of claims for damages due to asbestos-related disease drove Federal-Mogul into bankruptcy more than six years ago. Federal-Mogul's Chapter 11 plan shifted asbestos liabilities off the company's balance sheet and sets up a trust to pay claims for disease caused by the toxic substance.
Once the plan is implemented, ownership of the reorganized Federal-Mogul will be split between commercial creditors, led by billionaire investor Carl Icahn, and people with claims for asbestos damages. Icahn has agreed to acquire out the half of the reorganized Federal-Mogul that is earmarked for the asbestos claimants, in a transaction expected to give him control of the company.
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