Pfizer Offers Quigley Beer Building for Asbestos Claims
April 07, 2011, 5:49 PM EDTBy Tiffany Kary
(Updates with building price in third paragraph.)
April 7 (Bloomberg) -- Pfizer Inc., the world’s largest drugmaker, will contribute assets including a 281,581-square- foot building leased to a brewery to help its bankrupt, non- operating Quigley unit pay asbestos claims.
Quigley’s sixth outline of a plan to reorganize, filed in U.S. Bankruptcy Court in Manhattan yesterday, also would require Pfizer to forgive a secured claim of $86 million, a bankruptcy loan of $12.6 million and unsecured claims of $33 million. The drugmaker would also contribute $81 million in insurance proceeds, according to court papers.
“Pfizer will pay $42 million to acquire a commercial property consisting of an approximately 281,581 square foot building on approximately 12 acres of land,” according to court papers. The building is leased to a distributor for “a leading brewery company,” the filing said.
The lease will produce net income of $1.9 million for the first year of the lease, with the amount increasing over time, the papers said. The location of the building and name of the beer company aren’t specified.
Chris Loder, a spokesman for New York-based Pfizer, didn’t immediately return a call for comment.
U.S. Bankruptcy Judge Stuart Bernstein refused to allow Quigley to exit Chapter 11 court protection in September, saying Pfizer had manipulated the process to benefit itself. Pfizer and a committee of asbestos claimants won his approval of an agreement that will support the new Chapter 11 plan, which still requires court approval.
Steel Industry
Quigley, founded in 1916, made three products for the steel industry from the 1940s to the 1970s that contained asbestos. Pfizer bought Quigley in 1968, and the company stopped most operations in 1992. Pfizer said it never made or sold any Quigley products, and some claimants hadn’t released Pfizer from alleged “derivative liability.”
“This ensures that asbestos claimants are not compelled to surrender their derivative claims against Pfizer without appropriate compensation,” Quigley wrote in the plan. The plan would give a 7.5 percent distribution to Quigley claims, and give 23 percent of the liquidated claim value to claimants who haven’t dismissed derivative claims against Pfizer.
Asbestos claims against Quigley may total $4.45 billion during the next 42 years, according to testimony cited by Bernstein in September. As under prior proposals, Pfizer will also contribute $264.9 million in cash and all of the stock in a reorganized Quigley to a trust to pay asbestos claims.
Pfizer in November reported a $701 million third-quarter charge for asbestos litigation for Quigley. The ad hoc committee representing 43,100 asbestos claimants asked the court to lift an injunction that has barred them from bringing claims against Pfizer since 2004, when Quigley filed for bankruptcy.
The case is In re Quigley Co., 04-15739, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
--Editors: Andrew Dunn, Michael Hytha
To contact the reporter on this story: Tiffany Kary in U.S. Bankruptcy Court in Manhattan at tkary@bloomberg.net.
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net
