Appeals Court Rejects Combustion Engineering Bankruptcy Plan

WILMINGTON, Del. -- The U.S. 3rd Circuit Court of Appeals has rejected the bankruptcy plan of ABB Ltd. subsidiary Combustion Engineering, in which the asbestos defendant had proposed a $1.2 billion plan to resolve more than 100,000 asbestos claims. In re: Combustion Engineering, Inc., No. 03-3392 (U.S. Ct. App., 3rd Cir.).

In a 136-page opinion released Dec. 2, the Court of Appeals opined that the plan wrongfully extended liability protection to two ABB units not in bankruptcy, specifically ABB Lummus Global and Basic Inc.

The court said that while Combustion Engineering presented its bankruptcy plan as a pre-packaged Chapter 11 …