Federal-Mogul Files Chapter 11 Petition to Resolve Asbestos Liability

SOUTHFIELD, Mich. - Auto-parts maker Federal-Mogul Corp. filed a voluntary petition for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware on Oct. 1, citing the overwhelming financial burden of asbestos claims as its reason for seeking protection.

Subsidiaries in the United Kingdom also filed jointly for Chapter 11 in the High Court of Justice, Chancery Division in London, England.

photo-7Federal-Mogul reported it paid $351 million in asbestos liability payments last year and will pay an estimated $380 million this year. The company carries a $4.3 million debt, according to company filings.

Additionally, the company's stock has been trading below …