In re Global Indus. Techs., Inc.

Full title: In re: Global Industrial Technologies, Inc., et al. Debtors

Court: UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Date published: Feb 13, 2013

Bankruptcy No. 02-21626-JKF (Bankr. W.D. Pa. Feb. 13, 2013)

Opinion

Bankruptcy No. 02-21626-JKF Related to Doc. No. 10704, 10842

02-13-2013

In re: Global Industrial Technologies, Inc., et al. Debtors

Judith K. Fitzgeral

Jointly Administered

Chapter 11

Related to Doc. No. 10704, 10842¹

1 Doc. No. 10698 is a Notice Regarding August 29, 2012, Technical Amendments to Third Amended Plan of Reorganization. See also Doc. Nos. 5427 (Amended Chapter 11 Plan dated December 28, 2005), 7827 (Report filed by Debtor), 10698 (Technical Amendments dated August 29, 2012, to Plan), 10746 (September 21, 2012, Notice of Errata to August 29, 2012, Technical Amendments). After the Court of Appeals for the Third Circuit remanded the confirmation order, Debtor settled with the APG Silica Future Claimants' Representative, Doc. No. 10808; Certain Hartford Insurers, Doc. No. 10809; Certain Chartis Insurers, Doc. No. 10810; Certain Insurers, Doc. No. 10811. Debtor filed Amended Composite Plan Documents at Doc. No. 10844.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND

RECOMMENDATION TO DISTRICT COURT TO AFFIRM CONFIRMATION OF

THIRD AMENDED PLAN OF REORGANIZATION AS AMENDED THROUGH

SEPTEMBER 21, 2012, AND AS SUPPLEMENTED BY SETTLEMENTS THROUGH

OCTOBER 12, 2012 ²

2 The Court's jurisdiction was not contested.

I. INTRODUCTION

1. By Order of January 30, 2006, Doc. No. 5446, after notice to all parties in interest and hearings held on December 12, 2005, and January 17, 2006, this Court approved the Combined Disclosure Statement (Doc. No. 5426) to Accompany the Third Amended Plans of Reorganization (the "NARCO Plan"³ and the "GIT Plan,"(Doc. No. 5427) and, collectively, the "Plans") Dated December 28, 2005,⁴ as amended by the Amendment Dated December 15, 2006,⁵ Doc. No. 6971, and as further modified by Technical Amendments filed August 29, 2012 (the "Technical Amendments" (GIT Doc. No. 10698)). See also Doc. No. 10844, Amended Composite Plan Documents Filed by GIT on October 24, 2012. Confirmation hearings with respect to the NARCO and GIT Plans were held on June 5-7, 2006, October 26-27, 2006, November 17, 2006, March 16, 2007, and, for the GIT Plan only, October 29, 2012. After considering the GIT Plan, the Disclosure Statement and related documents, the declarations submitted in support of the GIT Plan, and the testimony of witnesses and exhibits presented at the Confirmation Hearings, as supplemented on request of the Court on December 12, 2012, and based on the preponderance of the evidence presented by the Debtors and parties in interest at the hearings, the Court makes the following Findings of Fact and Conclusions of Law.⁶

3 North American Refractories Company, Bankruptcy No. 02-20198. The NARCO plan was confirmed on November 13, 2007, Doc. Nos. 5507, 5508. The District Court affirmed NARCO's plan confirmation by order dated December 20, 2007, Bankr. Doc. No. 5585, District Court Misc. No. 07-318.

4 The Third Amendment to the NARCO plan is at Doc. No. 3889 and was filed December 28, 2005.

5 The December 15, 2006, date relates only to the GIT plan. The document is titled Amendment Dated December 15, 2006, to Third Amended Plan of Reorganization Dated December 28, 2005, of Global Industrial Technologies, Inc. and Its Subsidiaries. See Doc. No. 6971. Likewise, the August 29, 2012, Technical Amendments apply only to GIT as do the (1) Notice of Errata to August 29, 2012, Technical Amendments, Doc. No. 10746, filed on September 21, 2012, and Amended Composite Plan Documents, Doc. No. 10844, filed October 24, 2012.

6 Unless otherwise defined herein, all capitalized terms shall have the meaning assigned thereto in the GIT Plan. All findings of fact that are conclusions of law shall be deemed to be conclusions of law, and all conclusions of law which are findings of fact shall be deemed to be findings of fact.

2. Notice of the October 29, 2012, confirmation hearing was provided by first class mail to all of the Debtors' known creditors, equity interest holders and all other entities required to be served under Bankruptcy Rule 2002 and was published in USA Today. (See GIT Doc No. 10726.)

3. The Debtors are the proponents of the GIT Plan. (May 23, 2006, Declaration of Jon Allegretti (hereafter "Allegretti Decl."), (GIT Doc. No. 6028), ¶ 6). The GIT Plan was the subject of extensive negotiations. The GIT Plan has the support of the Asbestos Claimants Committee, the Trade Creditors Committee, and the Asbestos and Silica Future Claims Representatives ("FCR"), as well as the RHI AG Parties, which are affiliates of the Debtors.

4. Various insurers of the Debtors and other parties in interest filed objections to the GIT Plan.⁷

7 Objections to the GIT Plan were filed by California Union Insurance Company, International Insurance Company, Westchester Fire Insurance Company (GIT Doc. No. 5629), Pacific Employers Insurance Company (GIT Doc. No. 5631), California Union Insurance Company, International Insurance Company, Westchester Fire Insurance Company (GIT Doc. No. 5994), Lumbermans Mutual Casualty Company and its American Insurance Affiliates(GIT Doc. No. 5991), National Union Insurance Company of Pittsburgh, PA (GIT Doc. Nos. 5637 and 5993), and Hartford Accident and Indemnity Company, First State Insurance Company and Twin City Fire Insurance Company (GIT Doc. Nos. 5638 and 5996). In addition, Travelers Casualty & Surety Company also filed objections to the GIT Plan (GIT Doc. Nos. 5614 and 5995), but such objections were resolved by settlement prior to this Court's initial confirmation order. The term "Travelers" shall have the meaning ascribed in the "Settlement Agreement, Policy Buy-Back and Release Between A.P. Green and Travelers" attached as Exhibit A to the Debtors' Motion for an Order Approving Settlement Agreement with Travelers and Authorizing Sale of Interests in Certain Insurance Policies (GIT Doc. No. 6967).

5. The Court initially confirmed the GIT Plan over the objections of certain objecting insurers and appeals followed. The District Court affirmed this Court's confirmation order, but the Court of Appeals for the Third Circuit reversed the confirmation and remanded the case to this Court for "a more searching review of [certain objecting insurers'] allegations of collusion between the debtors and counsel for the silica claimants." In re Global Industrial Technologies, Inc., 645 F.3d 201, 215 (3d. Cir.)(en banc), cert. denied, __ U.S. __, 132 S.Ct. 551 (2011) (hereafter "GIT remand opinion). That inquiry has been conducted.

II. PROCEDURAL BACKGROUND

A. The Debtors

6. North American Refractories Company ("NARCO") and certain of its subsidiaries filed petitions for relief on and after January 4, 2002:

• NARCO, filed January 4, 2002, Bankr. No. 02-20198;
• InterTec Company, filed January 4, 2002, Bankr. No. 02-20199;
• I-Tec Holding Corp., filed January 4, 2002, Bankr. No. 02-20200;
• Tri-Star Refractories, Inc., filed January 4, 2002, Bankr. No. 02-20979

7. GIT and a number of GIT Affiliated-Debtors (referred to herein as the "Debtors" or the "GIT Debtors") filed petitions for relief on or after February 14, 2002:

• Global Industrial Technologies, Inc., filed February 14, 2002, Bankr. No. 02-21626;
• Harbison-Walker Refractories Company, filed February 14, 2002, Bankr. No. 02-21627;
• Indresco International, Ltd., filed February 14, 2002, Bankr. No. 02-21628;
• Harbison-Walker Refractories Europe, Ltd., filed February 14, 2002, Bankr. No. 02-21629;
• Harbison-Walker International Refractories, Inc., filed February 14, 2002, Bankr. No. 02-21630;
• Global Industrial Technologies Service Company, filed February 14, 2002, Bankr. No. 02-21631;
• GPX Corp., filed February 14, 2002, Bankr. No. 02-21632;
• GIX Foreign Sales Corp., filed February 14, 2002, Bankr. No. 02-21633;
• Global Processing Systems, Inc., filed February 14 2002, Bankr. No. 02-21634;
• TMPSC, Inc., filed February 14, 2002, Bankr. No. 02-21635;
• GPX Forge, Inc., filed February 14, 2002, Bankr. No. 02-21636;
• GPX Forge-Acquisition, Inc., filed February 14, 2002, Bankr. No. 02-21637;
• GPX Forge-U, Inc., filed February 14, 2002, Bankr. No. 02-21638;
• A.P. Green Industries, Inc., filed February 14, 2002, Bankr. No. 02-21639;
• A.P. Green Services, Inc., filed February 14, 2002, Bankr. No. 02-21640;
• APG Development Corp., filed February 14, 2002, Bankr. No. 02-21641;
• Detrick Refractory Fibers, Inc., filed February 14 2002, Bankr. No. 02-21642;
• APG Refractories Corporation, filed February 14, 2002, Bankr. No. 02-21649;
• Intogreen Co., filed February 14, 2002, Bankr. No. 02-21650;
• A.P. Green International, Inc., filed February 14, 2002, Bankr. No. 02-21651;
• A.P. Green Refractories, Inc., filed February 14, 2002, Bankr. No. 02-21652;
• Lanxide Thermocomposites, filed February 14, 2002, Bankr. No. 02-21653;
• Chiam Technologies, Inc., filed February 14, 2002, Bankr. No. 02-21654;
• RHI Refractories Americas, Inc., filed February 22, 2002, Bankr. No. 02-21980;
• RHI Services, Inc., filed March 19, 2002, Bankr. No. 02-23042; and
• RHI America Receivables Corporation, filed March 19, 2002, Bankr. No. 02-23043.

8. The NARCO entities and GIT entities bankruptcy cases were jointly administered. (Order Directing Joint Administration of Related Chapter 11 Cases (NARCO Doc. No. 30; GIT Doc. No. 29.)) B. GIT Committees and Future Claimants Representatives

9. The United States Trustee appointed the GIT Creditors Committee on March 27, 2002. (GIT Doc. No. 124.)

10. The United States Trustee appointed the GIT Asbestos Claimants Committee on March 15, 2002. (GIT Doc. No. 90.)

11. The Bankruptcy Court appointed Lawrence Fitzpatrick as the Legal Representative of persons who may have asbestos-related demands against GIT and A.P. Green Industries, Inc. ("APG") Debtors on April 15, 2003 (Doc. No. 1288). The scope and authority of the appointment was expanded by order dated October 15, 2004 (GIT Doc. No. 3560.)

12. The Bankruptcy Court appointed Philip A. Pahigian as the Legal Representative of persons who may have silica-related demands against GIT and the APG Debtors on October 6, 2003. (GIT Doc. Nos. 2102.) The scope and authority of the appointment was expanded by order dated October 15, 2004. (GIT Doc. No. 3560.)

III. THE HISTORY OF THE DEBTORS AND THE ASBESTOS CLAIMS AND SILICA CLAIMS.

13. NARCO, Harbison-Walker Refractories Company ("HARBISON-WALKER")⁸ and APG historically were competitors in the refractory industry. In 1995, RHI AG, an Austrian company, acquired NARCO. On December 31, 1999, a subsidiary of RHI AG acquired GIT, which owned HARBISON-WALKER and APG along with other miscellaneous businesses and companies. (Allegretti Decl., ¶ 4.) RHI Holding is the immediate corporate parent of NARCO and GIT, but is not a debtor in these cases. A. APG Asbestos Claims

8 Various Harbison-Walker entities filed Chapter 11 and the cases were jointly administered with GIT. See Bankr. Nos. 02-21630, 02-21627,02-2169.

14. Acquired by GIT in 1998, APG (formerly known as A.P. Green Refractories Company) was initially incorporated in 1915 as a Missouri corporation operating under the name of A.P. Green Fire Brick Company. APG operated independently until its merger with U.S. Gypsum Corporation ("U.S. Gypsum") in 1967, when it became a wholly-owned subsidiary of U.S. Gypsum. As part of a U.S. Gypsum plan of reorganization approved in 1987, the stock of APG was distributed to stockholders of U.S. Gypsum. APG operated as a publicly-owned company until it was acquired by GIT in 1998. (Allegretti Decl., ¶ 55.)

15. APG Services is a Michigan corporation and a wholly-owned subsidiary of APG. APG Services is named as a defendant in numerous asbestos litigation claims as a result of its installation of asbestos-containing products. (Id., ¶ 56.)

16. Since the 1980s, APG and APG Services have been named as defendants in hundreds of thousands of asbestos-related personal injury lawsuits. Plaintiffs in these suits generally assert that they developed diseases caused by exposures to asbestos and/or asbestos containing products manufactured and/or sold by APG, or installed by APG Services. (Id., ¶ 57.)

17. Prior to the Petition Date, APG had resolved approximately 203,000 asbestos-related claims, and in doing so expended approximately $448 million in indemnity costs. APG also obtained dismissal without payment of more than 10,000 asbestos-related claims. Additionally, APG settled or had judgment entered against it in approximately 49,500 asbestos-related claims, in the aggregate amount of $491 million, which amount was unpaid as of the Petition Date. APG Services had expended approximately $5.2 million in resolving approximately 8,015 asbestos-related claims, and had resolved approximately 10,112 additional asbestos-related claims through dismissals without payments to plaintiffs prior to its bankruptcy filing. (Id., ¶ 58.)

18. As of the Petition Date, 235,757 asbestos-related claims (including the 49,500 described in the preceding paragraph as having been reduced to a dollar amount owing but remaining unpaid) remained pending against APG, and 58,899 asbestos-related claims remained pending against APG Services. (Id., ¶ 59.)

19. APG believes that thousands of additional asbestos-related claims have accrued since the Petition Date, and based upon its knowledge and experience as well as currently available literature, APG estimates that several hundred thousand additional asbestos related claims will be asserted against it and/or APG Services in the future. (Id., ¶ 60.)

20. Approximately 275,000 holders of APG Asbestos Trust Claims voted on the GIT Plan. (April 14, 2006, Declaration of Kathleen Logan (hereafter "April 14, 2006, Kathleen Logan Decl.")), (GIT Doc. No. 5804, ¶ 20). B. APG Silica Claims

21. As of the Petition Date, APG was a defendant in approximately 169 "silica-only" claims (claims alleging only silica-related personal injury caused by exposure to an APG product) in state trial court in Texas. None of these claims had been resolved or settled by APG prior to the Petition Date. (Allegretti Decl., ¶ 61.)

22. Prior to the Petition Date, Travelers had authorized the settlement of six (6) silica cases against APG for $65,000 and spent $247,531 defending 17 silica lawsuits against APG. (Oct. 17, 2006 Rev'd Supp. Nystrom Rept., ¶ 20). Travelers also repeatedly denied coverage for APG silica claims, allegedly based on a "pollution exclusion" in the Travelers' policies. (Debtors Confirm. Hrg. Exs. 26, 27, 30, 32, and 34.) Travelers spent an average of $14,000 per lawsuit in defending 17 silica-related lawsuits against APG. (Oct. 26, 2006, Confirm. Hrg. Tr., at 234) (Doc. No. 7967.)

23. Among the silica-related cases against APG that were settled with the authorization of Travelers was the Lafferty silicosis case. APG's portion of the settlement payment in that case was $50,000. (June 5, 2006, Confirm. Hrg. Tr., at 99, Doc. No. 6210.)

24. In order to obtain an understanding of the potential APG silica-related liability that was facing the Debtors and to enable them to prepare a solution for the potential problem this liability would pose to the reorganizing companies, the Debtors and/or their representatives obtained and reviewed extensive material on silica claims in the United States, including the treatment of such claims that arose in relation to the In re Mid-Valley, Inc., et al. bankruptcy case (Bankr. No. 03-35592) (Bankr. W.D. Pa.). (Allegretti Decl., ¶ 65; June 5, 2006, Confirm. Hrg. Tr., at 58.)⁹

9 The APG cases are jointly administered with GIT; GIT owns A.P. Green Industries, Inc. Third Amended Disclosure statement, Doc. No. 5426 at 16.

25. Over 4,600 individuals asserted silica claims against APG in ballots cast on the GIT Plan. (Oct. 18, 2006, Supp. Decl. of Kathleen Logan, (hereafter "Oct. 18, 2006, Logan Decl.), (GIT Doc. Nos. 6750, ¶ 6.) See also April 14, 2006, Declaration of Kathleen M. Logan. (GIT Doc. No. 5804), ¶ 20.)

26. Timothy Wyant, Ph.D. calculated the estimated number of present and future silica-related personal injury claims against APG. Dr. Wyant's analysis and conclusions are set forth in his report of September 15, 2006, Doc. No. 6635, as supplemented by his report of October 17, 2006. (Sept. 15, 2006, Expert Report of Dr. Timothy Wyant, Doc. No. 6635, (hereafter "Sept. 15, 2006, Wyant Rept."); Oct. 17, 2006, Supplemental Expert Report of Dr. Timothy Wyant, Doc. No. 6740 (hereafter "Oct. 17, 2006, Wyant Rept."))

27. Dr. Wyant relied on the 4,636 supplemental information forms¹⁰ that were submitted to the Debtors by holders of current silica-related claims as proxies for the number of present APG silica-related personal injury claims, given that since APG's February 14, 2002, Petition Date, the filing of new silica claims against the Debtors has been stayed. The majority of claimants who submitted (or whose counsel submitted) supplemental information forms also cast ballots in this proceeding, in which they certified the existence of their silica-related claims against the Debtors. (Oct. 17, 2006, Wyant Rept., at 2, 13-15.)

10 See Doc. No. 6405, Order of July 26, 2006, requiring Debtors to serve APG Silica Supplemental Submission form on all persons, or their counsel, who submitted votes in Class 5-A (APG Silica Trust Claims) on the GIT Third Amended Plan with respect to a supplemental ballot. The form was negotiated at arm's length and was intended to provide additional information that the Court needed in order to adjudicate whether a silica trust would be approved. Tr. June 29, 2006, Doc. No. 6320 at 55.

28. Based on the 4,636 supplemental information forms that were submitted to the Debtors, Dr. Wyant calculated a range of likely future annual filing rates for APG silica related claims. The "high end" annual filing rate is 1,084 claims per year, and the "low end" annual filing rate is 482 claims per year. (Id. at 3, 16.) In calculating these rates, Dr. Wyant concluded that it was appropriate to allocate the total number of current claims evenly over the years from the Petition Date to the present, given the availability of certain information that suggested a "stable filing period" (for example, date of diagnosis or date of filing against other defendants) and given the existence of the automatic stay. (Id. at 17-18.)

29. Dr. Wyant's "high end" filing rate is based on the conservative assumption that future filing rates will mirror recent experiences during the pendency of this bankruptcy proceeding, as reflected by the supplemental information forms, without adjustment. (Sept. 15, 2006, Wyant Rept., at 5, 23-25.)

30. Dr. Wyant's "low end" filing rate is based on calculating the percentage of individuals submitting supplemental information forms with diagnostic information from doctors identified by United States District Judge Janice Jack as having applied overly lenient diagnostic criteria in identifying silicosis, and assuming that future annual claims filing rates will be reduced by that percentage. (Id. at 5, 23-25.)

31. Dr. Wyant's calculation of the "low end" of his estimated range conservatively assumes that none of the claims involving the doctors identified by Judge Jack originated with a genuine case of silicosis, and that no attorney in the future will ever submit a claim that relies upon diagnostic information from one of the identified doctors. (Oct. 17, 2006, Wyant Rept., at 5-6.)

32. Dr. Wyant does not adjust his "low end" annual claims filing rate for diagnoses from two doctors (Dr. Jay Segarra and Dr. Dominic Gaziano) whose diagnoses are still accepted by other bankruptcy personal injury claims trusts, as he concludes that there is no valid statistical basis for making such an adjustment. He also does not adjust his "low end" annual claims filing rate to account for certain current claimants who previously may have submitted claims for asbestos-related diseases, because he concludes that there is no factual basis to suggest that such claimants cannot, or will not, submit silica-related disease claims in the future, regardless of their past filing histories, or that such claimants cannot have a silica-related disease based on their past filing history. (Id. at 19-21.) See note 14, infra.

33. In estimating the range of total future APG silica-related claims that will be asserted against the Debtors, Dr. Wyant calculated a future claims multiplier that reflects the number of future claims relative to the baseline annual claims rates described above. (Sept. 15, 2006, Wyant Rept., at 33.) Dr. Wyant's methodology for calculating the future claims multiplier included calculation of the age-specific filing rates (based on the age-at-diagnosis of claimants who submitted supplemental information forms) for the population of individuals working in and prior to 2000 in industries where silica exposure was likely, and in which refractory products were used. (Id. at 31-32.)

34. Dr. Wyant calculated APG's future claims multiplier for the period 2006 to 2050 to be 21.0 (including the Judge Jack doctors) and 21.5 (excluding the Judge Jack doctors). Dr. Wyant also calculated that the future claims multiplier for the period 2006 to 2016 to be 8.7 (including the Judge Jack doctors) and 8.8 (excluding the Judge Jack doctors). (Sept. 15, 2006, Wyant Rept., at 33; Oct. 17, 2006, Wyant Rept., at 4.)

35. Using these future claims multipliers, Dr. Wyant calculated that through 2016, between 4,192 and 9,583 silica-related claims would be filed against APG; through 2050, between 10,360 and 23,304 silica-related claims would be filed against APG. (Oct. 17, 2006, Wyant Rept., at 4.)

36. The estimated future silica-related claims against APG described above are in addition to the 4,636 current claims reflected by the supplemental information forms submitted to the Debtors. (Id. at 2.)

37. Dr. Wyant confirmed the accuracy and reasonableness of his silica-related estimations by comparing the claims filing rate and future claims multiplier which he calculated for APG to claims filing rates and future claims multipliers calculated for other defendants, including HARBISON-WALKER and General Refractories Company.¹¹ (Sept. 15, 2006, Wyant Rept., at 29-31.)

11 General Refractories is not a debtor. Its assets were purchased by APG in 1994. See ¶ 44, infra.

38. Like APG, its sister company, HARBISON-WALKER is a manufacturer of refractory products. HARBISON-WALKER had a similar history to APG with respect to the types of refractory products sold and the revenues from those sales. (Id. at 27.)

39. Prior to its bankruptcy filing, HARBISON-WALKER resolved 280 silica-related personal injury claims in the tort system for an average of approximately $4,700 per claim, for a total incurred liability of over $1 million. Of these 280 resolved claims, 169 were paid on average of approximately $7,800 per claim, while 111 were settled for no payment or were dismissed. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 19.)

40. A personal injury trust for silica-related claims has been established in the Mid-Valley case to resolve claims against HARBISON-WALKER (a former subsidiary of one of the Mid-Valley debtors, DII Industries, LLC, see Bankr. Nos. 03-35592 and 03-35593)¹² and other Mid-Valley debtors. Mr. allegretti's review of public bankruptcy records and other reports led him to conclude that twenty-one thousand silica claims were settled for an amount in excess of $100 million, (Allegretti Decl., ¶ 63), an understanding that informed his conclusion that a silica trust was the fairest way to deal with A.P. Green's silica liabilities. See Tr. of June 5, 2006, Doc. No. 6210.

12 These cases were jointly administered at Bankr. No. 03-35592. See Doc. No. 11 in Bankr. No. 03-35593 and Doc. No. 99 in Bankr. No. 03-35592.

41. Dr. Wyant reported that based on an analysis of silica-related claims against HARBISON-WALKER that was prepared for the Mid-Valley bankruptcy,¹³ the annual silica-related claims filing rate against HARBISON-WALKER from 2000-2005 was 845 claims per year. (Sept. 15, 2006, Wyant Rept., at 21, 28.) The future claims multiplier for HARBISON-WALKER was 15.0, and the total number of future silica related claims against HARBISON-WALKER was estimated to be 13,500. (Id. at 6, 31.)

13 Mid-Valley, Inc., et al., Bankr. No. 03-35592-JKF (Closed).

42. The HARBISON-WALKER claimant population is restricted to claimants exposed to HARBISON-WALKER products by 1982. The APG claimant population, however, includes claimants exposed to APG products through February 14, 2002, an additional 20 years. Dr. Wyant concluded that as a result of the later exposure requirements, APG would be expected to have a higher ratio of future claims to present claims than would be found for HARBISON-WALKER. (Id. at 6.)

43. The HARBISON-WALKER resolution average of $4,700 per claim is a reasonable proxy for settlement of APG silica claims in the tort system for the following reasons: (a) HARBISON-WALKER is a manufacturer of refractory products sold in the same markets as APG's products; (b) under the Plan of Reorganization approved by this Court in In re Mid-Valley, Inc., which resolved claims arising from H-W's operations as well as Mid-Valley's (and affiliates) operations, approximately 21,000 claims were settled for in excess of an average of $6,485 per claim; and (c) Travelers authorized the settlement of six silica cases against APG for $65,000 (an average of $10,833 per case), (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 20), including a settlement of $50,000 in 1992 (the "Lafferty Case"). (June 5, 2006, Confirm. Hrg. Tr., at 99.) In addition to the foregoing settlement values, defense costs for mass tort claims in the tort system, ranging between 25% and 33% of the indemnity costs associated with such claims, also must be accounted for. (Sept. 15, 2006, Wyant Rept., at 39.)

44. General Refractories Company was a manufacturer of refractory products until 1994, when its assets were purchased by APG. Like HARBISON-WALKER, General Refractories also made products similar to those made by APG and sold them to the same types of buyers. (Sept. 15, 2006, Wyant Rept., at 28-29.)

45. APG purchased certain assets from General Refractories under a June 11, 1994, Asset Acquisition Agreement, and General Refractories has filed claims in the bankruptcy related to APG's alleged liability for silica claims against this former refractories company. (Allegretti Decl., ¶ 64.)

46. As of June 6, 2003, approximately 10,000 claims involving silica exposure had been filed against General Refractories. (Sept. 15, 2006, Wyant Rept., at 29.) During the 2004-2005 period, General Refractories received 2,219 claims involving silica exposure, most of them filed in Ohio and Pennsylvania. (Id. at 29.)

47. Dr. Wyant calculated the annual claims filing rate for General Refractories during the 2004-2005 period at 1,110 claims per year. (Id. at 21.)

48. The baseline claims rate calculated for HARBISON-WALKER and for General Refractories (845 and 1,110 claims per year, respectively) (Sept. 15, 2006, Wyant Rept., at 21.) are thus similar to the range of baseline claims rates that Dr. Wyant calculated for APG (482-1,084 claims per year). (Oct. 17, 2006, Wyant Report at 3.)

49. Dr. Denise Martin was retained by Travelers and other objecting insurers to criticize Dr. Wyant's report. Although she has prepared silica forecasts for other clients, Dr. Martin did not prepare a forecast for APG. (Oct. 26, 2006, Confirm. Hrg. Tr., at 232.)

50. Dr. Martin criticized Dr. Wyant's "high end" estimate of future claims, contending that the estimate was based upon inclusion of claims reflected by supplemental information forms submitted to the Debtors which should not have been considered. Specifically, Dr. Martin asserted that Dr. Wyant should not have considered any current claim where the diagnosis of the claimant's silica-related disease was made by one of the doctors or facilities that were criticized by Judge Janice Jack in the federal multi-district silica litigation in her June 30, 2005, opinion, and who were banned thereafter by the Manville Asbestos Trust. (Sept. 29, 2006, Rebuttal Rept. of Dr. Denise Neumann Martin, GIT Doc. No. 6720 (hereafter "Martin Rebuttal Rept."), at 6 -7.)

51. Dr. Martin next criticized Dr. Wyant for including in his analysis current claims where the diagnosis of silica-related disease was made either by Dr. Dominic Gaziano or Dr. Jay Segarra, whom Dr. Martin considered "discredited." (Martin Rebuttal Rept., at 6.) In fact, these two doctors have not been "discredited," and their reports were being accepted by the Manville Trust at the time of the confirmation hearing in this case. (Oct. 26, 2006, Confirm. Hrg. Tr., at 239.)

52. Dr. Martin also criticized Dr. Wyant for considering current claims where the claimant had either filed a claim with the Manville Asbestos Trust, had ever had an asbestos related diagnosis, or had cast a vote with respect to the APG Asbestos Trust. (Martin Rebuttal Rept. at 8.) Dr. Martin referred to such claimants as asserting "recycled asbestos claims" and, based upon asserted medical evidence that it is unlikely for an individual to have both asbestosis and silicosis, she assumed that such a claimant could not have a valid silica-related claim, (Martin Rebuttal Rept., at 7-8), while acknowledging that "the dual occurrence of asbestosis and silicosis is a clinical rarity," (id. at 7) "it is theoretically possible to have combined disease consisting of asbestosis and silicosis" and that she herself recall at least "no more than a dozen or so individuals who have had combined asbestosis and silicosis." (Id.)

53. Dr. Martin's criticisms regarding which claimants were considered by Dr. Wyant do not undermine the validity of Dr. Wyant's conclusions. With respect to those claimants diagnosed by a doctor or facility criticized by Judge Jack, Dr. Wyant made "adjustments to reflect possible additional future reductions in filing rates stemming from the Judge Jack decision." (Sept. 15, 2006, Wyant Rept., at 23-25.) Dr. Wyant went on to say that:

if a substantial fraction of the remaining claims for which the lawyers in the past obtained diagnoses from the Judge Jack doctors consistently fail to prevail in the tort system, the lawyers may become even more selective and reduce their filing rates in the
future. We can estimate the extent to which that might happen by (1) calculating the percentage of present claimants who were diagnosed by a Judge Jack doctor, and (2) reducing the annual claims filing rate going forward in time by that same percentage.

Id. at 25. Dr. Wyant set out some calculations and concluded with "This is a liberal reduction in the sense that it assumes that none of the past claims involving these doctors originated from a genuine case of silicosis, which is unlikely to be the case." Id.

54. Dr. Wyant also demonstrated that there was not a statistically valid basis for excluding from his analysis all claimants who had previously been diagnosed with an asbestos-related disease, filed a claim with the Manville Asbestos Trust, or cast votes with respect to the APG Asbestos Trust. Dr. Martin herself conceded that she did not know whether any of the individuals at issue who submitted supplemental claim forms actually had an asbestos-related disease. (Oct. 26, 2006, Confirm. Hrg. Tr., at 237.) Moreover, as Dr. Wyant testified, there is no prohibition in the tort system which would preclude an individual from filing claims asserting both asbestos- and silica-related diseases, it is medically possible to have both diseases (a conclusion that Dr. Martin did not disagree with; see ¶ 52) , and doctors for some present claimants have diagnosed both. (Oct. 17, 2006, Wyant Rept., at 20-21.)¹⁴

14 The Court of Appeals noted in its remand opinion the insurers' argument that the Manville Personal Injury Trust had found that certain doctors generated a high volume of inaccurate diagnoses and many of the silica claimants in GIT were diagnosed by these Manville doctors, many silica claimants were diagnosed by doctors discredited by the court in In re Silica Products Liability Litig., 398 F.Supp.2d 563, 622 (S.D.Tex.2005), and over half the claimants had either been diagnosed with asbestos disease or had filed asbestos claims against another trust or both. The Court of Appeals concluded that the silicosis diagnosis was suspect as there is "extreme improbability of persons having both silicosis and asbestosis." GIT remand opinion, 645 F.3d at 207, n.16. However, the experts agreed that it is medically possible and Dr. Martin had seen patients with both diseases. We note that under the Silica TDP no payment may be made to a Silica Trust Claimant who previously submitted a claim to the APG Asbestos Trust but such a claimant is permitted to seek Individual Review (TDP §5.3(b)) if the claimant believes that recovery from both trusts is appropriate. TDP §2.1. The Silica Trustee may determine on a case-by-case basis whether to permit the claimant to submit a claim if the claimant meets the Medical/Exposure Criteria under the Silica Trust. Id.
The Court of Appeals noted that this Court made no findings with respect to the legitimacy of current silica claims. However, in accepting Dr. Wyant's estimate of present and future silica claims and the amount of funding needed to satisfy the valid claims, this Court has considered the likelihood that some claims will not meet the medical criteria and will not be paid by the Trust. That component is a necessary element of the estimation this Court is required to make.
Moreover, in the context of the need for a silica trust, as is the case with respect to asbestos claims in the context of §524(g) trusts, the validity of all claims is left to the trust to establish in accordance with its guiding principles. The §105 injunction and plan confirmation processes are not claims allowance procedures. This Court's charge is to determine whether a trust vehicle and its execution procedures are appropriate. See ¶¶ 10104 and note 19, infra. See also Doc. No. 5427, APG Silica TDP. The TDP also addresses the Court of Appeals' concerns about the doctors criticized and/or disqualified by the Manville Trust and in In re Silica Products Liability Litig., 398 F.Supp.2d 563, 603 (S.D. Tex.2005). Id. (TDP § 5.7(a)(2) requires "a diagnosis by a physician shown to have previously qualified (and never disqualified) as a medical expert with respect to the silicarelated disease in question before a state or federal judge." It also requires that evidence satisfies the Medical/Exposure Criteria and other evidentiary requirements of the Silica TDP. Furthermore, "If a physician's credibility and/or honesty has been judicially criticized, the APG Silica Trust shall not accept any report, finding or opinion from any such physician, and the claim shall be deemed deficient unless other submissions, not relying in any way on the unacceptable physician, is sufficient to evaluate the claim. Irrespective of the sufficiency of submissions, any claim involving an unacceptable physician shall require an audit under 5.8.(a)." See Section 5 of the TDP regarding resolution of Silica Trust Claims, including medical and exposure criteria and silica claims processing.

55. Dr. Wyant's testimony also demonstrated that Dr. Martin's criticisms of his methodology were unwarranted. Dr. Wyant utilized epidemiology in his estimation analysis, testing his calculations against multiple forecasting models used by multiple experts and taking into account the epidemiology of those models. (Oct. 17, 2006, Wyant Rept., at 22-24.) Dr. Wyant further used well accepted statistical models to summarize and interpret data. (Id., at 5-6.) Finally, with respect to silicosis incidence rates, the study relied upon by Dr. Wyant was demonstrated to be generally accepted, and, in fact, has been cited by OSHA in its consideration of silica-related diseases. (Id. at 10-13.)

IV. EVENTS LEADING TO CHAPTER 11 FILINGS

56. Beginning in the 1970s, one or more of the Debtors began to be named as a defendant in numerous personal injury products liability lawsuits arising out of the manufacture, sale and/or installation of asbestos-containing refractory materials (the "Asbestos Litigation"). The lawsuits typically named as defendants manufacturers, sellers or installers of asbestos-containing products, including the Debtors. (Allegretti Decl., ¶ 16(b).)

57. The asbestos litigation was tremendously expensive to defend, and had become increasingly difficult to settle within the traditional tort recovery system. Certain plaintiffs' attorneys, primarily but not exclusively in Texas and Mississippi, made inflated settlement demands and certain state courts, primarily but not exclusively in the same two states, established multiple plaintiff trial settings in multiple courthouses simultaneously. High transaction costs, coupled with these sharply increasing settlement demands, threatened the Debtors' long-term financial health and left them with no alternative means of determining the merits of, and resolving, the asbestos claims brought against them. (Id., ¶ 16(d).)

58. Immediately prior to the Petition Date, the Debtors experienced a marked increase in settlement demands and multiple plaintiff trial settings; the high costs of the asbestos litigation affected efforts to obtain financing, and distracted management, among other effects. (Id., ¶¶ 16(e), 16(f).)

59. The Debtors could not continue to meet the threat to their financial health posed by the asbestos litigation. Accordingly, the Debtors determined that a restructuring under Chapter 11 was the only viable means of determining and resolving their asbestos liability and of preserving the value of the Debtors' business enterprise and its ongoing prospects. (Id., ¶ 16(g).)

60. The Debtors sought protection under Chapter 11 of the Bankruptcy Code as a result of adverse business conditions and also to deal with the overwhelming number of asbestos liability lawsuits and claims pending against them, in order to preserve dwindling insurance coverage and to prevent irreparable harm to current business operations. (Id., ¶ 16(h).)

61. A number of business conditions compounded the financial difficulties that led to the bankruptcy filing by GIT and a number of GIT-Affiliated Debtors on or after February 14, 2002. First, the costs of asbestos litigation for the GIT Debtors (including HARBISON-WALKER and APG) rose dramatically from 2000 to early 2002. Second, a recession and deterioration of general business conditions, especially within the steel industry culminated in decreased sales, the bankruptcies of large customers, and reduced cash flows. Third, commencing in the fall of 2001, the Debtors were unable to secure working capital financing. (Id., ¶ 5.)

V. OVERVIEW OF THE GIT PLAN

A. Summary of Major Plan Provisions

62. The Debtors have filed the GIT Plan. The Debtors assert, id., ¶ 7, and the court finds that the GIT Plan offers the best possible recovery to holders of Claims and Demands against the Debtors when compared to all reasonably available alternatives.

63. We agree with Mr. Allegretti, id., ¶ 8, that the GIT Plan provides a method for the equitable payment of Claims against the Debtors, including the establishment of an APG Asbestos Trust and an APG Silica Trust.

64. The GIT Debtors will be reorganized into an affiliate group, which will be 100% owned by an entity referred to herein as Reorganized ANH. The affiliate group will include the GIT Reorganized Debtors, as well as Reorganized HARBISON-WALKER and Reorganized APG. (Id., ¶ 8.)

65. The GIT Plan provides for the establishment of an APG Asbestos Trust for the payment of APG Asbestos Trust Claims and APG Asbestos Demands. The GIT Plan provides that the APG Asbestos Trust will be funded with 21% of the shares of Reorganized ANH common stock, and proceeds of certain insurance settlements. It is anticipated that APG Asbestos Trust Claims and APG Asbestos Demands will be paid a percentage (to be established pursuant to the APG Asbestos Trust Distribution Procedures ("TDP")) of the matrix values established pursuant to the APG Asbestos TDP. (Id., ¶ 39.)

66. As a result of certain agreements reached with DII Industries, LLC ("DII"), a successor to Dresser Industries, Inc., all HARBISON-WALKER Asbestos Trust Claims and HARBISON-WALKER Silica Trust Claims have been channeled to certain trusts created in the Mid-Valley bankruptcy case. (Id., ¶ 11.)

67. The GIT Plan provides for establishment of an APG Silica Trust for payment of APG Silica Trust Claims and APG Silica Demands. All APG Silica Trust Claims and APG Silica Demands will be channeled to the APG Silica Trust, which will be funded with proceeds of certain insurance settlements and rights to receive insurance proceeds under certain insurance policies. (Id., Allegretti Supplemental Declaration, Doc. No. 10700, at ¶ 16 (hereafter "Allegretti Supp. Decl.") ("Having reviewed Mr. Nystrom's expert report, I conclude that there BAS been no material change in the sources of funding available to Reorganized ANH post-bankruptcy.")) B. Settlement Agreements

68. The GIT Plan incorporates several settlement agreements including, but not limited to: (a) the GIT/DII Settlement Agreement; (b) the GIT/RHI AG Settlement Agreement; and (c) that certain settlement agreement between the Debtors, RHI Holding, and the Pension Benefit Guaranty Corporation, dated as of April 28, 2006, (the "PBGC Settlement") which together with the settlements set forth in subsections (a) through (c) are collectively referred to as the "Settlements." Declaration of Guenter Karhut dated May 23, 2006, Doc. No. 6031, (hereafter "Karhut Decl.," ¶ 2.)

69. The Settlements are proposed in good faith and are in the best interests of the Debtors' bankruptcy estates. (Id., ¶ 28.)

70. The Debtors provided notice of the Settlements in compliance with Rules 2002 and 9019 of the Federal Rules of Bankruptcy Procedure. (Id., ¶ 29.)

71. The Settlements are fair and equitable and a proper exercise of the Debtors' business judgment because they enable the Debtors to consummate the GIT Plan and to reorganize their business operations, while at the same time avoiding complex, expensive and protracted litigation with uncertain outcomes that could cripple the Debtors' ability to reorganize. (Id., ¶ 30.)

72. The Settlements are proposed in good faith with the legitimate and honest purpose of settling disputes between the Debtors and various parties, reorganizing the business affairs of the Debtors, and maximizing the returns to the Debtors' creditors. (Id., ¶ 31.)

73. The Settlements represent the parties' extensive arms-length negotiations concerning the agreements contained therein over the course of the Debtors' reorganization process. (Id., ¶ 32.)

74. In particular, the RHI AG Settlement and the PBGC Settlement are the result of extensive arms-length negotiations between the parties and their respective outside counsel over a four-year period. The terms of the Settlements are reasonable, fair and equitable, particularly in light of the substantial benefits that will inure to the estates as a result of the RHI Contributions (as defined below) that will be made pursuant to the RHI AG Settlement. (Id., ¶ 33.)

75. The Settlements resolve substantial impediments to the emergence of the Debtors from bankruptcy. Litigation over the issues in the various Settlements would be costly and protracted, would delay confirmation of the Plans and distributions to creditors, and would pose risks to the Debtors' bankruptcy estates in the event unfavorable results are reached. (Id., ¶ 34.) C. The APG §524(g) Asbestos Trust.

76. At the time of the filing of the bankruptcy petitions, APG (and its subsidiary APG Services) had almost 300,000 asbestos bodily injury cases pending. Pursuant to the Plan, an asbestos trust is to assume the asbestos bodily injury liabilities of APG with respect to any present or future actions seeking recovery of damages or other relief caused by exposure to asbestos or asbestos-containing products. (Allegretti Decl., ¶ 38.)

77. The GIT Debtors are likely to be subject to substantial future Demands for payment arising out of the same or similar conduct or events that gave rise to these Claims. (Id., ¶ 39.)

78. It is impossible to determine with precision the actual amounts, numbers and timing of such future Demands for payment with respect to asbestos-related bodily injury claims. (Id., ¶ 40.)

79. Under the GIT Plan, the APG Asbestos Trust is partially funded by 21% of the securities of Reorganized ANH, id. at ¶ 10, which is convertible at any time to 51% of the securities of Reorganized APG. All of the voting shares of Reorganized ANH will be owned by the NARCO Asbestos Trust and the APG Asbestos Trust. (Id., ¶ 41.)

80. Without adoption of the GIT Plan and the treatment of APG Asbestos Claims as proposed in the GIT Plan, and without an injunction channeling such claims to the APG Asbestos Trust, neither the GIT Debtors nor the GIT Plan could deal equitably with APG Asbestos Claims and Demands. (Id., ¶ 42.)

81. The terms of the injunctions proposed to be issued under 11 U.S.C. §524(g)(1)(A) are set out in Section VII of the Combined Disclosure Statement. (Id., ¶ 43.) The terms are incorporated herein by reference.

82. A centerpiece of the GIT Plan is the APG Asbestos Trust. The APG Asbestos Trust will be funded primarily by cash contributions from the APG Settlement Fund. The APG Settlement Fund consists of proceeds from the settlements of certain insurance policies that previously have been approved by the Court. (May 22, 2006, Affidavit of Lawrence Fitzpatrick in Support of GIT Plan (hereafter "Fitzpatrick Aff. (GIT)"),(GIT Doc. No. 6010, ¶ 11.)

83. The GIT Plan also provides for a channeling injunction for asbestos-related claims. Pursuant to the Channeling Injunction, any party who now or in the future may hold or assert an APG Asbestos Trust Claim or APG Asbestos Demand against the Debtors, the Debtors' affiliates or other GIT Protected Parties¹⁵ identified by the GIT Plan shall be permanently stayed, restrained and enjoined from taking any action against entities protected by the §524(g) injunction for the purpose of directly or indirectly recovering or receiving satisfaction with respect to such APG Asbestos Trust Claim or APG Asbestos Demand. (Id., ¶ 13.)

15 See Doc. No. 5293, Disclosure Statement, Exhibit 1, definition of "GIT Protected Parties." GIT Protected Parties are defined as follows:

(i) GIT (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands);

(ii) GIT-AffiliatedDebtors (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands);
(iii) the Reorganized Debtors under the NARCO Plan and the GIT Plan (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands);
(iv) any Subsidiary of the Reorganized Debtors under the NARCO Plan and the GIT Plan, including without limitation Corrosion 1P Corp., Corrosion Technology International Services Company, Corrosion Technology International, Inc., Corrosion Technology Chile S.A, Indresco Jeffrey Industria e Commercio Ltda., Construcciones Refractarias Resca SA, Global-GIX Canada Inc., 1086215 Ontario Inc., Polymer Pipe Technology, Inc., Harbison-Walker Refractories Limited, Liptak Bradley Limited, CTI Europe N.Y., CTI Pacific Chusik Hoesa, CTI Pacific Pty. Limited, GIX Pty. Ltd., PT Harbison-Walker, AP. Green de Mexico S.A. de C.V., S.A., Zircoa, Inc., NAR Export Sales Ltd., and RHI America Receivables Corporation (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica 'trust Claims and APG Silica Demands);
(v) Bigelow-Liptak Corporation (with respect solely to APG Asbestos Trust Claims and APG Asbestos Demands arising out of, resulting from, or attributable to asbestos-containing products manufactured, installed, fabricated, sold, supplied, produced, designed, distributed or in any way at any time marketed or disposed of by an APG Debtor under the "Bigelow-Liptak" name or any form thereof prior to February 1, 1989);
(vi) The Stebbins Engineering And Manufacturing Company (with respect solely to APG Asbestos Trust Claims and APG Asbestos Demands arising out of, resulting from, or attributable to asbestos-containing products manufactured, installed, fabricated, sold, supplied, produced, designed, distributed or in any way at any time marketed or disposed of by an APG Debtor under the "Bigelow-Liptak" name or any form thereof prior to February 1, 1989);
(vii) The RHI AG Entities (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands);
(viii) any Entity, including, but not limited to, the APG Services Settled Insurers, that has provided insurance to GIT, any of the GIT-Affiliated Debtors, the Reorganized Debtors for APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims or APG Silica Demands and that, by agreement, is a contributor, directly or indirectly, of the proceeds from such insurance to the APG Asbestos Trust or the APG Silica Trust (but only with respect to the APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims or APG Silica Demands for which the insurance was provided);
(ix) any Entity that, pursuant to the GIT Plan or after the Effective Date becomes a direct or indirect transferee of, or successor to any assets of GIT, any of the GIT-Affiliated Debtors, the Reorganized Debtors, the APG Asbestos Trust .or the APG Silica Trust, (but only to the extent that liability for APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims or APG Silica Demands is asserted to exist by reason of it becoming such a transferee or successor):

(x) any Entity that, pursuant to the GIT Plan or after the Effective Date, makes a loan to any of the Reorganized Debtors, the APG Asbestos Trust, the APG Silica Trust or to a successor to, or transferee of, any assets of GIT, any of the GIT-Affiliated Debtors, the Reorganized Debtors, the APG Asbestos Trust, or the APG Silica Trust (but only to the extent that liability for APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims or APG Silica Demands is asserted to exist by reason of such Entity becoming such a lender or to the extent any pledge of assets made in connection with such a loan is sought to be avoided or impaired, based upon the assertion of an APG Asbestos Trust Claim, APG Asbestos Demand, APG Silica Trust Claim or APG Silica Demand);
(xi) any present or former officer, director or employee of GIT, any of the GIT-Affiliated Debtors or the Reorganized Debtors to the extent he or she is alleged to be directly or indirectly liable for APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims or APG Silica Demands based on the conduct of GIT, the GIT-Affiliated Debtors, or the Reorganized Debtors or by reason of his or her service as a present or former officer, director or employee of GIT, any of the GIT-Affiliated Debtors, or the Reorganized Debtors;
(xii) the NARCO Asbestos Trust (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands), the APG Asbestos Trust (with respect to APG Silica Trust Claims and APG Silica Demands) and the APG Silica Trust (with respect to APG Asbestos Trust Claims and APG Asbestos Demands);
(xiii) Brickyard Development Partners LP, Empresa de Refractorios Colombianos, SA., and Materiales Industriales, S.A. (with respect to APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims and APG Silica Demands); or
(xiv) as of December 23, 2005, the GIT Protected Parties include, but are not limited to, the parties listed [an Exhibit; see Doc. No. 5293-1 at Exhibit A].
Notwithstanding the foregoing, for avoidance of doubt, the term GIT Protected Party shall not include U. S. Gypsum Corporation or any of its Subsidiaries or Affiliates as of the Effective Date of the GIT Plan.

84. In addition to protecting the APG Debtors, the GIT Asbestos Channeling Injunction permanently enjoins the assertion of APG Asbestos Trust Claims and related litigation against the following affiliates and former affiliates of the APG Debtors, to the limited extent that the asbestos-related liability of these affiliates is based on their relationship with the Debtors: (a) all affiliated Debtors in the GIT bankruptcy cases and the NARCO bankruptcy cases; (b) the RHI AG Entities, which have agreed to the cancellation of equity interests in the Debtors and to waive approximately $608 million in claims against the Debtors under the RHI AG Settlement; and (c) Bigelow-Liptak Corporation and Stebbins Engineering and Manufacturing Company, successors to certain assets of the Debtors, that have entered into Court-approved settlement agreements with the Debtors. The GIT Channeling Injunction also enjoins the assertion of APG Asbestos Trust Claims against those insurers of the Debtors who, pursuant to Court-approved settlements, have agreed to provide funding to the APG Asbestos Trust. (Id., ¶ 14. See also Karhut Decl., ¶ 10.) Those insurers are identified in Schedule E to the GIT Plan and incorporated herein by reference. See Doc. No. 5427-8 (Exhibit E-1 to GIT Plan).

85. In each of the settlements between the Debtors, their affiliates, former affiliates and insurers, the non-Debtor parties have provided or agreed to provide substantial consideration to or for the benefit of the APG Asbestos Trust in return for the protections to be provided by the APG Asbestos Channeling Injunction. Extending the APG Asbestos Channeling Injunction for those affiliates and former affiliates of the APG Debtors who are not parties to such settlements is appropriate in the context of these cases because, absent such protection, the potential prosecution of APG-related claims against the affiliates could embroil the Reorganized Debtors and the APG Asbestos Trust in litigation and cause them to incur costs that ultimately may diminish the assets available to the holders of APG Asbestos Trust Claims and holders of APG Asbestos Demands. (Fitzpatrick Aff. (GIT), ¶ 15.)

86. The Debtors likely would be subject to substantial numbers of APG Asbestos Claims and Demands in the absence of the APG Asbestos Channeling Injunction. If prosecution of APG Asbestos Trust Claims continued outside the procedures proposed in the GIT Plan, such prosecution would threaten the equitable treatment of such claims and demands. Absent the APG Asbestos Trust and the APG Asbestos Channeling Injunction, holders of APG Asbestos Trust Claims would be forced to litigate their claims in the tort system and would have access only to the limited, dwindling funds of the APG Debtors with respect to any recovery on such claims. Furthermore, without the APG Asbestos Channeling Injunction, holders of APG asbestos claims would be subject to a "race to the courthouse," whereby APG's assets would be consumed by those claimants who first filed suit, leaving nothing for the future APG claimants. (Id., ¶ 16.)

87. The APG Asbestos TDP provide rules that the APG Trust will use to receive, process and, if valid, pay APG Asbestos Trust Claims. The processes set forth in the APG Asbestos TDP provide a reasonable assurance that the APG Asbestos Trust will value and be in a financial position to pay present APG Asbestos Trust Claims and future APG Asbestos Demands that involve similar claims in substantially the same manner. (Id., ¶ 17.)

88. Requiring evidence that will satisfy the exposure and disease criteria set forth in the APG Asbestos TDP is the principal mechanism by which frivolous claims and meritorious claims, and more and less serious claims, will be distinguished. The exposure and disease criteria in the TDP are at least as strict as the evidentiary standards that generally must be met to recover in the tort system. The criteria are as stringent as the criteria employed by other currently operating asbestos settlement trusts, if not more so. (Id., ¶ 18.)

89. After the Liquidated Value of a meritorious APG Asbestos Trust Claim is determined by the APG Asbestos Trust, the claimant will receive a pro rata share of that Liquidated Value based upon the Payment Percentage that shall be set for such claims. Given the magnitude of the Debtors' asbestos-related liability and the value of the assets available to the APG Asbestos Trust, the APG Asbestos Trust likely will be able to pay holders of APG Asbestos Trust claims and demands only a percentage of the liquidated value of their claims. However, the initial Payment Percentage has not yet been established. After the Effective Date, the APG Asbestos Trustee, with the consent of the Trust Advisory Committee and the APG Asbestos Futures Claimants' Representative, will establish the initial Payment Percentage. The APG Asbestos TDP require the APG Asbestos Trustee to reconsider the Payment Percentage at least once every three years to assure that it is based on accurate and current information. (Id., ¶ 19.)

90. The proposed trustee of the APG Asbestos Trust is Martin J. Murphy. (June 21, 2006, Notice of Proposed Directors, Trustees and Trust Advisory Cmte. Members (GIT Doc. No. 6245, ¶ 3; Doc. No. 10697, ¶ 1.) D. The APG Silica Trust

91. The Debtors and the other constituencies that support the GIT Plan seek an order pursuant to §§105 and 1123(b)(6) of the Bankruptcy Code that shall permanently stay, restrain and enjoin all Entities which have held or asserted, which currently hold or assert, or which may in the future hold or assert any APG Silica Trust Claim or APG Silica Demand from taking any action for the purpose of directly or indirectly collecting, recovering or receiving payments, satisfaction or recovery with respect to any such Claim or Demand against the GIT Protected Parties. (Allegretti Decl., ¶ 44.)

92. One of the primary effects of the GIT Plan is to resolve the liability for all APG Silica Trust Claims by channeling them to the APG Silica Trust. Pursuant to the terms of the GIT Plan, in exchange for the APG Silica Trust Assets to be transferred to the APG Silica Trust, the APG Silica Trust will assume and be responsible for all liability for, and payment of, APG Silica Trust Claims. All APG Silica Trust Claims will be resolved pursuant to the terms, provisions, and procedures of the APG Silica Trust, the APG Silica Trust Agreement, and the APG Silica TDP. Pursuant to § 105 of the Bankruptcy Code, an APG Silica Channeling Injunction will enjoin holders of APG Silica Trust Claims and APG Silica Demands from pursuing their claims against the GIT Protected Parties. (May 23, 2006, Declaration of Philip Pahigian (hereafter "Pahigian Decl."), (GIT Doc. No. 6016, ¶ 10.)

93. It is likely that the Debtors will be subject to a substantial number of future APG Silica Demands for payment arising out of past conduct that has created or will create liability for silica-related personal injuries. Although the precise number, timing, and actual amount of future claims cannot be calculated with precision, the likelihood of numerous future claims is probable. (Pahigian Decl., ¶ 15; Oct. 17, 2006, Wyant Rept., at 4.)

94. The GIT Plan is fundamentally fair and equitable to holders of APG Silica Demands. Specifically, the GIT Plan, the APG Silica TDP, and the APG Silica Trust Agreement provide for mechanisms, including but not limited to structured, periodic, or supplemental payments, pro rata distributions, matrices, periodic review of estimates of the numbers and values of APG Silica Trust Claims and APG Silica Demands, and periodic adjustment of the payment percentage, which provide reasonable assurance that the APG Silica Trust will value, and be in a financial position to pay all or some portion of the value of similarly situated APG Silica Trust Claims and APG Silica Demands in substantially the same manner. (Pahigian Decl., ¶ 18.)

95. In the absence of the formation of a silica personal injury trust and the channeling of APG Silica Trust Claims and APG Silica Demands to such a trust, present holders of APG Silica Trust Claims will pursue such claims in the tort system, which does not require similar treatment of APG Silica Trust Claims and APG Silica Demands, and does not provide for funding for payment on account of APG Silica Demands in any amount. (Id., ¶ 19.)

96. The purposes of the APG Silica Trust are: (a) to assume all liabilities of the APG Entities with respect to APG Silica Trust Claims and APG Silica Demands; (b) to use its assets and income to pay holders of valid APG Silica Trust Claims in accordance with the APG Silica TDP in such a way that such holders are treated fairly, equitably and reasonably in light of the assets available to satisfy the claims and demands; and (c) to comply with the Bankruptcy Code to the extent it applies to the APG Silica Trust. (Id., ¶ 23.)

97. The APG Silica Trust will be liable for all APG Silica Trust Claims and APG Silica Demands that are channeled by the APG Silica Channeling Injunction to the APG Silica Trust. The GIT Plan contemplates (and it is a condition to the occurrence of the Effective Date thereunder) that the APG Silica Channeling Injunction will be issued to assure that all APG Silica Trust Claims and APG Silica Demands are channeled exclusively to the APG Silica Trust. The assets of the APG Silica Trust will consist of rights to receive approximately $39.3 million in insurance settlement proceeds, and the assignment of the APG Silica Trust Policy Rights. The APG Silica Trust will process all APG Silica Trust Claims pursuant to the APG Silica TDP that are part of the GIT Plan. The GIT Plan, through the APG Silica Trust Agreement and the APG Silica TDP, has established structures to process APG Silica Trust Claims according to specific disease and exposure criteria, and all APG Silica Trust Claims will be resolved and paid pursuant to and in accordance with the APG Silica TDP.¹⁶ Separate disease levels are set forth in the APG Silica TDP, all with separately scheduled values and exposure, occupational, and medical criteria. (Id., ¶ 24.)

16 Section 2.2 of the Silica TDP provides that claims that do not meet the presumptive Medical/Exposure criteria under the expedited review process may elect the Individual Review process and the silica trustee may offer the claimant the scheduled value if the claim would be cognizable in the tort system. There are provisions for binding and non-binding arbitration and resort to the tort system.

98. The contribution of the APG Silica Trust Assets to the APG Silica Trust pursuant to the GIT Plan ensures that the APG Silica Trust will have sufficient capital upon the Effective Date to begin processing APG Silica Trust Claims. Although at this time no value can be assigned to the APG Silica Trust Policy Rights, in light of the other assets being provided to the APG Silica Trust, the GIT Plan is equitable and reasonable in its treatment of holders of APG Silica Trust Claims and holders of APG Silica Demands. (Id., ¶ 25.)¹⁷

17 At the hearing on December 12, 2012, counsel for Debtor stated that although no insurer is objecting to the assignment of rights, some rights are being assigned that have not yet been resolved. See Tr. 12/12/12, Doc. No. 10932, at 10. However, the Silica Trust will receive $39.3 million in insurance settlement proceeds and certain policy rights will be assigned to the trust, id. at 11, and the claim values, as informed by claims made and approved, will be paid going forward, in accordance with the TDP. See also ¶ ¶ 99 - 106 infra.

99. Claims will be valued in accordance with the APG Silica TDP, and as more clarity is achieved regarding the magnitude and characteristics of APG Silica Trust Claims and APG Silica Demands, some portion of the values, based upon the claims themselves, will be paid by the APG Silica Trust. (Id., ¶ 26.)¹⁸

18 Paragraph 2.4 of the Silica TDP says, in part, that if there are insufficient funds to pay the total number of silica trust claims liquidated under the TDP, available funds allocated to the claims will be paid to the maximum "extent to claimants in the group based on their place in their respective FIFO [first-in, first-out] Payment Queue" and carried over to the next year and placed at head of the FIFO queue.

100. Pursuant to the GIT Plan, the GIT Protected Parties will be protected from APG Silica Trust claims and demands by the APG Silica Channeling Injunction. (Id., ¶ 27.)

101. The APG Silica TDP provides rules that the APG Silica Trust will use to receive, process, evaluate, allow or disallow, and pay APG Silica Trust Claims.¹⁹ The APG Silica Future Claimants Representative and his counsel participated in lengthy negotiations concerning the provisions of the APG Silica TDP with the Debtors and counsel for holders of various individual APG Silica Trust Claims. Because paying off present unliquidated APG Silica Trust Claims in amounts in excess of what is fundamentally fair and equitable under the circumstances with the funds that are available could negatively impact recovery by the holders of APG Silica Demands, the APG Silica Future Claimants Representative negotiated the APG Silica TDP to provide reasonable assurance that holders of APG Silica Demands are protected against the general uncertainty of the future and the amount of APG Silica Demands. (Id. , ¶ 28.)

19 To the extent the Court of Appeals expressed concern that silica claims would be suspect because they would be paid on the basis of diagnoses made by "physicians singled out by the Manville Trust for being highly unreliable," 645 F.3d at 207, the TDP provides ample safeguards against such a result. For example, § 5.7 describes evidentiary requirements with respect to disease diagnoses and subsection (a)(2) speaks to credibility of medical evidence:

Medical evidence (i) that is of a kind shown to have been received in evidence by a state or federal judge at trial, (ii) that is consistent with evidence submitted to APG to settle for payment similar disease cases prior to the APG Debtors' reorganization cases, or (iii) a diagnosis by a physician shown to have previously qualified (and never disqualified) as a medical expert with respect to the silica-related disease in question before a state or federal judge, is presumptively reliable, as long as such evidence satisfies the Medical/ Criteria and other evidentiary requirements of this APG Silica TDP, although the APG Silica Trust may seek to rebut the presumption. In addition, claimants who otherwise meet the requirements of this APG Silica TDP for payment of an APG Silica Trust Claim shall be paid without regard to the results of any litigation at anytime between the claimant and any other defendant in the tort system. However, any relevant evidence submitted in a proceeding in the tort system, other than any findings of fact, a verdict, or a judgment, involving another defendant may be introduced by either the claimant or the APG Silica Trust in any Individual Review proceeding conducted pursuant to section 5.3(b) or any Extraordinary Claim proceeding conducted pursuant to section 5.4(a).

If a physician's credibility and/or honesty has been judicially criticized, the APG Silica Trust shall not accept any report, finding or opinion from any such physician, and the claim shall be deemed deficient unless other submissions, not relying in any way on the unacceptable physician, is sufficient to evaluate the claim. Irrespective of the sufficiency of submissions, any claim involving an unacceptable physician shall require an audit under 5.8.

Doc. No. 5427, APG Silica TDP, at 23 - 24 (emphasis added). Section 5.7 of the TDP details exposure evidence requirements and contains arbitration and litigation options.

Section 5.8 of the TDP further provides that if "the APG Silica Trust reasonably determines that any individual or entity has engaged in a pattern or practice of providing unreliable medical evidence to the APG Silica Trust, it may decline to accept evidence from such provider."Id. at 26. In addition, "in the event that an audit reveals that fraudulent information has been provided to the APG Silica Trust, the APG Silica Trust may penalize any claimant or claimant's attorney" by various means.Id.The Trust is also required to "give appropriate consideration to the cost of investigating and uncovering invalid APG Silica Trust Claims so that the payment of valid APG Silica Trust Claims is not further impaired by such processes with respect to issues related to the validity of the medical evidence supporting a APG Silica Trust Claim."Id. at § 7.2 at 30.

102. The APG Silica TDP furthers the goal of treating all beneficiaries of the APG Silica Trust equitably by setting forth procedures for processing and paying APG Silica Trust Claims generally on an impartial, first-in, first-out basis, with the intention of paying all holders of allowed APG Silica Trust Claims over time as equivalent a share as reasonably practicable of the value of their APG Silica Trust Claims, based on historical values for substantially similar claims. To this end, the APG Silica TDP establishes a schedule of silica related diseases, each of which has specific medical, occupational and exposure criteria, and specific values. (Id., ¶ 29.)

103. The medical, occupational and exposure criteria in the APG Silica TDP are the principal mechanisms to distinguish between claims with, and claims without, merit, and serious and less serious claims. The values established by the APG Silica TDP are consistent with the settlement values paid to silica-related disease claimants with comparable injuries. The APG Silica TDP is fair and equitable and ensures that holders of APG Silica Demands will be treated in substantially the same manner as holders of similar current APG Silica Trust Claims. (Id., ¶ 30.)²⁰

20 See note 21 and accompanying text, infra. See also Doc. No. 5427, Exch. D, Silica TDP at §5.3.(a)(3) and n.3 thereto.

104. After an APG Silica Trust Claim is determined by the APG Silica Trust to be meritorious, the claimant will receive a pro rata share of the value of his or her claim based on a Payment Percentage (as defined in the APG Silica TDP). Although no initial Payment Percentage has been established at this time, the procedures that have been detailed in the APG Silica TDP are designed to ensure that the holders of APG Silica Trust Claims and holders of similar APG Silica Demands receive substantially similar treatment throughout the duration of the APG Silica Trust. The procedures that have been detailed in the APG Silica TDP will ensure that the holders of APG Silica Trust Claims and the holders of similar APG Silica Demands receive substantially similar treatment throughout the duration of the APG Silica Trust. (Id., ¶ 31.)²¹

21 To ensure that this occurs §2.3 of the Silica TDP provides for application of a payment percentage for Silica Trust Claims and §4 addresses periodic estimates and computation of the payment percentage. Application of the payment percentage is addressed in further detail in §5.1, Ordering, Processing, and Payment of Claims, and §5.12, Payment Percentage.

105. All APG Silica Trust Claims and all APG Silica Demands allowed by the APG Silica Trust will be paid from the APG Silica Trust based on the Payment Percentage set by the APG Silica Trustee and approved by the APG Silica Future Claimants' Representative and the APG Silica Trust Advisory Committee (the "APG Silica TAC"), but they will be paid through the APG Silica Trust exclusively. (Id., ¶ 32.)

106. The proposed trustee for the APG Silica Trust is Anne M. Ferazzi. (Amended Notice of Proposed Directors, Trustees, and Trust Advisory Committee Members, GIT Doc. No. 10697.)

107. Channeling the APG Silica Claims and all future APG Silica Demands in connection with first exposures prior to February 14, 2002, the Petition Date, to the APG Silica Trust, along with the related APG Silica Channeling Injunction, will allow Reorganized ANH to operate without having to spend resources on defending the channeled claims and demands. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶¶ 11 & 12.)²²

22 Claims on and after the petition date are not channeled. See Doc. No. 7819, October 25, 2007, Technical Amendments, §12.11; Doc. No. 7827, Composite Plan Documents, §4.2.3(c).

108. Assuming: (a) the GIT Plan were to be confirmed without the APG Silica Trust and all APG Silica Trust Claims and Demands were to pass through its Chapter 11 case; (b) one half of the existing APG Silica Trust Claims cases were resolved in each of the first and second years following confirmation of the GIT Plan; (c) the average settlement value for those APG Silica Trust Claims were $4,700 per claim; (d) defense costs for each of those APG Silica Trust Claims were thirty percent (30%) of settlement value; and (e) new Claims are filed at the midpoint of the annual range predicted by Dr. Wyant, the evidence shows that the Reorganized ANH would face silica Claims of approximately $11.66 million in the first year following the Effective Date, approximately $11.66 million in the second year following the Effective Date, and approximately $4.58 million in the third year following the Effective Date. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 23.)

109. Based on the assumptions in Dr. Wyant's reports, if the GIT Plan were confirmed without the APG Silica Trust, the evidence shows that APG's total silica liability over the time frame covered by Dr. Wyant's report is estimated at approximately $117 million. (Id., ¶ 24.)

110. APG does not have sufficient free cash flow, insurance assets or borrowing availability to discharge silica-related personal injury claims in the number and amounts described in paragraphs 108 and 109 above. (Id., ¶ 26.) (Allegretti Supp. Decl., ¶ 15).

111. Channeling APG Silica Claims and Demands to the APG Silica Trust is necessary to insure the long-term viability of Reorganized ANH, as Reorganized ANH does not have sufficient free cash flow, borrowing availability, or insurance assets to discharge those claims in the tort system. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 14.) (Allegretti Supp. Decl. ¶¶ 15, 16).

112. Because of the capital-intensive nature of the Debtors' business, the age and condition of their industrial plants, the ever-increasing competition the Debtors face from larger and financially stronger competitors, the continuing advances in technology that lead to longer refractory life, the volatility of the markets that their customers serve, and the fact that the Debtors have a unionized workforce that seeks competitive wages and post-employment benefits, it is unlikely that the free cash flow of Reorganized ANH will increase significantly in the several years following exit from Chapter 11. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 30.)

113. APG will not have sufficient free cash flow to discharge its liability for silica-related personal injury claims in the tort system. (Id., ¶ 31; Oct. 26, 2006, Confirm. Hrg. Tr., at 205-207.)

114. The proposal letter for exit financing the Debtors received from J.P. Morgan Chase Bank, N.A. and J.P. Morgan Securities, Inc., dated October 18, 2005, (the "Original Chase Letter"), contains several limitations that would prevent the proceeds from any borrowing thereunder to pay silica related claims. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶¶ 32, 33.) The exit financing provisions have been extended, the latest by Chase letter dated October 18, 2012. See Second Supplemental Declaration of Jon A. Allegretti, GIT Doc. No. 10949, ¶¶ 4-6 (hereafter "Second Supp. Allegretti Decl.") See also ¶ 118, infra.

115. The Debtors may only use the proceeds of the exit facility in the ordinary course of the Debtors' business. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 33; Second Supp. Allegretti Decl. at ¶¶ 4-6.)

116. The Debtors may not use the proceeds of the exit facility to pay prepetition claims other than claims disclosed in the GIT Plan. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 33; Second Supp. Allegretti Decl. at ¶¶ 4-6.)

117. A material judgment entered against the Reorganized ANH in the tort system on account of a silica-related claim would be an Event of Default allowing the Lender to execute remedies and putting Reorganized ANH at risk of failure. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 34.)

118. The Original Chase Letter has been extended/renewed several times in substantially the same form. Under the provisions of the current Chase commitment letter, dated October 18, 2012, (the "Current Chase Letter") the findings of paragraph 114 through 117 remain accurate. (Second Supp. Allegretti Decl. at ¶¶ 4-7.)

119. Reorganized ANH cannot rely on insurance coverage to resolve APG's silica liability immediately after confirmation because coverage with the insurers is disputed. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 36.) See also Tr. 12/12/12, Doc. No. 10932, at 10, and note 17, supra.

120. The insurance settlement agreements and related orders do not indicate that the insurance proceeds would be available to the Reorganized ANH to pay silica claims without the creation of the APG Silica Trust. (Id., ¶ 39.)

121. Although they no longer object to formation of the silica trust in conjunction with the original confirmation order, Certain Insurers retained Daniel Dooley to express an opinion that APG financially did not need a silica trust.

122. Assuming that the 1,025 claims diagnosed by Dr. Gaziano and the 247 claims diagnosed by Dr. Segarra are included in the number of present and future silica claims against APG, and assuming that the proceeds of the insurance settlement agreements are still available to Reorganized ANH in the absence of the APG Silica Trust, Mr. Dooley conceded that Reorganized ANH will experience a cumulative impact over the three years after the Effective Date of the Plan of negative $22.7 million for silica claims. (Oct. 26, 2006, Confirm. Hrg. Tr., at at 292-93.)

123. Assuming that: (a) the claims diagnosed by Drs. Gaziano and Segarra are included in the number of present and future silica claims against APG; (b) 15% of the claims diagnosed by a Judge Jack doctor are re-diagnosed and refiled against Reorganized APG; and (c) the proceeds of the insurance settlement agreements are still available to Reorganized ANH in the absence of the APG Silica Trust, Mr. Dooley conceded that Reorganized ANH will experience a cumulative impact over the three years after the Effective Date of the Plan of negative $32 million due to silica claims against APG. (Id. at 295-97.)

124. Assuming that: (a) the claims diagnosed by Drs. Gaziano and Segarra are included in the number of present and future silica claims against APG; (b) 15% of the claims diagnosed by a Judge Jack doctor are re-diagnosed and refiled against Reorganized APG; and (c) the proceeds of the insurance settlement agreements are not available to Reorganized ANH in the absence of the APG Silica Trust, with the exception of the $3.9 million of insolvent insurer proceeds already in the Debtors' possession, Mr. Dooley conceded that Reorganized ANH will experience a cumulative impact over the three years after the Effective Date of the Plan of negative $45 million due to silica claims against APG. (Id. at 297-99.)

125. Mr. Dooley conceded that it would be "problematic" for Reorganized ANH to draw on its exit facility to cover the negative $45 million financial impact of Reorganized APG's silica liability, and that even a $10 million judgment against Reorganized APG would be "problematic" in terms of Reorganized ANH's ability to draw on its exit facility. (Id. at 299-300.)

126. Mr. Dooley also conceded that creation of the APG Silica Trust takes away the risk to Reorganized ANH of exposure to an adverse judgment against Reorganized APG for silica liability, and that it is better to cap a company's exposure to liabilities than to leave its exposure uncapped. (Id. at 300-01.) In addition, at the hearing on October 29, 2012, James Restivo, counsel for Debtors, testified as to why a silica trust was included in the GIT Plan. Tr. 10/29/12, Doc. No. 10878, at 17-32. The testimony incorporated Mr. Restivo's declaration, Doc. No. 10699, as follows:

7. As of the Petition Date, A.P. Green Industries, Inc. ("APG"), one of the Debtors, faced 169 silica-related liability claims, in addition to hundreds of thousands of asbestos-related liability claims. During the course of discovery in this bankruptcy case, I learned that prior to the Petition Date, APG's primary liability insurer had spent $247,531 defending 17 silica-related liability lawsuits, six of which settled for a total of $65,000 -- including a single silicosis case that settled for $50,000 -- for a paid settlement average of $10,833 per claim.
8. After the Petition Date, the Debtors' management and I began to learn of a rapid increase in the incidence of silica-related liability suits filed in various tort system venues around the country that was taking place at that time -- all while the automatic stay of litigation (pursuant to Section 362 of the Bankruptcy Code) was protecting APG from such lawsuits. These tort system lawsuits targeted (among others) refractory product manufacturers whose products and operations were similar to those of APG.
9. Through my representation of APG's sister company, Harbison-Walker Refractories Company ("Harbison") -- which produced and sold refractory products that were substantially similar in composition and use to those produced and sold by APG -- I learned that prior to its bankruptcy filing, Harbison had resolved at least 280 silica-related liability lawsuits, for an average settlement value of $4,700 per claim. At some point, I learned that
in the In re Mid-Valley, Inc. bankruptcy, the Debtor settled 18,000 silica claims against Harbison for approximately $110 million.
10. After researching and analyzing the foregoing information, I concluded that APG's silica-related liabilities could significantly threaten the Debtors' post-reorganization viability if they were not addressed as part of the Debtors' reorganization plan. Subsequent analyses performed by the Debtors' financial consultant, Kevin Nystrom, and by Dr. Timothy Wyant, a biostatistician who estimated the number of silica claims that may be asserted against APG in the future, confirmed this conclusion.

The discussions between Debtors and Bryan O. Blevins from Provost Umphrey LLP, a firm that represents a large number of silica claimants, did not commence until after Debtors reached agreement with the ACC and FCR regarding asbestos claims. Id. at ¶¶ 15, 17. Moreover, the original disclosure statement and plan filed in July of 2003 included a trust for non-asbestos personal injury claims. Later versions specified that trust to be for silica personal injury claims. E. Facts Pertaining to 11 U.S.C. § 1129.

127. The GIT Plan places all claims against and interests in the Debtors into classes with substantially similar claims or interests. (Allegretti Decl., ¶ 13(a).)

128. The GIT Plan contains all of the elements required by 11 U.S.C. § 1123(a), in that the Plan:

(a) Designates classes of claims and interests (GIT Plan, Art. 3);
(b) Specifies the treatment of classes of claims and interests that are not impaired under the GIT Plan (id.);
(c) Specifies the treatment of classes of claims and interests that are impaired under the GIT Plan (id.);
(d) Provides for the same treatment for each claim or interest of a particular class (id.);
(e) Provides adequate means for implementation of the GIT Plan (GIT Plan, Art.
10);
(f) Provides for only one class of stock which shall be voting stock (Combined Disclosure Statement, GIT Doc. No. 5426 at Ex. 8 [Amend. and Restated Cert. of Incorporation for Reorganized ANH Refractories Co.]); and
(g) Contains only provisions that are consistent with the interests of creditors and equity security holders and with public policy with respect to the manner and selection of officers, and any successors thereto. (Allegretti Decl., ¶ 13(b).)

129. The Disclosure Statement and the GIT Plan were distributed to all creditors and interest holders in accordance with the procedures previously approved by the Bankruptcy Court's Order of January 30, 2006, approving the proposed procedures for publication, notice, solicitation and voting on the GIT Plan (the "Voting Procedures Order, " Doc. No. 5448). (April 14, 2006, Logan Decl., ¶ ¶ 6-11).

130. Additional notice of the Plan and Disclosure Statement was provided by publication as approved by the Voting Procedures Order. (May 16, 2006, Declaration of Adam Levin (hereafter "Levin Decl.") (GIT Doc. No. 6011), ¶¶ 2-7) and by service on a list of known personal injury lawyers and law firms compiled by Pittsburgh Corning Corporation (Declaration of James J. Restivo (hereafter "Restivo Decl.," ¶ 26) (GIT Doc. No. 10699).

131. Pittsburgh Corning Corporation has no silica claims or liabilities. (Restivo Decl., ¶ 27).

132. Service on the list of personal injury lawyers was made solely for the purpose of supplementing the notice by publication. (Restivo Decl., ¶¶ 26 - 27).

133. The Technical Amendments are the only amendments to the GIT Plan since notice of the GIT Plan and Disclosure Statement was provided to creditors. (Allegretti Supp. Decl., ¶ 9).

134. The Technical Amendments do not adversely change the treatment of any claimants or equity security holders of the Debtors. (Id.)

135. The Debtors have disclosed the identity of all insiders that will be employed or retained by the Reorganized Debtors and the nature of compensation for such insiders. (Allegretti Decl. ¶ 21).

136. The GIT Plan will enable the Debtors' business operations to survive, will fairly distribute available assets among creditors, and will provide substantially better payments to creditors than they would get from a liquidation of the Debtors. (Allegretti Decl., ¶ 16(i); May 23, 2006, Declaration of Kevin Nystrom (hereafter "Nystrom Decl.") (GIT Doc. No. 6030), ¶¶ 16, 24.)

137. All payments made or to be made by any of the Debtors for services or for costs and expenses in or in connection with the case or in connection with the GIT Plan and incident to the GIT case have been approved by, or are subject to the approval of, the Bankruptcy Court as reasonable. (Allegretti Decl., ¶ 17).

138. The individuals proposed to serve, after confirmation of the GIT Plan, as directors of Reorganized ANH include: Dr. Guenter Karhut, Chief Executive Officer; Katherine L. Adams, Senior Vice President and General Counsel, Honeywell International, Inc.; Kathleen A. Winters, Vice President and Corporate Controller, Honeywell International, Inc.; Anne Madden, Vice President Corporate Development, Honeywell International, Inc.; and John J. Fannon, Consultant and retired vice chairman of Simpson Paper Company. (Amended Notice of Proposed Directors, Trustees, and Trust Advisory Committee Members, GIT Doc. No. 10697.)

139. The appointment to or continuance in office of the persons designated to serve as directors and/or officers of the Reorganized ANH is consistent with the interests of creditors, equity security holders and public policy. (Allegretti Decl., ¶ 20.)

140. There is no governmental regulatory commission that will have jurisdiction over rates that will be charged by the Reorganized Debtors. (Id., ¶ 22.)

141. The creditors and interest holders in the impaired classes of Claims and Interests have either accepted the GIT Plan or will receive under the GIT Plan property of a value that is not less than the value that such creditor or interest holder would receive if Debtors were liquidated under Chapter 7 of the Bankruptcy Code. (Id., ¶ 23.)

142. GIT Classes 1-A, 1-B, 3-B 4-B and 5-B, are not impaired under the GIT Plan. GIT Plan, §3.2. (Id., ¶ 24.)

143. GIT Classes 3-A, 4-A, and 5-A have voted to accept the GIT Plan by more than 50% in number and two-thirds (2/3) in amount of those voting. (April 14, 2006, Logan Decl., ¶¶ 20, 22.)

144. No votes were cast by the RHI AG Parties, the only entities included in GIT Classes 3-C and 6. The RHI AG Parties, however, have accepted the treatment of their Claims and Interests pursuant to the terms of the GIT/RHI AG Settlement Agreement. (Allegretti Decl., ¶ 26.)

145. Claims of the type specified in §507(a)(1) of the Bankruptcy Code will be paid in full in accordance with terms and conditions of the particular transactions giving rise to such claims and any agreements related thereto. (Id., ¶ 27.)

146. There are no claims against Debtors of the types specified in §507(a)(2) of the Bankruptcy Code. (Id., ¶ 28.)

147. Allowed Claims of the type specified in §507(a)(3) and (4) of the Bankruptcy Code have either been paid in full pursuant to prior orders of the Bankruptcy Court or will be paid in accordance with terms and conditions of the applicable agreement or benefit plan. (Id., ¶ 29.)

148. There are no claims against Debtors of the types specified in §507(a)(5), (6), or (7) of the Bankruptcy Code. (Id., ¶ 30.)

149. Holders of Claims of the kind specified in §507(a)(8) of the Bankruptcy Code will be paid the Allowed Amount of such claim in full in cash on the Effective Date or upon such other terms as may be mutually agreed upon between such holders and Reorganized ANH. (Id., ¶ 31.)

150. The GIT Plan has been accepted by the following impaired classes: GIT Classes 3-A, 4-A, and 5-A, as determined without including any acceptance of the GIT Plan by any insider. (Id., ¶ 32.)

151. The only other impaired Classes under the GIT Plan, GIT Classes 3-C and 6, are comprised entirely of the Claims and Interests of the RHI AG Parties and their affiliates who are insiders and who did not cast ballots either for or against the GIT Plan. (Id., ¶ 33.) See note 23 and ¶ 207, infra.

152. Confirmation of the GIT Plan will permit Reorganized ANH to continue business operations and is not likely to be followed by the liquidation or need for further financial reorganization of Reorganized ANH, and therefore the GIT Plan is feasible within the contemplation of §1129(a)(11) of the Bankruptcy Code. (Id., ¶ 34; Karhut Decl, ¶ 18; Nystrom Decl., ¶ 18; April 25, 2006, Expert Report of Kevin Nystrom Rept., ¶ 20 (hereafter "April 25, 2006, Nystrom Rept."); Allegretti Supp. Decl. ¶ 11(a)).

153. All fees payable under §1930 of Title 28 of the United States Code have been or will be paid in full in cash on the Effective Date. (Allegretti Decl., ¶ 35).

154. The GIT Plan provides for the assumption by Reorganized ANH of all rights and obligations under the Debtors' retiree health and life insurance benefit plans. (Id., ¶ 36.)

155. No creditors or equity security holders with Claims or Interests junior to the Claims and Interests of the RHI AG Parties will receive or retain any property under the terms of the GIT Plan. (Id., ¶ 37.)

156. The GIT Plan has been accepted by 97.77% of the holders of Claims in GIT Class 3-A (General Unsecured Claims) (holding 99.45% of the dollar value of such Claims, by 95.52% of the holders of Claims in GIT Class 4-A (APG Asbestos Trust Claims (holding 93.71% of the dollar value of such Claims), (April 14, 2006, Kathleen Logan Decl., ¶ 22) and by 98.94% of the holders of Claims in GIT Class 5-A (APG Silica Trust Claims) (holding 97.15% of the dollar value of the holders of such Claims). (March 9, 2007, Declaration of Kathleen Logan, ¶ 12 (GIT Doc. No. 7183.)) F. The GIT Plan Is in the Best Interests of Creditors.

157. The Debtors, with the assistance of Kroll Zolfo Cooper LLC ("KZC"), estimated the proceeds under a GIT liquidation to be $204 million. The assets include, but are not limited to, cash and cash equivalents, net accounts receivable, postpetition intercompany receivables, accounts receivable, inventory, prepetition intercompany receivables, machinery and equipment, plants, buildings and related real estate, intangible assets, interim operating results of plants to be sold, inactive plants, and non-debtor subsidiaries. (Karhut Decl., ¶ 13; April 25, 2006, Nystrom Rept., ¶ 15.)

158. Under a GIT liquidation analysis, unsecured creditors and pension and other post-employment benefit obligations, with claims estimated to be $629.9 million, would receive only a 15.2% distribution on account of those claims. Under the GIT Plan, however, general unsecured creditors of GIT and GIT-Affiliates will receive approximately 90% of their allowed unsecured claims, and pension plan and other post-employment benefits obligations are assumed to be paid in full in the ordinary course of business. (Karhut Decl., ¶ 14; April 25, 2006, Nystrom Rept., ¶ 16.)

159. In the liquidation scenario, the estates would not receive the benefits of the GIT/RHI AG Settlement Agreement. As noted above, under the RHI AG Settlement, together with the PBGC Settlement, the RHI AG Parties will make substantial contributions for the benefit of the estates in exchange for certain benefits received thereunder. The RHI AG Entities' contributions include, among other contributions and benefits (collectively, the "RHI Contributions"), the following: (a) RHI AG Holding's release of equity interests in the Debtors to the NARCO Asbestos Trust and the APG Asbestos Trust; (b) the RHI AG Entities' release, discharge, and cancellation of all prepetition claims against the Debtors, which had been scheduled by the Debtors as undisputed, non-contingent and liquidated claims in the approximate amount of $608,000,000; (c) RHI AG's reimbursement to certain banks for draws on various insurance-related letters of credit (and the waiver of any claims against the Debtors for such amounts), with an approximate value of $12,000,000; (d) RHI AG's payment of a $500,000 civil penalty to the Federal Trade Commission in connection with certain products sold by one of the Debtors, as well as the payment of $350,000 for asbestos abatement at certain plants formerly owned by one of the Debtors; and (e) RHI Holding's payment of a $1,000,000 contribution to the APG Pension Plan for Hourly Employees. In the absence of the GIT/RHI AG Settlement Agreement, the estates would not receive the benefits of the RHI Contributions and, as a result, unsecured creditors of the GIT Debtors would likely receive substantially reduced distributions. (Karhut Decl., ¶ 15.)

160. In the liquidation scenario, the value of the securities of Reorganized ANH (which shall be contributed to the APG Asbestos Trust pursuant to the RHI AG Settlement) and the cash contributions from certain of the GIT Protected Parties would not be available to fund the APG Asbestos Trust and APG Silica Trust. Accordingly, in a Chapter 7 liquidation, fewer funds would be available for distribution to holders of APG Asbestos and Silica Trust Claims. (Karhut Decl., ¶ 16; Nystrom Decl., ¶ 15.)

161. For the foregoing reasons, the GIT Plan is in the best interests of creditors because it provides for them to receive more than they would in a hypothetical Chapter 7 liquidation of the GIT Debtors. (Karhut Decl., ¶ 15; April 25, 2006, Nystrom Rept., ¶ 18; Allegretti Supp. Decl. ¶ 12(c).)

162. After reviewing the Liquidation Analysis, the Debtors' current business operations, the Debtors' prospects as ongoing businesses, and other potential restructuring alternatives considered by them: (a) the recovery to creditors will be greater as a result of the Debtors' continued operations and by the distribution of values as contemplated by the GIT Plan; and (b) all creditors of the Debtors that are impaired will receive a greater recovery under the GIT Plan than they would in the various hypothetical liquidation scenarios set forth in the Liquidation Analysis. Based upon the Debtors' Projections and the Liquidation Analysis, and if the assumptions contained therein are materially correct, then after taking into account the transactions contemplated by the GIT Plan, the GIT Plan provides creditors with recoveries that exceed the recoveries that those creditors would likely receive in a Chapter 7 liquidation. (Karhut Decl., ¶ 17.)

163. All of the insurers who litigated objections to the GIT Plan's creation of the APG Silica Trust have reached settlements with the Debtors (GIT Doc. Nos. 6967, 10732, 10733, 10742), which settlements have been approved by this Court (GIT Doc. Nos. 7065, 10805, 10806, 10817). As a result, those objections have been withdrawn. There are no objections to the GIT Plan as amended by the August 29, 2012, Technical Amendments.

VI. CONCLUSIONS OF LAW

A. Jurisdiction and Venue.

164. The Court has jurisdiction over these cases, and also has jurisdiction to confirm the GIT Plan pursuant to 28 U.S.C. §§1334 and 157.

165. Venue for the Debtors' bankruptcy case was proper in this district as of the Petition Date, and continues to be proper presently, under 28 U.S.C. §§1408 and 1409.

166. The Court has jurisdiction to enter the APG Asbestos Channeling Injunction in favor of GIT and the GIT-Affiliated Debtors because such injunctions are authorized by §524(g) of the Bankruptcy Code, and, therefore, proceedings to adopt and enforce the APG Asbestos Channeling Injunction arise under Title 11 of the United States Code or arise in a case under Title 11 of the United States Code.

167. The Court has jurisdiction to enter the APG Asbestos Channeling Injunction in favor of entities other than the Debtors because such Injunctions are authorized by §524(g) and therefore, proceedings to adopt and enforce the APG Asbestos Channeling Injunction arise under title 11 of the United States Code or arise in a case under title 11 of the United States Code.

168. The Court has jurisdiction to enter the APG Silica Injunction because the injunction is permitted under 11 U.S.C. §§105(a) and 1123(b)(6).

169. The Debtors provided good and sufficient notice of the continued confirmation hearing to all known and unknown creditors. See ¶¶ 129-32. B. The GIT Plan Satisfies the Bankruptcy Code. 1. Compliance With §1129(a)(1) of the Code.

170. Section 1129(a)(1) of the Bankruptcy Code requires that a plan comply with the applicable provisions of the Bankruptcy Code. In this case, the GIT Plan complies with all applicable provisions of the Bankruptcy Code. In addition, and as required pursuant to Bankruptcy Rule 3016, the GIT Plan identifies the Debtors as the Plan Proponents and conspicuously identifies both the acts to be enjoined pursuant to the Injunctions and the entities that are subject to the Injunctions. (Combined Disclosure Statement, GIT Doc. No. 5426, GIT Plan, Doc. No. 5427].)

171. Compliance with §§1122 and 1123 is also necessary for the Court to conclude that the GIT Plan complies with §1129(a)(1) of the Bankruptcy Code. Here, the GIT Plan complies with §§1122 and 1123. (a) Compliance With §1122 of the Code.

172. Section 1122(a) of the Bankruptcy Code imposes a limitation on the classification of claims and interests, requiring that only substantially similar claims may be included in the same class. If a reasonable basis exists for the classification structure and the claims or interests within a particular class are substantially similar, then §1122 of the Bankruptcy Code is satisfied. Cf. Matter of Jersey City Medical Center, 817 F.2d 1055, 1061 (3d Cir. 1987) (similar claims may be grouped in different classes but classification of claims must be reasonable).

173. Despite this limitation, the Bankruptcy Code does not require that all claims with equal priority be classified in the same class. Therefore, it is appropriate to classify Asbestos Claims and Silica Claims separately from general unsecured Claims. Cf. In re U.S. Truck Co., Inc., 800 F.2d 581, 585 (6th Cir. 1986) ("Section 1122(a) specifies that only claims which are 'substantially similar' may be placed in the same class. It does not require that similar claims must be grouped together, but merely that any group created must be homogenous"). All Asbestos Claims, including APG Asbestos Trust Claims, relate to liability for asbestos personal injury and wrongful death claims arising from exposure to asbestos. Similarly, all APG Silica Trust Claims relate to liability for personal injury claims arising from exposure to silica. In addition, §524(g)(2)(B)(ii)(IV)(bb) of the Bankruptcy Code requires and the GIT Plan does establish a separate class or classes of claimants whose Claims are to be channeled to the APG Asbestos Trust. Under the GIT Plan, APG Silica Trust Claims also will be channeled to a trust to ensure equitable treatment and that present claims and future demands will be treated similarly. These differences justify classifying APG Asbestos Trust Claims and APG Silica Trust Claims separately from the general unsecured Claims.

174. The GIT Plan complies with §1122(a), as each class of Claims and the class of Interests as set forth in Article 3.2 of the GIT Plan, consists solely of substantially similar Claims or Interests, as discussed above. (GIT Plan, § 3.2.)

175. Section 1122(b) is inapplicable in the instant case, as there is no convenience class of claims. (b) Compliance With §1123 of the Code.

176. Section 1123(a)(1) of the Bankruptcy Code requires that the a plan designate classes of claims and classes of interests, other than Administrative Expenses and Priority Tax Claims. The GIT Plan complies with §1123(a)(1), as it designates classes of claims and interests in § 3.2. (GIT Plan, § 3.2.)

177. Section 1123(a)(2) of the Bankruptcy Code provides that a plan must specify any classes of Claims or interests that are unimpaired. Section 3.1 of the GIT Plan identifies Classes 3-A, 3-C, 4-A, 5-A, and 6 as impaired, while Classes 1-A, 1-B, 3-B, 4-B, and 5-B are identified as unimpaired. Accordingly, §1123(a)(2) of the Bankruptcy Code is satisfied by the GIT Plan. (GIT Plan, § 3.1.)

178. Section 1123(a)(3) of the Bankruptcy Code, requires that a plan identify the treatment of each impaired class of Claims and Equity Interests. Section 3.2 of the GIT Plan sets forth the treatment of each class of claimants and the class of equity interests. (GIT Plan, § 3.2.) Accordingly, §1123(a)(3) of the Bankruptcy Code is satisfied.

179. Section 1123(a)(4) of the Bankruptcy Code requires that a plan provide the same treatment for all claims or interests in each class unless the holder of such Claim or Equity Interest agrees to less favorable treatment. Section 1123(a)(4) of the Bankruptcy Code is satisfied because the GIT Plan provides, in §3.2, for the same treatment within each Class of Claims and Equity Interests. (GIT Plan, § 3.2.)

180. Section 1123(a)(5) of the Bankruptcy Code requires that a plan include adequate means for its implementation. The GIT Plan complies with §1123(a)(5) in that it provides for, among other things, creation and funding of the APG Asbestos Trust, and the APG Silica Trust, adoption of Amended and Restated By-Laws of the Reorganized Debtors, restructuring of the Board of Directors of Reorganized ANH, distribution of payments to creditors, and assumption of executory contracts and unexpired leases on the Effective Date. (GIT Plan, Articles 4, 6, and 10.)

181. Section 1123(a)(6) of the Bankruptcy Code requires a plan to provide for the inclusion in the charter of the debtor, if the debtor is a corporation, or of any corporation to which the debtor transfers all or any part of the debtor's estates or with which the debtor has merged or consolidated, a provision prohibiting the issuance of non-voting equity securities. The GIT Plan complies with §1123(a)(6) in that it provides that ANH Refractories Company, the entity to which ownership of the GIT Entities will be transferred under the GIT Plan, will have only one class of voting common stock and is not permitted to issue non-voting stock. (Combined Disclosure Statement, Ex. 8 (Amended and Restated Cert. of Incorp. of Reorganized ANH Refractories Co.), Art. IV.)

182. Section 1123(a)(7) of the Bankruptcy Code requires that the manner of selection of any officer, director or trustee of the Reorganized Debtor, or any successor to such officer, director or trustee, be consistent with the interests of creditors and equity security holders and with public policy. The GIT Plan complies with §1123(a)(7) in that the APG Asbestos Trust has the ability to elect directors as agreed by the parties in interest. (Combined Disclosure Statement, GIT Doc. No. 5426 at Ex. 10 (ANH Refractories Co. Shareholders Agreem.), § 4.)

183. The GIT Plan is, in all respects, consistent with the interests of creditors and equity interests, and with public policy.

184. Under §1123(b)(2) of the Bankruptcy Code, subject to the requirements of §365 of the Bankruptcy Code, a plan may provide for the rejection or assumption and assignment of any unexpired lease or executory contract of the debtor not previously rejected under §365 of the Bankruptcy Code. (c) Compliance With §365 of the Code.

185. Section 365 provides that a debtor may assume an unexpired lease or executory contract if (i) outstanding defaults under the lease or contract have been cured under §365(b)(1) of the Bankruptcy Code and (ii) the debtor's decision to assume such unexpired lease or executory contract is supported by valid business justifications. Cf. In re MF Global Holdings Ltd., 466 B.R. 239, 242 (Bankr. S.D.N.Y. 2012)("Courts generally will not second-guess a debtor's business judgment concerning whether the assumption or rejection of an executory contract or unexpired lease would benefit the debtor's estate"); In re Pinnacle Brands, Inc., 259 B.R. 46, 53 (Bankr. D. Del. 2001) ("The Debtor's decision to assume or reject an executory contract is based upon its business judgment").

186. Article 6 of the GIT Plan provides for the assumption of all unexpired leases and executory contracts of the Debtors not previously rejected on the Effective Date. (GIT Plan, Art. 6.)

187. The assumption of the unexpired leases and executory contracts (i) is in the best interests of the Debtors, their estates and all parties in interest, (ii) is based upon the Debtors' sound business judgment, (iii) is necessary to the implementation of the GIT Plan and (iv) satisfies the requirements of §365(a) of the Bankruptcy Code. 2. Compliance With §1129(a)(2) of the Code.

188. Section 1129(a)(2) of the Bankruptcy Code requires that plan proponents comply with the applicable provisions of the Bankruptcy Code. Compliance with §1125 of the Code is also necessary for the Court to conclude that the Plan Proponents have complied with §1129(a)(2) of the Bankruptcy. They have complied with §§1125 and 1129.

189. The Combined Disclosure Statement distributed to creditors contained adequate information about the GIT Plan in accordance with 11 U.S.C. §1125. (Doc. No. 5446, Jan. 30, 2006, Order Approving Combined Disclosure Statement.)

190. The mailing and publication of notice of the Combined Disclosure Statement and the GIT Plan provided adequate notice of the Combined Disclosure Statement and the GIT Plan to all creditors entitled to vote as required by Bankruptcy Rules 2002 and 3017. (Debtors' Confirm. Hrg. Ex. 8.) See Doc. No. 5448, Order Approving (I) the Contents and Service of the Solicitation Package, (II) the Procedures for Voting and tabulation of Votes, (III) the Forms of Ballots and (IV) the Procedures for Allowing Claims for Voting Purposes.

191. The Voting Procedures utilized by the Plan Proponents and approved by the Court satisfy all requirements of the Bankruptcy Code and Rules, including, without limitation, 11 U.S.C. §§1125 and 1126, and Bankruptcy Rules 2002, 3017 and 3018. (Id.)

192. As the Technical Amendments do not adversely change the treatment of any claims or equity security interests in the Debtors, the GIT Plan, as amended by the Technical Amendments, is deemed accepted by parties who previously accepted the GIT Plan. Bankruptcy Rule 3019(a). 3. Compliance With §1129(a)(3) of the Code.

193. Section 1129(a)(3) provides that a plan must have been provided in good faith and not by any means forbidden by law. In re PPI Enterprises (U.S.), 324 F.3d 197, 211 (3d Cir. 2003); In re PWS Holding Corp., 228 F.3d 224, 242 (3d Cir. 2000) (citing In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143, 150 n.5 (3d Cir. 1986) (quoting Matter of Madison Hotel Assocs., 749 F.2d 410, 425 (7th Cir. 1984)); In re SGL Carbon Corp., 200 F.3d 154 (3d Cir. 1999).

194. Whether a plan satisfies the good faith requirement of §1123(a)(3) of the Bankruptcy Code is determined by considering whether in light of the particular facts and circumstances of the case, the plan will fairly achieve results consistent with the Bankruptcy Code. In re PWS Holding Corp., 228 F.3d 224, 242 (3d Cir. 2000) (citing In re Abbotts Dairies of Pa., Inc., 788 F.2d 143, 150 n.5 (3d Cir. 1986)).

195. Under the facts and circumstances of this Case, the GIT Plan has been designed to achieve a fair and equitable treatment of all creditor Claims and Demands and is consistent with the purposes of the Bankruptcy Code.

196. Thus, the Debtors have satisfied the "good faith and not by any means forbidden by law" requirement of §1129(a)(3) of the Bankruptcy Code.

197. The Third Circuit Court of Appeals remanded this case for a more searching review of allegations of collusion between the Debtors and counsel for silica claimants. The Court conducted a more searching review of the record and prior to the resolution of the objections to the GIT Plan, and invited objecting parties to identify any record facts that would support allegations of collusion. No party in interest was able to identify any such facts and this Court has discovered no such facts. (Restivo Decl. ¶¶ 33 - 36). To the contrary, based upon a thorough review of the record, the Restivo Declaration and the testimony taken at the October 29, 2012, Confirmation Hearing, this Court concludes that negotiations between the Debtors and counsel for silica claimants were conducted in good faith, and at arm's length, and that there was no collusion between or among the Debtors, the silica claimants, the Asbestos Creditors' Committee ("ACC"), the Future Claimants' Representative ("FCR"), or counsel for any of those entities. This is discussed in more detail in section VII, infra. 4. Compliance With §1129(a)(4) of the Code.

198. Section 1129(a)(4) of the Bankruptcy Code provides that payments to be made to professionals for costs and expenses must be approved by the Bankruptcy Court. The GIT Plan complies with this requirement in that it requires the Bankruptcy Court to establish a date for final applications for compensation to be filed for Bankruptcy Court approval. (GIT Plan, §2.3.1.)

199. The Plan further provides for payment of Allowed Administrative Expense Claims in accordance with the terms and conditions in the agreements underlying the transactions giving rise to such Administrative Claims. (GIT Plan, § 2.1.) 5. Compliance With §1129(a)(5) of the Code.

200. Pursuant to §1129(a)(5) of the Bankruptcy Code, the proponents of a plan must disclose the identity and affiliations of any persons who will act as directors, officers or voting trustees of the debtor, as well as any insiders to be employed or retained by the debtor and his compensation.

201. The officers and directors of the Reorganized Debtors have been disclosed. (Combined Disclosure Statement, at 103; June 21, 2006, Notice of Proposed Directors, Trustees and Trust Advisory Cmte. Members (GIT Doc. No. 6245); Amended Notice of Proposed Directors, Trustees, and Trust Advisory Committee members (GIT Doc. No. 10697).) 6. Compliance With §1129(a)(6) of the Code.

202. Section 1129(a)(6) of the Bankruptcy Code is not applicable, as it relates to obtaining the approval of any governmental regulatory commission with jurisdiction over rate changes. The Debtors are not regulated entities. 7. Compliance With §1129(a)(7) of the Code.

203. Section 1129(a)(7) of the Bankruptcy Code requires each creditor or interest holder in an impaired class to accept the plan of reorganization or receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated under Chapter 7 of the Bankruptcy Code.

204. The majority of holders of claims or interests in each impaired class have voted in favor of the GIT Plan. (April 14, 2006, Logan Decl., ¶ ¶ 20, 22.)²³

23 The exceptions were the RHI AG parties and their affiliates which are insiders, did not vote, and agreed to accept the treatment provided by the plan. See ¶¶151, 207.

205. Those who have not voted in favor of the GIT Plan would receive less in a liquidation under Chapter 7 than they will receive under the GIT Plan. Based upon the findings of fact contained herein, the testimony at the confirmation hearing and the Debtors' liquidation analysis, the GIT Plan satisfies §1129(a)(7) of the Bankruptcy Code. (Findings of Fact, ¶¶ 161, 162.) 8. Compliance With §1129(a)(8) of the Code.

206. Section 1129(a)(8) requires that each class of claims or interests be unimpaired or vote in favor of a plan.

207. Section 1129(a)(8) of the Bankruptcy Code is satisfied in that all of the impaired classes, GIT Classes 3-A, 3-C, 4-A, 5-A, and 6 have voted to accept the GIT Plan by more than 89% in number and more than 86% in amount (April 14, 2006, Logan Decl., ¶ 22; see Oct. 18, 2006, Logan Decl. at ¶ 6 regarding GIT Class 5-A), or, in the case of the RHI AG Parties, have expressly agreed to accept the treatment provided by the GIT Plan. See ¶¶74, 144, 151, and n.17, supra. The remaining classes, GIT Classes 1-A, 1-B, 3-B, 4-B, and 5-B are not impaired under the Plan. (GIT Plan, § 3.1.) 9. Compliance With §1129(a)(9)(A) of the Code.

208. In accordance with §1129(a)(9)(A) of the Bankruptcy Code, the GIT Plan (Article 2.3.1) provides for payment of Allowed Administrative Expense Claims for professional fees, in full, in Cash, on the later of the Effective Date and the date such claim is Allowed, or as soon thereafter as is practical, or under such terms and conditions as the Debtors and the Administrative Expense Creditor agree.

209. Pursuant to §1129(a)(9)(B) of the Bankruptcy Code, §2.3.2 of the GIT Plan provides that holders of Administrative Expense Claims will be paid by Reorganized ANH in the ordinary course of business to the extent the claims are allowed and not paid by Debtors.

210. Consistent with §1129(a)(9)(C) of the Bankruptcy Code, §2.3.3 of the GIT Plan provides that Priority Claims of Governmental Units are to be paid, at the option of the Debtors, in full, in Cash, on the Effective Date or as soon thereafter as practical, or upon such other terms as the holder of such Claim and the Debtors agree. (GIT Plan, § 2.3.3.) 10. Compliance With §1129(a)(10) of the Code.

211. Under §1129(a)(10), at least one impaired class must have voted to accept a plan. Here, all of the impaired classes have voted to accept the GIT Plan. 11. Compliance With §1129(a)(11) of the Code.

212. Section 1129(a)(11) of the Bankruptcy Code states that the Court must find that confirmation is not likely to be followed by the liquidation or need for further reorganization of the debtor or any successor, unless the plan proposed provided for such liquidation or reorganization. In other words, the plan must be feasible. In re NII Holdings, 288 B.R. 356, 364 (Bankr.D.Del. 2002); In re American Family Enterprises, 256 B.R. 377, 404-05 (D.N.J. 2000); Corestates Bank, N.A. v. United Chemical Technologies, Inc., 202 B.R. 33, 41-42 (E.D. Pa. 1996).

213. As evidenced by the findings of fact, the Debtors will be in a position to consummate the GIT Plan. The funding for the GIT Plan, which derives not only from the Debtors, but also from the RHI AG Parties and various settling insurers, including the insurers who are parties to the settlement agreements referred to in paragraph 163 of these Findings of Fact and Conclusions of Law (the "Settling Insurers"), is available and sufficient to carry out the purposes and goals of the GIT Plan. The GIT Plan further provides for the creation of mechanisms to implement the GIT Plan.

214. The Debtors will not likely need to liquidate or further reorganize following the GIT Plan's confirmation. (Karhut Decl., ¶ 18; Nystrom Decl., ¶ 18; Allegretti Supp. Decl. ¶ 14). Therefore, §1129(a)(11) is satisfied. Cf Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 46 (establishment of APG Silica Trust is necessary to make GIT Plan feasible as it will eliminate risk of insufficient assets to discharge silica-related claims). 12. Compliance With §1129(a)(12) of the Code.

215. Section 1129(a)(12) requires that the fees payable under 28 U.S.C. § 1930, as determined by the court at the plan confirmation hearing, either have been paid or are to be paid under the plan on its effective date. Section 2.2 of the GIT Plan provides for payment of such fees when due. (GIT Plan, § 2.2.)

216. Under §1129(a)(13) of the Bankruptcy Code, a plan must provide for continuation of retiree benefits after the effective date at the level established under §1114 of the Bankruptcy Code for the duration of the period for which the debtors have obligated themselves for payment of such retiree benefits.

217. The GIT Plan provides for payment of retiree health and insurance benefits and pension benefits, in compliance with §1129(a)(13) of the Bankruptcy Code. (GIT Plan, §§10.7, 10.8.)

218. The discharge, exculpation, release and indemnification provisions of the GIT Plan are consistent with §§105, 524(g), 1129 and all other applicable provisions of the Bankruptcy Code. C. The Asbestos Permanent Channeling Injunctions and the Establishment of the APG Asbestos Trust Satisfy §524(g).

219. The proposed APG Asbestos Trust and the APG Channeling Injunction satisfy all of the requirements required by 11 U.S.C. §524(g) for the implementation of a trust and channeling injunction in favor of the Debtors and the APG Protected Parties.

220. Section 524(g)(1)(A) requires both notice and a hearing in connection with the consideration of a channeling injunction. For these proceedings, this requirement has been satisfied because notice was provided through the distribution of the Debtors' Combined Disclosure Statement as well as through mailed and published notices and hearings were held. See, e.g., Certificate of Service related to solicitation, Doc. No. 5564, Supplemental Certificate of Service regarding same, Doc. No. 5696.

221. Section 524(g)(1)(B) permits a channeling injunction which enjoins "entities from taking legal action for the purpose of directly or indirectly collecting, recovering, or receiving payment or recovery with respect to any claim or demand," to be channeled to a §524(g) trust. This is precisely the form of channeling injunction the Debtors seek: the scope of the channeling injunction for APG is directed to the holders of APG Asbestos Trust Claims and APG Asbestos Demands, which is the same as the scope of claims to be addressed by the proposed APG Asbestos Trust. (GIT Plan, § 5.4.)

222. Section 524(g)(2)(B)(i)(I) requires that the trust assume the liabilities of the debtor and that the debtor has been named as a defendant in asbestos personal injury actions. This requirement is satisfied because:

(a) The APG Asbestos Trust will assume all liabilities of the Debtors with regard to APG Asbestos Trust Claims. (GIT Plan, §4.1.1.)
(b) As of the Petition Date, APG and APG Services had about 300,000 asbestos bodily injury cases pending. (Allegretti Decl., ¶ 38.)
(c) In connection with voting on the proposed GIT Plan, more than 275,000 individuals voted as claimants in GIT Class 4-A (over 262,000 voting in favor of the Plan), affirming that they believed that they had asbestos personal injury claims against the Debtors. (April 14, 2006, Logan Decl., ¶ 20.)

223. Section 524(g)(2)(B)(i)(II) requires that the trust be funded in whole or in part by the securities of one or more of the debtors involved in the plan and that there be an obligation on the part of the debtors to make future payments. This requirement is satisfied because:

(a) The APG Asbestos Trust is to be funded, in part, by 21% of the common stock of Reorganized ANH, (GIT Plan, §10.3.8) which is convertible into 51% of the common stock of Reorganized APG.
(b) Reorganized ANH will be obligated to distribute dividends to the APG Asbestos Trust, as set forth in its charter. (Combined Disclosure Statement Ex. 8, Art. IX, §1.)

224. Section 524(g)(2)(B)(i)(III) requires that the trust owns or has the right to own a majority of the voting shares of the debtor or specified affiliates, including its parent. This requirement is satisfied because the APG Asbestos Trust will own 21% of Reorganized ANH, with an option to exchange that interest for 51% of the equity interest in Reorganized APG. (Combined Disclosure Statement Ex. 10, ¶ 8.)

225. Section 524(g)(2)(B)(i)(IV) requires that the trust use its assets to pay claims and demands. This requirement is satisfied because the APG Asbestos Trust will be permitted to use its assets and income exclusively for the liquidation of claims made and for administrative costs associated with running the APG Asbestos Trust. (APG Asbestos Trust Agreement, §1.2, GIT Doc. No. 5427, Ex. A.)

226. Section 524(g)(2)(B)(ii)(I) permits the establishment of a trust and the issuance of an injunction if the Court determines that the debtor will be subject to "substantial future demands" arising out of the same conduct or events. This condition is satisfied because:

(a) In connection with voting on the proposed GIT Plan, more than 275,000 individuals voted as claimants in GIT Class 4-A (over 262,000 voting in favor of the Plan), affirming that they believe they have asbestos personal injury claims against the Debtors. (April 14, 2006, Logan Decl., ¶ 20.)
(b) APG is likely to face substantial future demands from individuals asserting asbestos related personal injuries. (Allegretti Decl., ¶ 60; Fitzpatrick Aff., ¶ 16.)

227. Section 524(g)(2)(B)(ii)(II) requires that the actual amounts, numbers, and timing of such future demands cannot be determined. This requirement is satisfied. As stated, the Court has accepted estimates of the future demands which, by their nature, are not determinations of the actual amounts, numbers and timing of future demands.

228. Section 524(g)(2)(B)(ii)(III) requires that the pursuit of the demands outside of a trust "is likely to threaten the plan's purpose to deal equitably with claims and demands." This requirement is satisfied because:

(a) Based solely upon the value allowed for voting purposes in GIT Class-4A, current claimants potentially hold more than $3.4 billion in claims that could be asserted against the Debtors in the absence of the APG Asbestos Trust. (April 14, 2006, Logan Decl., ¶ 20.)
(b) APG is also likely to face substantial future demands. (Allegretti Decl., ¶ 60; Fitzpatrick Aff., ¶ 16.)
(c) Without the adoption of the GIT Plan and the treatment of APG Asbestos Trust Claims and APG Asbestos Demands as proposed in the GIT Plan and without an injunction channeling such claims to the APG Asbestos Trust, neither the Debtors nor the GIT Plan could deal equitably with APG Asbestos Claims and APG Asbestos Demands. (Allegretti Decl., ¶ 42.)
(d) If prosecution of the APG Asbestos Trust Claims and the APG Asbestos Demands is permitted to continue outside the procedures proposed in the GIT Plan, such prosecution would threaten the equitable treatment of such claims and demands. (Fitzpatrick Aff., ¶ 16.)

229. Section 524(g)(2)(B)(ii)(IV)(aa) requires that the terms of the proposed injunction, including provisions barring actions against third-parties, are set out in the proposed GIT Plan and Combined Disclosure Statement. This requirement is satisfied because all of the terms of the proposed injunction, including the provisions barring actions against third-parties like Honeywell, the RHI AG Entities and other Protected Parties, are set out in the Combined Disclosure Statement and the GIT Plan. (Combined Disclosure Statement, GIT Plan.)

230. Section 524(g)(2)(B)(ii)(IV)(bb) requires that a separate class of claimants with claims to be addressed by the trust be established and that at least 75% of those voting favor the trust. This requirement is satisfied because:

(a) GIT Class 4-A is composed of those claimants whose claims will be addressed by the APG Asbestos Trust. (GIT Plan, § 3.2.4.1.)
(b) Of the 274,985 GIT Class 4-A claimants who voted, 95.52% in favor of the GIT Plan and the APG Asbestos Trust. (April 14 2006, Logan Decl., ¶¶ 20, 22.)

231. Section 524(g)(2)(B)(ii)(V) requires that the trust will be operated through mechanisms that provide, "reasonable assurance that the trust will value and be in a financial position to pay present claims and future demands that involve similar claims in substantially the same manner." This requirement is satisfied because:

(a) The APG Asbestos TDP provides a comprehensive set of procedures for voting and paying current claims and future demands. (APG Asbestos TDP.)
(b) The APG Asbestos TDP provides procedures by which the APG Asbestos Trust will value and pay current claims in substantially the same manner as future demands. (Fitzpatrick Aff., ¶ 17.)

232. Section 524(g)(4)(A)(ii) permits the Court to extend the channeling injunction to third-parties who meet the following criteria:

(a) The third party is identifiable from the terms of the injunction:

(1) All of the third-parties to be covered by the channeling injunctions are identified by the proposed the GIT Plan as "GIT Protected Parties." (Combined Disclosure Statement, Ex. 1 (Definitions) at 11-12.)

(b) The third party is alleged to be "directly or indirectly liable for the conduct of, claims against, or demands on the debtor" to the extent such liability arises by virtue of, inter alia, the third party's ownership or management of a predecessor-in-interest to the debtor, or the third party's provision of insurance to the Debtors or a related party.

(1) The insurers identified as GIT Protected Parties fall within the permissible scope of the channeling injunction because the channeled liability, if any, would arise by virtue of the third party's provision of insurance to the Debtors.
(2) The RHI AG Entities fall within the permissible scope of the APG Asbestos Channeling Injunction because any liability those entities might have for APG Asbestos Claims or APG Asbestos Demands would arise by virtue of RHI AG's ownership interests in the Debtors and the RHI AG Entities' relationship to the Debtors.

233. Section 524(g)(4)(B)(i) requires that a legal representative be appointed to protect the rights of future claimants. This requirement is satisfied because:

(a) Lawrence Fitzpatrick was appointed by the Court to serve as the APG Asbestos Future Claimants Representative in the bankruptcy case of GIT and the GIT-Affiliated Debtors. (GIT Doc. Nos. 1288, 3560.)

(1) Mr. Fitzpatrick and professionals engaged by him conducted a thorough review of the GIT Debtors' history in respect of asbestos personal injury claims and of the GIT Debtors busine§ operations and other assets. He also participated in negotiating the terms of all GIT Plan documents affecting the rights of holders of APG Asbestos Demands. (Fitzpatrick Aff., ¶¶ 8, 9.)
(2) Mr. Fitzpatrick is satisfied that the proposed GIT Plan and the APG Asbestos Trust are fair and equitable to holders of APG Asbestos Demands and that they provide reasonable assurance that present APG Asbestos Trust Claims and future APG Asbestos Demands will be treated in a substantially

similar manner. (Id., ¶ 10.)
(3) Mr. Fitzpatrick believes that the proposed GIT Plan and APG Asbestos Trust are in the best interests of the holders of APG Asbestos Demands. (Id., ¶ 23.)

234. Section 524(g)(4)(B)(ii) requires that the Court determine, before issuing an injunction in favor of the debtor or any third-party, that issuing the injunction is "fair and equitable" in light of the benefits to be provided by the trust, from the perspective of the future claimants. The Court so determines based, in part, on:

(a) The overwhelming majority of holders of and APG Asbestos Trust Claims have voted in favor of the GIT Plan, including the APG Asbestos Channeling Injunction.
(b) The Debtors, the ACC, and the APG Asbestos FCR agree that the APG Asbestos Channeling Injunction, in exchange for the contributions of the RHI AG Parties, Settling Insurers and other Protected Parties, is both fair and equitable.
(c) The benefits to be conferred on the APG Asbestos Trust as a result of contributions of the RHI AG Parties, Settling Insurers and other Protected Parties are substantial.
(d) The issuance of the injunctions is fair and equitable because the injunctions provide a definite path to recovery for those claimants with legitimate APG Asbestos Trust Claims, without the intervening burdens of prosecution and proof in the tort system.
(e) The issuance of the injunctions for holders of GIT Asbestos Trust Claims is equitable, because all claimants will be treated substantially in the same manner.

D. The APG Silica Channeling Injunction is Appropriate Under §§105(a) and 1123(b)(6) of the Bankruptcy Code.

235. In §524(g) of the Bankruptcy Code, Congress established a blueprint for handling mass tort claims in the bankruptcy context. Although that subsection of the Bankruptcy Code is limited to asbestos claims, where all of the applicable elements of §524(g) are otherwise satisfied, it is appropriate to channel other mass tort claimants to a trust established for their benefit pursuant to the authority granted in §105(a) of the Bankruptcy Code.

236. In this case the APG Silica Trust and the APG Silica Channeling Injunction satisfy substantially all of the requirements imposed by 11 U.S.C. §524(g) for the issuance of a channeling injunction, including the requirements for notice and a hearing.

237. Section 524(g)(1)(A) requires both a notice and a hearing in connection with the consideration of a channeling injunction. For these proceedings, this requirement has been satisfied because notice was provided through the distribution of the Combined Disclosure Statement, as well as through mailed and published notices.

238. Section 542(g)(1)(B) permits a channeling injunction which enjoins entities from filing legal action for the purpose of directly or indirectly collecting, recovering, or receiving payment or recovery with respect to any claim or demand channeled to a trust. The APG Silica Channeling Injunction is designed to comply with this requirement. (GIT Plan, Art. 5.)

239. Section 524(g)(2)(B)(i)(I) requires that the trust assume the liabilities of the debtor and that the debtor has been named as a defendant in personal injury actions. This requirement is satisfied because:

(a) The APG Silica Trust will assume all liabilities of the GIT Debtors with respect to silica personal injury actions. (GIT Plan, §4.2.1.)
(b) As of the Petition Date, APG had been named as a defendant by 169 silica personal injury claimants. (Allegretti Decl., ¶ 61.)
(c) In connection with voting on the GIT Plan, more than 4,600 individuals voted as claimants in GIT Class 5-A (4,587 voting for the Plan) affirming that they believed that they had silica personal
injury claims against the Debtors. (April 14, 2006, Logan Decl., ¶ 20.)

240. Section 524(g)(2)(B)(i)(IV) requires that the trust use its assets to pay claims and demands. This requirement is satisfied because the APG Silica Trust will use its assets and income exclusively for the liquidation of claims made and for costs of administration associated with running the APG Silica Trust. (APG Silica Trust Agreement, Doc. No. 5427, Ex. C.)

241. Section 524(g)(2)(B)(ii)(I) permits the establishment of a trust and the issuance of an injunction if the Court determines that the debtor will be subject to "substantial future demands" arising out of the same conduct or events. This condition is satisfied because:

(a) More than 4,600 individuals cast votes asserting that they have silica related injuries caused by the Debtors. (April 14, 2006, Logan Decl., ¶ 20.)
(b) The Debtors' expert, Dr. Timothy Wyant has estimated that through 2050, from 10,360 to 23,304 silica related claims will be filed against APG; and that through 2015, from 4,192 to 9,583 silica related claims will be filed against APG. (Oct. 17, 2006, Wyant Rept., at 4.)
(c) No other, competing estimate of the future silica-related claims against APG was submitted on the record of this case.²⁴

24 Insurers who objected to a channeling injunction for silica claims have settled with Debtors and no longer object.

242. Section 524(g)(2)(B)(ii)(II) requires that the actual amounts, numbers and timing of future silica demands cannot be determined. This requirement is satisfied because it is not possible to calculate the precise number, timing and actual amount of future demands of silica claimants. (Pahigian Decl., ¶ 15.)

243. Section 524(g)(2)(B)(ii)(III) requires that the pursuit of demands outside of a trust is likely to threaten the plan's purpose to deal equitably with claims and demands. This requirement is satisfied because:

(a) Reorganized ANH does not have sufficient free cash flow, borrowing availability or insurance assets to discharge silica claims in the tort system. (Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 14.)
(b) Per the estimate of Dr. Timothy Wyant, APG could expect anywhere between 10,360 to 23,304 demands against it in the future -- with an eventual liability of up to $117 million. (Oct. 17, 2006, Wyant Rept., at 4; Oct. 17, 2006, Rev'd Supp. Nystrom Rept., ¶ 24.)
(c) The APG Silica Trust provides a framework for the equitable resolution of APG Silica Trust Claims and Demands. Without adoption of the GIT Plan and treatment of the APG Silica Trust Claims and APG Silica Demands as proposed in the GIT Plan and without an injunction channeling such claims to the APG Silica Trust, neither the Debtors nor the GIT Plan could deal equitably with the APG Silica Trust Claims and future APG Silica Demands. (Pahigian Decl., ¶¶ 28, 31.)
(d) If prosecution of the APG Silica Trust Claims and the APG Silica Demands is permitted to continue outside of the procedures proposed in the GIT Plan, such prosecution could threaten the equitable treatment of such claims and demands. (Id. at ¶ 19.)
(e) APG is also likely to face substantial future demands. (Id., ¶ 15.)
(f) Without the adoption of the GIT Plan and the treatment of APG Silica Trust Claims and APG Silica Demands as proposed in the GIT Plan and without an injunction channeling such claims to the APG Silica Trust, neither the Debtors nor the GIT Plan could deal equitably with APG Silica Trust Claims and Demands. (Id., ¶ 28.)
(g) If prosecution of the APG Silica Trust Claims and the APG Silica Demands is permitted to continue outside the procedures proposed in the GIT Plan, such prosecution would threaten the equitable treatment of such claims and demands. (Id. at ¶ 19.)

244. Section 524(g)(2)(B)(ii)(IV)(aa) requires the terms of the proposed injunction to be set out in the proposed plan and disclosure statement. This requirement is satisfied because all of the terms of the proposed APG Silica Injunction are set out in the Combined Disclosure Statement and the GIT Plan. (Combined Disclosure Statement, at 82; GIT Plan § 5.4.)

245. Section 524(g)(2)(B)(ii)(IV)(bb) requires that a separate class of claimants with claims to be addressed by the trust be established and that at least 75% of those voting favor the trust. This requirement is satisfied because:

(a) GIT Class 5-A is composed of those claimants whose claims will be addressed by the APG Silica Trust. (GIT Plan, § 3.2.5.1.)
(b) Of the votes cast in GIT Class 5-A, 98.4% (in number) and 97.15% (in amount of claims held) voted in favor of the GIT Plan. (March 9, 2007 Logan Decl., ¶ 12.)

246. Section 524(g)(2)(B)(ii)(V) requires that the trust will be operated through mechanisms that provide reasonable assurance that the trust will value and be in a financial position to pay present claims and future demands that involve similar claims in substantially the same manner. This requirement is satisfied because:

(a) The APG Silica TDP provides a comprehensive set of procedures for valuing and paying current claims and future demands. (APG Silica TDP.)
(b) The APG Silica TDP is designed to ensure that present silica claims and future silica demands will be treated substantially the same. (Pahigian Decl., ¶ 31.)

247. Section 524(g)(4)(A)(ii) permits the Court to extend the channeling injunction to third parties who meet the following criteria:

(a) The third party must be identifiable from the terms of the injunction. In this case:

1. All of the third parties to be covered by the APG Silica Channeling Injunction are identified as GIT Protected

Parties. (Definitions, at 11-13.)

(b) The third party is alleged be directly or indirectly liable for the conduct of claims against, or demands of the debtor to the extent such liability arose by virtue of, inter alia, the third party's ownership or management of a predecessor in interest to the debtor or the third party provision of insurance to the Debtors' or a related party. In this case:

1. The RHI AG Entities fall within the permissible scope of the APG Silica Channeling Injunction because any liability those entities might have for APG Silica Trust Claims or APG Silica Demands would arise by virtue of RHI AG's ownership interests in the Debtors and the RHI AG Entities' relationship to the Debtors.
2. Any liability of GIT and its affiliates would also necessarily stem from ownership of APG.
3. The insurers named as GIT Protected Parties would only have liability stemming from their provision of insurance to APG or its Affiliates.

248. Section 524(g)(4)(B)(i) requires that a legal representative be appointed to protect the rights of future claimants. This requirement is satisfied because:

(a) Philip Pahigian was appointed as the legal representative of persons who may have silica related demands against GIT and the APG Debtors. (GIT Doc. Nos. 2102, 3560.)
(b) Mr. Pahigian participated in negotiating the terms of the APG Silica Trust and related documents, and concluded that the GIT Plan is fundamentally fair to holders of APG Silica demands. (Pahigian Decl., ¶¶ 16-18.)

249. Section 524(g)(4)(B)(ii) requires that the Court determine, before issuing an injunction in favor of the debtor or any third party, that the injunction is "fair and equitable" in light of the benefits to be provided by the trust, from the perspective of the future claimants. The Court so determines based in part on:

(a) The overwhelming majority of the holders of present APG
Silica Trust claims have voted in favor of the terms of the GIT Plan, including the APG Silica Channeling Injunction.
(b) The Debtor and the APG Silica Future Claimants Representative agree that the APG Silica Channeling Injunction and the establishment of the APG Silica Trust are fair and equitable.
(c) The APG Silica Trust is fair and equitable in that it establishes a process by which all present APG Silica Claims and future APG Silica Demands will be treated and paid substantially the same.
(d) Without the APG Silica Trust, it is unlikely that present APG Silica Claims and future APG Silica Demands can be treated and paid in a substantially similar manner.

250. The APG Silica TDP includes detailed procedures designed to ensure that APG Silica Claims are fairly treated and that the APG Silica Trust will be able to pay present claims and future demands in a substantially similar manner.²⁵

25 The Silica TDP provides at ¶ 7.3 ("Discretion to Vary the Order and Amounts of Payments in Event of Limited Liquidity"):

Consistent with the provisions hereof and subject to the FIFO Processing and Payment Queues, and the Maximum Annual Payment requirements stated herein, the APG Silica Trustee shall proceed as quickly as possible to liquidate valid APG Silica Trust Claims, and shall make payments to holders of such claims in accordance with this APG Silica TDP promptly as funds become available and as claims are liquidated, while maintaining sufficient resources to pay future valid claims in substantially the same manner. Because the APG Silica Trust's income and value over time remains uncertain, and decisions about payments must be based on estimates that cannot be done precisely, payments may have to be revised in light of experiences over time, and there can be no guarantee of any specific level of payment to claimants. However, the APG Silica Trustee shall use his or her reasonable best efforts to treat similar claims in substantially the same manner, consistent with his or her duties as APG Silica Trustee, the purposes of the APG Silica Trust, and the practical limitations imposed by the inability to predict the future with precision. In the event that the APG Silica Trust faces temporary periods of limited liquidity, the APG Silica Trustee may, with the consent of the APG Silica TAC and the APG Silica Future Claimants Representative, suspend the normal order of payment and may temporarily limit or suspend payments altogether.

Doc. No. 5427-5.

The Silica Trust Agreement provides, at ¶ 1.3 ("Transfer of Assets"), "As provided in article 4.2.3 of the GIT Plan, after the Effective Date the Debtors will deliver to the APG Silica Trust the assets that will fund the APG Silica Trust." Doc. No. 5427-3.
Section 4.2.3 of the Plan ("Funding of the APG Silica Trust") provides:

(a) Within thirty (30) days after the Effective Date, the APG Debtors shall transfer to the APG Silica Trust the right to receive approximately $35.5 million in proceeds from the APG Settlement Fund consisting of (a) 6% of the proceeds of APG and APG Services' settlements with Continental Insurance Company, Federal Insurance Company and Great American Insurance Company;
(b) 50% of the amount that has been recovered pursuant to the settlement of the APG KWELM Policies;
(c) 50% of the amount that had been recovered from the issuers of APG Insolvent Policies as of September 1, 2005;
(d) 6% of the amount recovered from the issuers of APG Insolvent Policies after September 1, 2005;
(e) $5.272 million of the proceeds of APG and APG Services' settlement with Royal Insurance Company of America;
(f) $2.144 million of the proceeds of APG and APG Service's settlement with Fireman's Fund; and
(g) $4 million in proceeds from the settlement between the APG Debtors and certain Travelers insurance companies, all of which proceeds shall be due and owing to the APG Silica Trust immediately upon said transfer and/or over time according to the terms of the respective settlement agreements through which the proceeds were generated.
(b)(i) Within thirty (30) days after the Effective Date, the appropriate APG
Debtors and GIT shall transfer, grant and assign to the APG Silica Trust (x) the right to receive 6% of the proceeds, if any, derived from the issuers of APG Insolvent Policies, and (y) the APG Silica Trust Policy Rights, including any rights to insurance coverage for APG Silica Trust Claims that APG has or could have asserted under the APG Silica Trust Policies on account of APG Silica Trust Claims and APG Silica Demands that have been or could be channeled pursuant to the APG Silica Channeling Injunction to the APG Silica Trust.

(b)(ii) Within thirty (30) days of the ten year anniversary of the Effective Date, the APG Debtors and/or GIT shall transfer to the APG Silica Trust $500,000 less: at the hearing on 10/29/12 Restivo said an add'l $120,000 would be added pursuant to a Stipulation between GIT and the Silica FCR. Tr. 10/29/12, Doc. No. 10878, at 15. See Stipulation Regarding Debtors' Funding to APG Silica Trust, Doc. No. 10808.
(1) the aggregate sum of all amounts paid to or for the benefit of the APG Silica Trust for APG Silica Trust Claims under the APG Silica Trust Policies Issued to GIT identified on Exhibit GIT E-3 as having been issued to RHI America, RHI Refractories America and/or RHI Refractories Holding Company (the "RHI Policies"); and
(2) in the event that a settlement is reached with the issuer of a RHI Policy which settlement results in the release, in full or in part, of rights under one or more of the RHI Policies, the pro-rata share of all payments made or to be made by such insurer(s) under the settlement allocated to the released RHI Policy(ies) based upon the product liability limits available under all policies within the scope of such settlement on a single occurrence basis.
(c) Notwithstanding anything in this GIT Plan to the contrary and for the avoidance of doubt, the APG Debtors and GIT shall not transfer, grant or assign to the APG Silica Trust or any other Entity any rights, claims for coverage, causes of action, or choses of action for coverage claims, demands, or other entitlements to insurance proceeds, or any extra-contractual rights (including any statutory or common law bad faith or unfair claim handling rights) arising under or in connection with any claim or demands alleging that the injury of the Entity in respect of which such claim or demand is made (i.e. his or her first exposure to silica) commenced after the Petition Date.

Doc. No. 7827.

251. The APG Silica TDP also contains adequate safeguards to avoid the payment of fraudulent or invalid APG Silica Trust Claims. See, e.g., note 19, supra.

252. The contributions to the Reorganized Debtors that will result from the RHI AG Settlement (including the RHI Contribution) and the settlements with the Settling Insurers are sufficient to provide those parties with the benefit of the APG Silica Channeling Injunction.

253. The APG Silica Trust will be funded with approximately $39.3 million in proceeds from settlements with, among others, the Settling Insurers, and with an assignment of the APG Silica Trust Policy Rights. (GIT Plan, §4.2.3(a).)

254. Approval of the APG Silica Channeling Injunction is also necessary and appropriate under standards arising under §§105(a) and 1123(b)(6) of the Bankruptcy Code. Section 1123(b)(6) of the Bankruptcy Code authorizes a plan of reorganization to "include any other appropriate provision not inconsistent with the applicable provisions of this title." 11 U.S.C. §1123(b)(6). Based upon §§1123(b)(6) and 105(a) of the Bankruptcy Code, the Bankruptcy Court has authority to enter channeling injunctions in favor of non-debtor beneficiaries in appropriate circumstances. See also In re Dow Corning Corp., 280 F.3d 648, 658 (6th Cir.), cert. denied, 537 U.S. 816 (2002).

255. The APG Silica Channeling Injunction substantially satisfies the factors enunciated in In re Dow Corning Corp., 280 F.3d 648, 656-58 (6th Cir. 2002), and as such, the injunction is appropriate. Specifically:

(a) There is an identity of interests between the Debtors and the nondebtor beneficiaries of the APG Silica Channeling Injunction. All such beneficiaries are entities that are indemnified by the Debtors, related parties, or entities that have had substantial contributions made on the Debtors' behalf.
(b) The APG Silica Channeling Injunction is necessary to the
Debtors' reorganization.
(c) 12/21/12 draft has this ¶ labeled (d) The impaired class of APG silica claims voted overwhelmingly in favor of the GIT Plan. (Oct. 18, 2006, Logan Decl., ¶ 6.)
(d) The GIT Plan provides for the adjudication, liquidation and payment of APG Silica Trust Claims and Demands through the trust distribution procedures established for the APG Silica Trust. The APG Silica TDP are designed to ensure that the trusts are in a position to pay in a fair and equitable manner the Claims and Demands that are subject to the injunctions.
(e) The Silica Trust was created after good faith, arm's length negotiations, and there was no collusion between the Debtors' counsel for the silica claimants or counsel for any other constituency, including the Asbestos Claimants Committee, the Future Claimant's Representative, and their counsel.

E. Additional Conclusions of Law

256. The RHI Contributions are substantial contributions to the APG Asbestos Trust and the APG Silica Trust and the estates, and are fundamental, integral and essential components of the Debtors' reorganization. The GIT Channeling Injunction, as applied to RHI AG Entities with respect to any person that might subsequently assert APG Asbestos Trust Claims, APG Asbestos Demands, APG Silica Trust Claims, and APG Silica Demands against an RHI AG Entity, is (a) fair and equitable in light of the direct and indirect benefits to be provided to the PI Trusts and the estates as a result of the RHI Contributions, and (b) essential and necessary to the Debtors' reorganization because, among other reasons, the RHI AG Parties would not be willing to make the RHI Contributions without the protection provided by the GIT Channeling Injunction. (Karhut Decl., ¶ 22.)

257. Article 4.4 of the GIT Plan sets forth provisions that protect the policy and other rights of the insurers who issued the APG Silica Trust Policies, notwithstanding the assignment of the APG Silica Trust Policy Rights to the APG Silica Trust. See Doc. No. 10844, Amended Composite Plan Documents. Among other things, Article 4.4 of the GIT Plan preserves said insurers' rights to deny coverage for any silica-related claims submitted to any of said insurers by the APG Silica Trust, and specifies that the APG Silica Trust's resolution or compensation of any APG Silica Trust Claim shall have no binding effect on those insurers for any purpose.

258. The assignment of the APG Silica Trust Policy Rights to the APG Silica Trust is appropriate under the Bankruptcy Code and relevant state law, notwithstanding any language in the APG Silica Trust Policies that may attempt to restrict or limit the ability of the Debtors to assign such rights. See In re Federal-Mogul Global, Inc., 684 F.3d. 355 (3d. Cir. 2012); In re Combustion Engineering, Inc., 391 F.3d 190, 218, n.27 (3d Cir. 2004).

259. The GIT Plan is insurance-neutral, and does not harm the interests or rights of insurers on the basis of its provisions relating to the APG Silica Trust and/or the APG Silica Channeling Injunction.

VII. FINDINGS IN ACCORDANCE WITH REMAND ORDER OF COURT OF APPEALS

The Court of Appeals expressed several concerns and remanded to this Court so those concerns could be addressed We have done so as follows.

At the confirmation hearing held on October 29, 2012, after remand by the Court of Appeals, James Restivo, counsel for Debtors, testified. There were no objections to his testimony and no parties in interest sought to cross-examine.

Mr. Restivo testified that after the remand, motions were filed, discovery conducted, and argument followed. By June 6, 2012, GIT and the remaining objecting insurers²⁶ settled and the insurers withdrew objections.²⁷ Certain Technical Amendments were filed to account for various settlements as well as the passage of time since the confirmation hearings in 2006 and 2007. See Doc. Nos. 10698, 10746.²⁸

26 The insurers were Century Indemnity Company and Westchester Fire Insurance Company for itself and for International Insurance Company (now known as TIG Insurance Company), Doc. No. 10742; certain Hartford insurers (First State Insurance Company and Hartford Accident and Indemnity Company), Doc. No. 10732; and certain Chartis insurers ("the Chartis Companies") (see Tr. 10/29/12,Doc. No. 10878, at 36) ("American Home Assurance Company, Granite State Insurance Company, The Insurance Company of the State of Pennsylvania, Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, Pa., Starr Excess Liability Insurance International Ltd., now known as Chartis Excess Limited and any other direct or indirect subsidiary of Chartis, Inc. that provided insurance coverage that insured or is alleged to have insured A.P. Green for Silica-Related Liability Claims and Demands and their predecessors, successors, assigns and their respective past, present and future parents, subsidiaries and affiliates, employees, officers, directors, principals, agents, representatives and shareholders acting in those capacities of any of the foregoing, as more fully set forth in Section 1.18 of the Settlement Agreement"). Doc. No. 10733 at 1 -2, n.1. Counsel to the Chartis Companies raised certain issues at the confirmation hearing on October 29, 2012, but on October 31, 2012, counsel for Debtors filed a Certification of Counsel, Doc. No. 10875, stating that upon further review the parties were in agreement that no revision to the proposed confirmation order was necessary. No other party in interest raised a concern and the court agrees that the confirmation order is appropriate and shall enter it as modified herein.

27 Section 4.2.3 of the plan and certain definitions in the plan were amended to reflect the settlements with Century, Hartford and Chartis. See Doc. No. 10698 at 4, ¶ 9, August 29, 2012, Technical Amendments to Third Amended Plan dated December 28, 2005. As a result, the newly settled insurers are now included as settled insurers, are trust funding insurers, and the settled policies are added to the definition of "policies." These insurers are now included as protected entities.

28 "At the October 29, 2012, hearing the following detailed explanation was provided by Mr. Restivo under oath:

Those technical amendments do not adversely change the treatment of the claim of any creditor or any equity security holder. Indeed, those amendments add to the Silica Trust approximately$3.8 million. And so, they enhance one class of creditors but they do not adversely affect any other creditors.
With respect to the amendments, Your Honor, Section 4.2.3 was amended to reflect and conform to the three settlement agreements with the three objecting insurers. And in order to do that, various definitions in the plan were amended in general . . . . The three most recent settled insurers become included in the definition of trust funding insurers, in the definition of settled insurers. The policies that have been settled are added to the definition of policies. A defined term called the APG Silica insurance settlements has been added to specifically reference those three settlements. And those insurers are defined as protected entities and also as trust funding insurers.

And so, the changes to the definitions were designed to incorporate into our plan three separate settlement agreements.
In addition, Your Honor, with respect to both the GIT plan, GIT/Silica plan -- with respect to the Silica Trust in GIT and with respect to the asbestos trust in GIT, an amendment has been made to account for Medicare and Medicaid reporting requirements, if someone has such requirements under the law, which is very confusing right now, and I think all of the parties do not believe they should have any reporting requirements, but if they do, the trusts will have information that will be needed for reporting. And so, amendments have dealt with reporting requirements. A few of the exhibits have been amended, Your Honor, in order to list the insurance policies being settled, in order to remove insurance policies being assigned. And so, minor changes have been made to the exhibits to simply conform with the settlement agreements and what I've just reported.
Your Honor, at Docket Number 10700, is the supplemental declaration of the president of ANH Refractories Company, Jon Allegretti. That supplemental declaration incorporates his prior declaration and updates information since 2006/2007.
Mr. Allegretti's declaration, in Paragraph 14, reiterates that in 2012, as was true in 2006 and 2007, the Silica injunction and the Silica Trust are necessary features of the GIT plan because there are at least 4600 Silica related claims that have been voted. And there is likely to be future Silica claims and ANH, reorganized ANH, the parent company of these various reorganized companies, simply will not have the financial capacity to pay for the defense and indemnity of these claims.
Paragraph 16 affirms that there's been no material change in the sources of funding available to the reorganized debtor. And Paragraph 16 and Paragraph 17 certify that the reorganized debtors, free cash flow, will continue to be consumed by capital expenditures, pension and post employment benefits for the unionized workforce.
In addition, Mr. Allegretti reconfirms that its post confirmation credit facility prevents the reorganized company from using borrowed funds to pay Silica claims. And a large judgment in any Silica case could cause the lenders to cease lending.

And then, lastly, and we believe most importantly, the Silica injunction and the APG Silica Trust, permit the debtors to cap and fund what otherwise would be an unknown, unfunded Silica liability.
In addition, Your Honor, at the same time, at Docket 11 Number 10699, we filed the declaration of James J. Restivo, Jr., affirming that. There was absolutely no collusion to trade the creation of a Silica Trust for votes in favor of the asbestos trust. We will deal with those facts by way of testimonial evidence in the record at the end of these summaries.
As a result of the work I've just described and the withdrawal of all objections and the updating of certain business information, we have provided to the Court updated findings of fact. The findings of fact that have been modified or updated are Numbers 5, 98, 107, 111, 112, 130 to 134, 136, 138, 152, 161, 159, 163 and conclusion of law, 198. What most of those do, Your Honor, is contain the same factual information but add as record support for the factual information, references to the Allegretti or Restivo declarations." Tr. 10/29/12, Doc. No. 10878, 10 - 14.

Jon Allegretti, President of ANH Refractories Company and various affiliated companies including GIT, filed a supplemental declaration at Doc. No. 10700 in support of the Technical Amendments to the Third Amended Plan and to account for the passage of time and the occurrence of events since the filing of his first declaration on May 23, 2006, Doc. No. 6028. In the supplemental declaration Mr. Allegretti states:

14. In my business judgment, the Silica Injunction and the APG Silica Trust are necessary features of the GIT Plan because there are approximately 4,636 silica-related claims (see Supplemental Declaration of Kathleen M. Logan (GIT Document No. 6750]), and I do not believe that Reorganized ANH will have the financial capacity to pay for defense and indemnity costs relating to such claims if prosecuted in the tort system. Indeed, my conclusion that further reorganization of Reorganized ANH will not be necessary is based, in part, upon the implementation of the Silica Injunction and the creation of the APG Silica Trust.
15. Mr. Nystrom²⁹ determined that, without the APG Silica Trust and the Silica Injunction, Reorganized ANH will not have sufficient assets to defend and resolve all of the silica-related claims in the tort system. See Revised Supplemental Expert Report of Kevin Nystrom [GIT Document No. 6741] at ¶ 26.
16. Having reviewed Mr. Nystrom's expert report, I conclude that there has been no material change in the sources of funding available to Reorganized ANH post-bankruptcy. First, I do not believe that Reorganized ANH will have sufficient free cash to discharge the estimated liability for silica-related personal injury claims in the tort system. Reorganized ANH's free cash will continue to be consumed by capital expenditures, pension and post-employment benefits for Reorganized ANH's unionized workforce. Second, Reorganized ANH's postconfirmation credit facility prevents it from using such borrowings to pay silica related claims. Moreover, a large judgment in a case involving a single silica claim could cause the lenders to cease lending and trigger another bankruptcy filing. Third, there is no certainty that the insurance proceeds to be contributed to the APG Silica Trust will be available to Reorganized ANH in the absence of the formation of the APG Silica Trust.
17. The Silica Injunction and the APG Silica Trust permit the GIT Debtors to cap its [sic] unknown silica liability. Capping the unknown liability posed by the thousands of silica-related claims, in my business judgment, is in the best interests of the GIT Debtors and is crucial to their effective reorganization. I am not alone in this opinion. The Objecting Insurers' expert, Daniel F. Dooley, testified at the confirmation hearings that, from a cost-benefit perspective, it is better to cap an unknown liability than not to cap it. See Tr. of Confirmation Hr'g on October 26, 2006, at 300, In re Global Industrial Technologies, Inc., et al., No. 02-21626 (Bankr. W.D. Pa.). Such testimony echoed statements made by Mr. Dooley in his deposition to the effect that it is in the Debtors' best interest to cap an unknown liability by an assignment of insurance if it is possible to do so. See DEP. of Daniel F. Dooley on October 6, 2006, at 82-83, In re Global Industrial Technologies, Inc., et al., No. 02-21626 (Bankr. W.D. Pa.).
18. Not only do I believe that the Silica Injunction and the APG Silica Trust are necessary, but I also believe that they are fair. The APG Silica Trust is fair because it ensures that future and present claimants will be treated alike. Further, the silica claimants voted overwhelmingly to approve the GIT Plan. In my view, the only material change to the APG Silica Trust since 2006 is that, as a result of the settlement agreements with the Objecting Insurers, the total amount of guaranteed cash to the APG Silica Trust has increased.

Doc. No. 10700 at 4 - 6, ¶¶ 14 - 18 (emphasis in original).

29 Kevin Nystrom is Senior Director of Kroll Zolfo Cooper, LLC, a firm that provides strategic and financial advisory services in large-scale corporate restructuring transactions. Doc. No. 6030, Declaration of Kevin Nystrom, at 2, ¶ 2.

Mr. Restivo filed a declaration, Doc. No. 10699, and testified at the October 29, 2012, hearing, describing the silica-related claims that led to the Court of Appeals' remand opinion. The declaration is quoted at length inasmuch as it clearly explains the circumstances surrounding the notice with respect to silica claims and concisely illustrates why the allegations of collusion and "crime-fraud" by insurance counsel and the suggestion of "ginned-up" claims by the Court of Appeals were unfounded, mistaken, and without record support. Neither the declaration nor his testimony was challenged, contradicted, or questioned and his testimony was consistent with his declaration. We credit Mr. Restivo's recitation of the facts. Mr. Restivo wrote:

7. As of the Petition Date, A.P. Green Industries, Inc. ("APG"), one of the Debtors, faced 169 silica-related liability claims, in addition to hundreds of thousands of asbestos-related liability claims. During the course of discovery in this bankruptcy case, I learned that prior to the Petition Date, APG's primary liability insurer had spent $247,531 defending 17 silica-related liability lawsuits, six of which settled for a total of $65,000 -- including a single silicosis case that settled for $50,000 -- for a paid settlement average of $10,833 per claim.
8. After the Petition Date, the Debtors' management and I began to learn of a rapid increase in the incidence of silica-related liability suits filed in various tort system venues around the country that was taking place at that time -- all while the automatic stay of litigation (pursuant to Section 362 of the Bankruptcy Code) was protecting APG from such lawsuits. These tort system lawsuits
targeted (among others) refractory product manufacturers whose products and operations were similar to those of APG.
9. Through my representation of APG's sister company, Harbison-Walker Refractories Company ("Harbison") -- which produced and sold refractory products that were substantially similar in composition and use to those produced and sold by APG -- I learned that prior to its bankruptcy filing, Harbison had resolved at least 280 silica-related liability lawsuits, for an average settlement value of $4,700 per claim. At some point, I learned that in the In re Mid-Valley, Inc. bankruptcy, the Debtor settled 18,000 silica claims against Harbison for approximately $110 million.
10. After researching and analyzing the foregoing information, I concluded that APG's silica-related liabilities could significantly threaten the Debtors' post-reorganization viability if they were not addressed as part of the Debtors' reorganization plan. Subsequent analyses performed by the Debtors' financial consultant, Kevin Nystrom, and by Dr. Timothy Wyant, a biostatistician who estimated the number of silica claims that may be asserted against APG in the future, confirmed this conclusion.
11. As a result, the Debtors decided to include in their plan of reorganization a channeling order and personal injury trust to resolve silica claims arising from exposures to APG silica-containing products or silica-related operations.
12. After reaching agreement on this conceptual framework with the Asbestos Claimants Committee (the "ACC") and the Asbestos Future Claimants Representative (the "Asbestos FCR") that were appointed in the Debtors' bankruptcy case, the Debtors filed their first preliminary version of a plan of reorganization on July 31, 2003. This initial proposed plan included a trust for non-asbestos bodily injury claims, which would include silica-related bodily injury claims. The disclosure statement filed on July 31, 2003, expressly stated that the Debtors had reached an agreement in principle with the ACC and the Asbestos FCR as to the framework for the plan, including the trust for non-asbestos bodily injury claims.
13. In subsequent versions of the plan (including the version now before this Court), the Debtors refined the non-asbestos trust concept so that the non-asbestos trust would be limited to resolving only claims arising from exposures to APG silica-containing
products or silica-related operations that occurred prior to the Petition Date (the "APG Silica Trust").
14. Because the Section 362 automatic stay of litigation prevented claimants from asserting APG silica claims against the Debtors after the Petition Date, and given the limited number of APG silica claims pending against the Debtors as of the Petition Date, the Debtors needed a way to identify the body of APG silica claims it might face in the tort system, so that it could devise a strategy for how the APG Silica Trust would resolve those claims as part of the plan of reorganization.
15. From past experience, I was aware of certain law firms that represented large numbers of personal injury claimants in jurisdictions where the Debtors expected that APG silica claims could have been filed against them in the tort system absent the Section 362 automatic stay. Chief among these firms was Provost Umphrey LLP, in the person of Bryan O. Blevins, Esq., a partner at that firm. Through discussions I had with Mr. Blevins in 2003 and 2004, I learned that his firm represented hundreds of claimants who alleged injury due to pre-Petition Date exposure to APG silica-containing products, and whose claims could not proceed against APG in the tort system due to the Section 362 automatic stay. I began negotiations with Mr. Blevins regarding a process for a resolution of those claims (and others like them) via an APG Silica Trust in the Debtors' plan of reorganization.
16. At all times, my negotiations with Mr. Blevins were at arm's-length, and were conducted in good faith. The only purpose of these negotiations was to construct a process to resolve APG present and future silica claims which, according to every indication we had, would threaten the viability of the Debtors' reorganization if those claims were to proceed against the Debtors in the tort system post-reorganization.
17. I had no discussions with Mr. Blevins with respect to any asbestos claims against the Debtors held by clients of his law firm. I had no conversations in which it was stated, implied or suggested that the Debtors would establish a silica trust in exchange for votes in favor of the Debtors' plan of reorganization by asbestos claimants represented by Mr. Blevins or any other attorney. Neither I nor anyone on behalf of the Debtors ever stated, suggested or implied that the channeling injunction and the APG Silica Trust were being offered to attract support for the plan
of reorganization from asbestos claimants or their counsel. Indeed, by the time I began my discussions with Mr. Blevins about silica claims, the Debtors already had reached agreement with -- and had obtained the support of -- the ACC, which serves as the official representative of asbestos claimants and the Asbestos FCR, as to the intended treatment of asbestos claimants under the plan of reorganization.
18. One of the central issues the Debtors confronted was the funding of the APG Silica Trust. I identified two primary sources for this purpose. The first source was the proceeds from settlements of certain insurance policies issued to A.P. Green Services, Inc., an affiliate of APG and one of the Debtors, which policies provided coverage for both asbestos-related and silica-related claims (the "Services Policies"). The second source was the right to recover proceeds from non-settled insurance policies issued to APG and certain other Debtors, which policies provided coverage for silica-related liabilities, but contained coverage exclusions for asbestos-related liabilities (the "Other Policies").
19. At the time of my negotiations with Mr. Blevins, the Debtors already had reached, or were working on, settlements of the Services Policies which ultimately would result in the recovery of approximately $350 million. Prior to our focus on the Debtors' APG silica-related liabilities, the full amount of those proceeds was expected to fund the personal injury trust for APG asbestos claims (the "APG Asbestos Trust") that was being created under the Debtors' plan of reorganization. This expectation was shared by the ACC and the Asbestos FCR. However, given the Debtors' subsequent concern over silica claims, as well as the fact that the Services Policies provided coverage for APG asbestos-related and APG silica-related claims, the Debtors desired to use a portion of the proceeds from the settlements of the Services Policies to fund the APG Silica Trust.
20. This determination led to another round of negotiations involving the Debtors, the ACC, the Asbestos FCR, Mr. Blevins and the Silica Future Claimants Representative (the "Silica FCR"). I served as the Debtors' lead negotiator in these negotiations. These negotiations focused on a single, discrete issue: how much of the proceeds from the settlements of the Services Policies could be from the APG Asbestos Trust to fund the APG Silica Trust.
21. These negotiations were at arm's-length; in fact, they often
were contentious, and occasionally were rancorous. Each party was represented by legal counsel.
22. There was no suggestion by me or anyone on behalf of the Debtors (or anyone else involved in these negotiations) that the division of the proceeds from the settlements of the Services Policies was offered to attract support for the plan of reorganization from any APG asbestos claimants or their counsel. Indeed, these negotiations did nothing but decrease the amount that would otherwise have been available to APG asbestos claimants in the APG Asbestos Trust. Again, the only purpose of these negotiations was to resolve APG silica claims, which the Debtors believed would threaten the viability of the Debtors' reorganization if those silica claims were to proceed against the Debtors in the tort system post-bankruptcy.
23. These negotiations ultimately resulted in an agreement to have approximately $31.5 million of the proceeds from the settlements of the Services Policies go to fund the APG Silica Trust.
24. Additionally, the Debtors decided to assign to the APG Silica Trust the right to pursue and receive proceeds for APG silica claims under the Other Policies, which contain exclusions for asbestos claims and therefore were not available to fund the APG Asbestos Trust.
25. The decision to assign rights to proceeds under the Other Policies to the APG Silica Trust was a good faith attempt to facilitate a process to resolve the APG silica claims. There was no suggestion by me or anyone on behalf of the Debtors -- or anyone else involved in these negotiations -- that the assignment was offered to attract support for the plan of reorganization from any asbestos claimants.
26. The negotiations described above culminated in the filing of the Debtors' Third Amended Plan of Reorganization Dated December 28, 2005 (the "Plan"). Solicitation of votes on the Plan took place in early 2006. Notice of the Plan was published in national publications with broad circulation. Additional notice was provided by mailings to known claimants and their counsel and to a list of personal injury lawyers and law firms that had been compiled by Pittsburgh Corning Corporation from its own records and from publicly available information from other major asbestos bankruptcy cases. The decision to use the Pittsburgh Corning list
was based solely on the fact that it was the most comprehensive list available of attorneys representing asbestos claimants and would therefore provide the broadest possible notice.
27. I am counsel to Pittsburgh Corning Corporation in its bankruptcy case (In re Pittsburgh Corning Corp., Bankr. No. 00-22876 (Bankr. W.D. Pa.)). I served as counsel to Pittsburgh Corning for decades prior to its bankruptcy filing. I can state that Pittsburgh Corning has never found any claims based on exposure to silica. The Pittsburgh Corning solicitation list was not a list of attorneys for silica claimants, and the Debtors did not use the Pittsburgh Corning solicitation list out of some incorrect assumption that it was a list of such attorneys.

Restivo Decl., at 2 - 7, ¶¶ 7 - 27.

Mr. Restivo expanded on ¶ 27 at the October 29, 2012, hearing in light of the Court of Appeals' reference to Debtors having "obtained a list of silica claimants from another company's bankruptcy and then solicit[ing] confirmation votes from those claimants' counsel" which supposedly resulted in "[a]n explosion of silica claims." 645 F.3d at 206. The "other company" was Pittsburgh Corning Corporation.³⁰ However, as Mr. Restivo's declaration dated August 28, 2012, and his testimony on October 29, 2012, make clear, Debtors did not obtain a list of silica claims from Pittsburgh Corning Corporation because that entity does not have any silica claims. The mailing list was of Pittsburgh Corning's asbestos personal injury claims because that was the most comprehensive mailing list of asbestos plaintiffs' attorneys available at the time. Testimony of Mr. Restivo, Tr. 10/29/12, Doc. No. 10878, at 30 - 31. Mr. Restivo, who also represents Pittsburgh Corning in its bankruptcy, testified that the identification of law firms handling silica claims was facilitated by Mr. Blevins of Provost Umphrey Law Firm LLP to ensure, along with publication of notice with respect to silica claims and direct notice to known silica claimants, the broadest and most effective notice Debtors could achieve.³¹ Id.

30 Bankr. No. 00-22876, W.D. Pa.

31 "Due process requires notice 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, __, 130 S.Ct. 1367, 1378 (2010), quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).

Nowhere in the record of this case, before or after the opinion of the Court of Appeals was issued, is there support for an inference of fraud, "ginned-up claims," or abuse of the bankruptcy system. The Court of Appeals refers to "allegations of collusion between GIT and the asbestos claimants' counsel." 645 F.3d at 214. It is not clear from the opinion if the reference is to counsel for the Asbestos Creditors' committee or the many firms which represent plaintiffs in the tort system. The opinion of the Court of Appeals refers to "a more searching review of Hartford's and Century's allegations of collusion between the debtors and counsel for the silica claimants." Id. at 215. As noted above, the Debtors had already reached a settlement with counsel for the ACC and the FCR before they began discussions with Mr. Blevins with respect to silica claims. There is no evidence that the ACC, FCR, or counsel for either of them were involved in silica discussions. Likewise, there is no evidence of collusion between or among Debtors, their counsel, or counsel for the silica claimants. We note that counsel implicated in the allegations of fraud and collusion (counsel for Debtors, the ACC, and Mr. Blevins) and their respective firms are highly respected in their fields and jurisdictions and have been recognized as such by their peers and professional organizations, among others.

This Court again reviewed the record and solicited citations to the record from insurance counsel based on the Court of Appeals' statement that the allegations of collusion were "not without record support." The Court of Appeals did not cite to the record and the insurers were unable to do so, notwithstanding discovery, a long period of time to provide such citations, plus an extension of that time. We therefore find that the evidence conclusively and overwhelmingly establishes that there was no collusion, no fraud, and no improper solicitation of votes. Notice of the plan was proper and the increase in the number of claims is neither out of the ordinary (not only for the silica claims but for the asbestos claims as well) nor the result of improper conduct or motive by any party in interest.³² The GIT Plan and the Silica TDP provide mechanisms to ensure that claims of disease are properly diagnosed by qualified medical personnel and that they are supported by medical (and exposure) evidence.

32 In a case involving present and future mass tort victims, the purpose of broad notice is to alert all possible claimants of the opportunity to vote on the plan and of how the plan and TDP will affect their interests.

The insurers' contention, which they no longer pursue, that the increase in silica claims somehow harms them is no different from these and other insurers' assertions in the context of asbestos bankruptcy cases. Insurers' liability is fixed when the event giving rise to coverage occurred within the policy period, whether or not a claim was made within the period.³³ Therefore, the fact that more silica claimants came forward once notice issued³⁴ does not affect the number of valid claims.³⁵

33 See In re Federal-Mogul Global, Inc., 385 B.R. 560, 567 (Bankr.D.Del. 2008), affirmed 684 F.3d 355 (3d Cir. 2012) ("once an event occurs that gives rise to the insurer's liability under the policy, the policy itself can be assigned. See generally 3 Couch on Insurance § 35.7 (3d ed.1999). See also In re Western Asbestos Co., 313 B.R. 456, 462 (Bankr.N.D.Cal.2004), affirmed 2004 WL 1944792 (N.D.Cal. April 16, 2004) (policies or rights transferable under 11 U.S.C. §1123(a)(5) notwithstanding contrary state law); Viola v. Fireman's Fund Insurance Co., 965 F.Supp. 654, 658 (E.D.Pa.1997) ("[u]nder Pennsylvania law, an insurer may not limit an insured's ability to assign ... rights under a policy after the occurrence of the event which gives rise to the insurer's liability")). As recognized by the District Court for the Eastern District of Pennsylvania in Viola, "[a]fter a loss has occurred, the right of the insured or his successor in interest to the indemnity provided in the policy becomes a fixed and vested right; it is an obligation or debt due from the insurer to the insured, subject only to such claims, demands, or defenses as the insurer would have been entitled to make against the original insured." In re Federal-Mogul Global Inc., 385 B.R. at 567 quoting Viola, 965 F.Supp. at 658.

34 The automatic stay precluded claimants from suing. The case was filed in February of 2002. The order approving the contents and service of the solicitation package was entered in January of 2006, four year later. Thus, the fact that the number of silica claimants casting votes was greater than the number known to exist on the date the bankruptcy was filed is not suspect in and of itself. Further, the fact that there were votes cast does not, as noted, affect the validity of any claims. Claims must be submitted to the Trust and pass muster.

35 In fact, in this case, an additional 39,228 asbestos claims were voted in A.P. Green's case that were not pending when these bankruptcy cases were filed. Testimony of Mr. Restivo, Tr. 10/29/12, Doc. No. 10878, at 29. See In re ACANDS, Inc., 297 B.R. 395, 398 (Bankr.D.Del. 2003) (pace of asbestos claims accelerate when many other target asbestos defendants file bankruptcy). When W.R. Grace & Co., et al., Bankr. No. 01-1139, D. Del., for which Mr. Restivo was special asbestos counsel, was filed, only eight property damage cases and eight Zonolite attic insulation class actions were pending. Postpetition and after notice of the bar date was issued that number increased from 16 to 4,400. Testimony of Mr. Restivo, Tr. 10/29/12, Doc. No. 10878, at 29 - 30. It is well recognized that bankruptcy accelerates all claims. See, e.g., In re Oakwood Homes Corp., 449 F.3d 588, 605 (3d Cir. 2006) (§502(b)(2) of the Bankruptcy Code authorizes acceleration of claim).

We note that coverage issues do not arise with respect to the payment of claims by bankruptcy trusts until the trust is in existence, pays a claim, and seeks to recover from an insurer. Due to "insurance neutrality" clauses in this and other bankruptcy cases addressing asbestos and silica claims,³⁶ if and when a trust seeks to recover from an insurer, the insurer has all its rights, defenses, etc., as in any other coverage situation.³⁷

36 It is worth noting again that the DII and Kaiser Aluminum bankruptcy cases also resolved silica claims through silica trusts. See notes 12 and 40 herein.

37 "[A]fter events giving rise to the insurer's liability have occurred, the insurer's risk cannot be increased by a change in the insured's identity." In re Federal-Mogul Global, Inc., 684 F.3d 355, 379 (3d Cir. 2012), quoting 3 Couch on Insurance §35.8. See also note 33, supra.

Mr. Restivo's declaration continues with the following statements which are supported by the record:

28. Over 4,600 votes were returned by holders of Class GIT 5-A claims (i.e. APG silica claims). These included votes by clients of Mr. Blevins and votes by claimants represented by 15 other law firms that had no involvement in any of the negotiations relating to the creation and funding of the APG Silica Trust. The vote by the Class GIT 5-A claimants overwhelmingly favored confirmation of the Plan.
29. Certain of the Debtors' insurers objected to confirmation of the Plan, and expressed a belief that the creation of the APG Silica Trust involved improper collusion between the Debtors and certain tort claimants. After days of confirmation hearings, this Court entered an order confirming the Plan. The objecting insurers subsequently pursued an appeal to the United States Court of Appeals for the Third Circuit (the "Third Circuit").
30. The Third Circuit, after hearing the appeal en banc, issued a 6-4 decision vacating the confirmation order and remanding the case to this Court. The majority opinion expressed a belief that the insurers' allegations of collusion between "GIT and the asbestos claimants' counsel," or between "the debtors and counsel for the silica claimants," were "not without record support" -- though the majority did not identify any specific record evidence to substantiate that remark. In re Global Indus. Techs., Inc., 645 F.3d at 214, 215. The dissent vigorously disagreed with this characterization, describing the objecting insurers' collusion charges as "nothing more than bald, unsubstantiated inference," and commending this Court for its thorough review of the record. Id. at 217 n.2.
31. Having been intimately involved in creating the evidentiary record of this case, and having closely reviewed and analyzed the record during my work on the appeals, I know of no evidence in the record (or, for that matter, outside the record) which supports any allegations of collusion.
32. On remand, this Court ordered the sole remaining objecting insurer (the other two insurers having settled by that time) to answer a series of simple questions: "[W]hat are the allegations of collusion, by and between whom, and where is the record support?" May 14, 2012, Omnibus Hrg. Tr. at 21:9-11. In response, that insurer identified two pieces of purported record support: (1) the notion that the Debtors' July 31, 2003 plan did not include a silica trust and lacked the support of asbestos claimants -
- which supposedly gave rise to an inference that the subsequent addition of a silica trust was necessary to win those claimants' support; and (2) the "surge" in the number of silica claims submitted through the solicitation process, as compared to the number of such claims asserted against APG prior to the Petition Date.
33. On closer review, neither of these two pieces of information supported the collusion theory. First, the characterizations of the July 31, 2003 plan were mistaken, and gave rise to no inference of collusion. As stated above, the July 31, [2003]³⁸ plan did include a trust to resolve silica claims, and the accompanying disclosure statement expressly stated that the plan was submitted with the agreement of the ACC and the Asbestos FCR.
34. Secondly, the "surge" in the number of silica claimants who responded to the Debtors' solicitation of votes in the bankruptcy case is unremarkable. In my experience, such an increase in claims is the usual response in the context of soliciting votes on bankruptcy reorganization plans. Indeed, APG experienced a similar "surge" in the number of asbestos claims voted through the solicitation: whereas APG faced 235,757 asbestos claims as of the Petition Date, it received 274,985 asbestos claimant votes through the solicitation process. Thus, as compared to the number of claims pending as of the Petition Date, the Debtors experienced a "surge" of 39,228 APG asbestos claims and, by contrast, a much smaller "surge" of approximately 4,400 APG silica claims.
35. Finally, the concern that the Debtors set up a system in which they would pay for newly "ginned-up" silica claims in exchange for favorable votes by asbestos claimants is disproven as a matter of simple math. Attached hereto as Exhibit A is a true and correct copy of the report of the Master Ballots received by the Debtors' voting agent, Logan & Company.³⁹ This report shows that 16 law firms submitted ballots in GIT Class 5-A (APG Silica
Trust Claims). One firm then filed a motion to withdraw its ballot. The remaining 15 firms submitted master ballots in GIT Class 4-A (APG Asbestos Trust Claims), voting a total of 34,089 asbestos claims. A total of 274,985 asbestos claims voted, with 262,678 voting in favor of the Plan and 12,307 voting against it. If all of the asbestos claims cast by firms that also had silica claims (GIT Class 5-A Claims) were changed to "no" votes, the result of the GIT Class 4-A voting would have been 228,589 in favor of the Plan and 46,396 opposed, or an approval percentage of 83%, which exceeds the 75% threshold of Section 524(g). Thus, the Debtors did not need the support of silica claimants to approve the treatment of asbestos claims under the Plan.

Doc. No. 10699, at 8 - 11, ¶¶ 28 - 37. (Emphasis in original.)

38 The Declaration mistakenly refers to July 31, 2013.

39 Mr. Restivo's declaration did in fact attach the Master Ballot Summary but we do not attach it to this Memorandum Opinion. The attachment referred to can be viewed at Doc. No. 10699.

In addition to the statements in his declaration, Mr. Restivo testified at the October 29, 2012, confirmation hearing and his testimony with respect to the circumstances concerning silica claims, the absence of any objections to or dispute with that testimony, and the insurers' failure and inability to point to any evidence, belie the insurers' charges, and the Court of Appeals' "findings," with respect to the so-called "collusion," "fraud," and the "record evidence" thereof regarding silica claims.

Mr. Restivo explained how he became aware of the threat of silica-related liabilities against A.P. Green and the origin of the threat. He testified that potential liability for silica claims relating to Harbison-Walker International Refractories, Inc., Bankr. No. 02-21630-JKF, jointly administered with GIT, had been transferred to a Dresser entity called DII Industries, LLC, jointly administered with Mid-Valley, Inc., Bankr. No. 03-35592-JKF. DII ended up with over 18,000 silica claims which exceeded $100 million. Tr. 10/29/12, Doc. No. 10878, at 20. Because the refractory products of A.P. Green were similar to those of Harbison-Walker and each had the same customers and usage, the potential exposure and liability would be similar. Id. In addition, a company called General Refractories had claims against A.P. Green stemming from A.P. Green's purchase of General Refractories assets. Because of that relationship, Debtors learned that General Refractories had more than 10,000 silica claims. As a result, Debtors concluded that A.P. Green had to address alleged prepetition asbestos and silica liability in order to successfully emerge from bankruptcy. Id. at 20 - 21. In addition, during the course of GIT's bankruptcy, Mr. Restivo, as counsel for Debtors, learned of 169 pending silica cases in an action in Texas. During the course of discovery with respect to a dispute with Travelers, A.P. Green's primary insurer, the parties learned that Travelers had defended a number of silica cases before bankruptcy counsel was retained. Travelers had defended 17 silica-related lawsuits which produced a defense cost of over $10,000 per case, at a cost to Travelers of about $250,000 representing amounts paid on the claims. Mr. Restivo further testified that Travelers had settled other silica cases for a total of $115,000. One of the settlements was for $50,000 resulting in a settlement average well over the Harbison-Walker silica settlement average of $4,700. Id. at 21 - 22. Based on these facts, Debtors concluded that a silica trust was necessary in order to reorganize.⁴⁰

40 Mr. Restivo further noted that both DII and Kaiser Aluminum Corporation, Bankr. No. 02-10429-JKF, Bankr. D. Del., had resolved silica liability through a silica trust in their bankruptcy cases. Id. at 22.

To facilitate this goal, Mr. Restivo identified the major law firms representing silica plaintiffs, including Provost Umphrey LLP ("Provost Umphrey") and Baron & Budd, P.C. Mr. Restivo met with Bryan Blevins of Provost Umphrey⁴¹ to inquire as to current silica claimants' interest in and willingness to negotiate with respect to a silica trust. At some point after that meeting Mr. Restivo was informed that silica claimants' attorneys were willing to negotiate. Mr. Restivo never discussed asbestos claims against A.P. Green with Mr. Blevins or a trade-off of silica claims and never held any negotiations with him concerning that subject. Id. at 22-23. To his knowledge, that was never a subject of discussion by anyone. Id. at 25. Furthermore, before Mr. Restivo ever contacted Mr. Blevins the GIT Asbestos Claimants' Committee ("ACC") and the Future Claimants' Representative ("FCR") had already reached an agreement in principle. Id. at 23. In addition, by the time a preliminary disclosure statement and plan were filed on July 31, 2003, Doc. No. 1599, the asbestos claimants had already agreed, in principle, to the concept of a non-asbestos trust as well as an asbestos trust.

41 Mr. Restivo testified that he also met with a partner from the Baron & Budd firm but could not recall who it was. Id. at 22.

Mr. Restivo further testified with respect to sources of funding for the silica trust. When he was retained for these bankruptcy cases insurance coverage litigation was on-going in Ohio between and among, inter alia, A.P. Green Services Company⁴² and five of its insurers. This Court ordered the parties to mediation which resulted in a settlement that provided approximately $350 million to be paid over time. Because the same policies covered silica claims as well as asbestos claims, Debtors suggested that some of the settlement proceeds be allocated to the silica trust to be created in these cases. After sometimes contentious discussions⁴³ among Mr. Blevins, Debtors' counsel, the FCR and his counsel, and counsel for the ACC agreement was reached such that $31.5 million of the $350 million insurance settlement would partially fund the silica trust. A.P. Green agreed to contribute $500,000.00. The plan of reorganization was eventually confirmed by this Bankruptcy Court.⁴⁴ After this settlement, the parties discovered that some insurance policies for A.P. Green Industries or A.P. Green Refractories had asbestos exclusions but did not exclude silica claims and therefore negotiations commenced with those insurers.

42 Although A.P. Green was an installer, not a manufacturer, of refractory products, the allegation was that the application process exposed workers to asbestos dust. Id. at 25.

43 Restivo Decl. at ¶ 20.

44 On October 12, 2012, Debtors and the Silica FCR filed a stipulation providing for an additional $120,000 to be transferred by Debtors to the APG Silica Trust in consideration of the uncertainty surrounding potential Medicare/Medicaid reporting requirements and attendant costs. Doc. No. 10808 at 2 - 3, ¶¶ 2 - 3.

In its opinion the Court of Appeals stated, among other things, that

. . . the integrity of the bankruptcy proceeding is called into question by nonfrivolous allegations of collusion between GIT and the asbestos claimants' counsel in negotiating the establishment of the APG Silica Trust and Silica Injunction. Not to put too fine a point on it, the assertion is that GIT sold out Hartford, Century, and similarly-situated insurers by setting up a system in which they would pay for newly ginned-up silica claims in exchange for the asbestos claimants casting their votes in favor of the GIT Plan. It is a profoundly serious charge and not without record support.⁴⁵

645 F.3d at 214. The Court of Appeals further stated that

Whatever else the normal course of the insurance business may entail, though, it certainly ought not include judicial approval for liability manufactured by and for the benefit of the insured, as is the central concern in this appeal.

Id. at 214, n.32. The Court of Appeals also found that "a more searching review of Hartford's and Century's allegations of collusion between the debtors and counsel for the silica claimants is warranted." Id. at 215. This Court agrees as to the function of judicial approval and, having undertaken the inquiry requested by the Court of Appeals, this Court finds that manufactured liability does not and never did exist in this case.

45 No citation to the record was provided by the Court of Appeals.

In order to execute the "more searching review," we held a hearing on June 15, 2011, at which the parties agreed to attempt to mediate a resolution. Mediation was scheduled for September 15, 2011, and at a status conference held on November 30, 2011, settlements in principle with two of the three insurers were announced. In a status report filed on January 20, 2012, Doc. No 10293, Debtors reported that Century was insisting on what amounted to full-blown discovery and had rejected Debtors' proposal that depositions of "the two 'alleged colluders'" (James Restivo, counsel for Debtors, and Bryan Blevins for the silica claimants)⁴⁶ be conducted in lieu thereof. Nonetheless, at a hearing on February 17, 2012, Debtors agreed to the discovery schedule proposed by the insurers and requested, if discussions between the parties' principals did not result in settlement, that another mediation session be required. The Court entered an order to that effect. Under the discovery order entered on March 23, 2012, Doc. No. 10382, written discovery was to be served on or before February 28, 2012. On April 16, 2012, a motion to quash subpoenas was filed by the non-party law firm of Provost Umphrey and others.

46 Doc. No. 10293 at 2, ¶ 3. The Court of Appeals' decision identified "GIT" and "asbestos claimants' counsel" as the parties to the alleged collusion. 645 F.3d at 214. Later in its opinion the Court of Appeals referred to collusion between "debtors and counsel for the silica claimants." Id. at 215. At the May 14, 2012, hearing counsel for the ACC informed the Court that Century had not served any asbestos claimants' counsel with discovery, only counsel for the ACC. Tr. 5/14/12, Doc. No. 10513, at 48.

A hearing was held on May 14, 2012, see Tr. 5/14/12, Doc. No. 10513, at which this Court repeatedly⁴⁷ asked counsel for Century, the only insurance company that had not, at that time, settled, to identify where, on the record, the allegations of collusion were supported, inasmuch the Court recalled no such evidence and could find no such evidence. Counsel could not provide identification of record evidence in response to the Court's inquiries⁴⁸ at the May 14, 2012, hearing.⁴⁹ Instead, counsel for Century relied on the fact that the Court of Appeals "said so" and that, because the number of silica claims had increased dramatically, there was an inference to be drawn. However, because the insurers had convinced the Court of Appeals that record evidence existed and the Court of Appeals charged this Court with making "a more searching review," we gave Century three days, in addition to the preceding year it had to do so,⁵⁰ to review the record yet again and to specify

47 At the May 14, 2012, hearing, in response to the Court's question directed to him as counsel for Century which apparently was the entity, or one of them, that had made allegations of collusion and/or fraud, counsel said, "In terms of the Third Circuit's opinion, I think we're left with the document as it stands." Tr. 5/14/12, Doc. No. 10513, at 15. The Court again directed him to state "specifically what the allegations are and where there is record support." Id. at 16. Throughout the course of the May 14, 2012, hearing, the Court asked for citations to the record because the Court of Appeals had stated that there was record support. Counsel was unable to provide citations because no such evidence exists.

48 See Tr. 5/14/12, Doc. No. 10513, at 15 - 25.

49 At the May 14, 2012, hearing counsel for Debtors stated that it was not aware of any such evidence either. On October 29, 2012, Debtors' counsel also testified that there is no evidence of collusion. Tr. 10/29/12, Doc. No. 10878, at 31.

50 We note that the Court of Appeals' opinion had been out since May 4, 2011, more than a year before the May 14, 2012, hearing, the parties had been engaged in mediation since September of 2011 on the issue, a discovery schedule had been established in February of 2012, see Tr. 2/17/2012, Doc. No. 10359, and the hearing for the purpose of identifying to the Court the record evidence to support the allegations of collusion had been scheduled for May 14 since April of 2012, see Tr. 4/16/2012, Doc. No. 10437. Notwithstanding all of this, Century failed to identify anything in the record except the fact that silica claims increased.

what the allegations are, the allegations of collusion, and while I'm at it, also of the crime fraud, because I want to know what the allegations about that are. I don't recall anything being raised at the trial about a crime fraud, or fraud, so to the extent that there is a crime fraud exception that you folks are arguing in these briefs, I want to know what the allegations are of either crime or fraud, so that I can assess this information.
So, collusion, crime and fraud, and I want it with specificity where it is in the record, who is involved, when the events occurred, and anything else that's going to assist with respect to figuring out what the allegations are, what the record evidence of support is for them, and how this information you're now seeking back to 1949 may be relevant....
... [T]he second point that the Circuit is addressing is whether or not the silica trust is needed at all. And on that point there was some discovery that took place before, but whether it's been -- whether it was sufficient, I don't know. And I want to hear what the argument is with respect to that necessity because it seems to me that that's what I'm to do under the Circuit opinion....

Tr. 5/14/12, Doc. No. 10513, at 29 - 30.

On the record we summarized our order in this fashion:

So, I have two schedules, just so we're clear. By May 18 the insurers are to tell me what the allegations of collusion are and all its particulars, including the who, what, where and how and when, as well as any allegations of fraud and any allegations of crimes, because in that sense I'm looking at the assertions in the motion for protective order and the responses that there is some crime fraud exception. I don't recall, truthfully, any aspect of any crime being raised, but maybe it was and I've just confused this with some other cases. So, if it is I want to know what, where, how, when, who, et cetera.
... and then three days after that, May 23rd, the additional information from anybody who wants to submit it can come in. Interrogatories to any counsel alleged to have been involved in collusion⁵¹ in any way are to be submitted to those counsel by May 21 with responses by May 31.

Id. at 50. No such information was forthcoming and at a hearing on June 21, 2012, the parties announced that they had settled with all insurers. The renewed plan confirmation hearing was held on October 29, 2012, at which time Mr. Restivo testified as detailed above. His testimony was not challenged and no one accepted the Court's invitation to cross-examine him.

51 Specifically, an interrogatory to law firms alleged to have colluded was authorized to the extent it asked whether a "discussion, or a communication of some sort" occurred. Id. at 39. If the answer was in the negative, Century would be required to provide a basis for pursuing the inquiry.
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In sum, regarding the silica trust, the Court has re-examined the record, solicited citations to the record, conducted additional pre-trial and trial proceedings, examined in detail the process that led to the silica trust, the trust funding, the estimation of claims (valid and invalid) likely to be submitted to the trust, the trust claims processing mechanisms, the trust payment and distribution procedures, the trust's requirements for medical and exposure evidence for alleged injury, the need for the trust to insure the reorganized Debtors' ability to continue in business without the need for further reorganization or liquidation procedures, and every other aspect of confirmation.

On the entirety of the record, the plan proponents have met their burden and established that confirmation of the Plan, creation of the asbestos and silica trusts, issuance of the §524(g) injunction and the injunction regarding silica claims and demands, are in the best interests of the estate and its creditors, are proper under the Bankruptcy Code, were proposed in good faith and the result of arm's length negotiations. The overwhelming support of creditors and the settlements with, inter alia, the formerly objecting insurers, stands in sharp contrast to the concerns expressed by the Court of Appeals, none of which are supported by the evidence.

VIII. CONCLUSION

For the foregoing reasons, the GIT Plan is confirmed. An appropriate order will be entered. The Court will recommend that the District Court affirm confirmation of the Plan in its entirety and the issuance of the §524(g) and §105 injunctions. A proposed order for the District Court to consider is attached as Exhibit A.

_______________

Judith K. Fitzgeral

United States Bankruptcy Judge

"EXHIBIT A"

IN RE: Global Industrial Technologies, Inc., et al. Debtors

Civ. No.

Related to Bankruptcy No. 02-21626

Jointly Administered

Chapter 11

Doc. Nos. 10704, 10842

ORDER AFFIRMING CONFIRMATION OF PLAN OF REORGANIZATION

AND ISSUING INJUNCTION UNDER 11 U.S.C. §524(g) AND 11 U.S.C. §105

AND NOW, this day of , , it is ORDERED, ADJUDGED and DECREED that the confirmation of the plan of reorganization in the above-captioned case is AFFIRMED.

It is FURTHER ORDERED that the injunction authorized by 11 U.S.C. §524(g) and provided in the plan shall issue with respect to Debtors' asbestos liabilities.

It is FURTHER ORDERED that the injunction under 11 U.S.C. §105 provided in the plan shall issue with respect to Debtors' silica liabilities.

_______________

United States District Judge
IN RE: Global Industrial Technologies, Inc., et al. Debtors

Bankruptcy No. 02-21626-JKF

Jointly Administered

Chapter 11

Related to Doc. No. 10704, 10842

ORDER CONFIRMING PLAN AND RECOMMENDING ISSUANCE OF

§524(g) and §105 INJUNCTION

AND NOW, this 13th day of February, 2013, it is ORDERED that the Plan of Reorganization is confirmed and it is recommended that the United Stats District Court for the Western District of Pennsylvania affirm confirmation and the issuance of the §524(g) and §105 injunctions.

_______________

Judith K. Fitzgerald

United States Bankruptcy Judge