Judge backs Babcock & Wilcox plan to reorganize finances | VailDaily.com

Judge backs Babcock & Wilcox plan to reorganize finances

SAN FRANCISCO – A federal judge has backed a revised reorganization plan for McDermott International Inc.’s subsidiary Babcock & Wilcox Co., a key step toward ending the unit’s nearly six years of bankruptcy-law protection.Babcock & Wilcox, which makes industrial boilers and power generation systems, filed for Chapter 11 bankruptcy-law protection from its creditors in 2000 because of asbestos-related lawsuits.New Orleans-based energy-services giant McDermott said Thursday that following a full review, Judge Jerry Brown at the U.S. Bankruptcy Court of the Eastern District of Louisiana recommended on Wednesday that the plan go forward.The plan now includes a $7.5 million settlement with Citgo Petroleum Corp., PDV Midwest Refining LLC and other insurers that had objected to an earlier reorganization proposal.It also requires that plaintiffs in the lawsuit agree to limit Babcock & Wilcox’s maximum uninsured exposure to $50 million and drop further claims against its parent, McDermott.With a Feb. 22 deadline, the plan now goes to Judge Sarah Vance at the U.S. District Court for the Eastern District of Louisiana, who will review Judge Brown’s findings and confirm or reject the plan, which also needs to secure exit financing and approval from McDermott’s shareholders.Vail, Colorado

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