Plaintiffs File Lawsuit to Stop Distributions from Combustion Engineering Bankruptcy

WILMINGTON, Del. - Counsel for claimants suffering from the most serious asbestos-related conditions have filed a lawsuit in federal bankruptcy court, seeking an injunction that would stop payments issued from a settlement trust negotiated prior to Combustion Engineering's recent pre-packaged Chapter 11 filing. In re: Combustion Engineering, Inc., No. 03-10495 (D. Del., Bankr.).

The complaint, filed Feb. 27 in U.S. Bankruptcy Court in Delaware, alleges that millions of dollars that would have otherwise been earmarked for payment of pending and future asbestos claims under the reorganization plan has already been inequitably distributed to pre-petition claimants, and with little administrative scrutiny.