Maremont’s Asbestos Trust in Bankruptcy Challenged by Government

A $50 million trust fund Maremont Corp. proposed as part of its bankruptcy reorganization to handle asbestos personal injury liability has the potential for fraud, according to a government watchdog that is challenging the plan.

The U.S. Trustee is scheduled to present its objections at a March 18 hearing in the U.S. Bankruptcy Court for the District of Delaware. The Trustee objected March 4 to the autoparts maker’s Chapter 11 plan because it lacked transparency and accountability. The plan wasn’t proposed in good faith, the U.S. Trustee said.

Maremont Corp.'s plan, which sets up an asbestos personal injury trust to ...