Federal-Mogul, creditors reach agreement on plan of reorganization

SOUTHFIELD, Mich. (Feb. 3)—Federal-Mogul Corp. and its major U.S. creditors have reached an agreement on a joint consensual plant of reorganization the company will submit to the U.S. Bankruptcy Court by early March. Under the proposed plan, billions of dollars worth of debt and asbestos claims will convert to equity in the reorganized company. If the plan receives court approval, Federal-Mogul's creditors will get 49.9 percent of the new common stock and 50.1 percent of the stock will go to a trust established to pay current and future asbestos claims. Federal-Mogul said it expects to emerge from Chapter 11 later this year.