DALLAS, Texas--March 23, 1995--Eljer Industries, Inc. href="[ELJ:NYSE]" target=_new>http://www.secapl.com/cgi-bin/edgarlink?ELJ">[ELJ:NYSE]announced
today that its indirect, wholly-owned subsidiary, href="chap11.usbrass.html">United States
Brass Corporation filed a Plan of Reorganization and proposed Disclosure
Statement in its Chapter 11 bankruptcy case. Eljer Manufacturing, Inc., the
parent corporation of U.S. Brass, and Eljer Industries, Inc., the parent
corporation of Eljer Manufacturing, are also proponents of the Plan. U.S.
Brass filed for Chapter 11 bankruptcy protection on May 23, 1994 in the United
States Bankruptcy Court for the Eastern District of Texas. The purpose of the
Chapter 11 filing was to resolve systematically issues resulting from
polybutylene plumbing systems manufactured by U.S. Brass and related
The proposed Plan provides for the creation of a trust from which claims
relating to U.S. Brass polybutylene plumbing systems will be satisfied. The
trust will be assigned rights under certain historical insurance policies
maintained for the benefit of U.S. Brass, Eljer Manufacturing and Eljer
Industries. The proceeds of other litigation are also expected to help fund
the trust. If confirmed by the Bankruptcy Court, the Plan bars actions
relating to polybutylene plumbing systems against U.S. Brass, Eljer
Manufacturing or Eljer Industries.
The Plan also incorporates a separate proposed settlement with Shell
Chemical Company, which manufactures the resin from which U.S. Brass
manufactures polybutylene pipe. Pursuant to the proposed settlement, Shell
will contribute up to $200 million to the trust. If approved, the proposed
settlement would also bar action against Shell.
The Plan provides for payment in full of trade and all other general
uninsured claims over time with interest and provides for the resolution of
plumbing claims through the trust.
The proposed Plan provides that Eljer Manufacturing will continue to own
U.S. Brass or will have an opportunity to re-acquire it. As Eljer Industries
previously reported, the book value of U.S. Brass was reduced to zero in the
fourth quarter of 1994.
The Disclosure Statement is subject to approval by the Bankruptcy Court and
the proposed Plan is subject to a vote of U.S. Brass creditors. No hearing
on the proposed Disclosure Statement has been set. If the Disclosure
Statement is approved by the Bankruptcy Court, it will be sent, along with the
Plan, to U.S. Brass creditors who will then be entitled to vote. It is not
known when the proposed Plan will be submitted to creditors for voting.
Scott G. Arbuckle, Chairman of U.S. Brass and President and Chief
Executive Officer of Eljer Industries, commented: "The ability of U.S. Brass
to file a Plan of Reorganization represents significant progress in our
diligent effort to resolve the polybutylene-related issues that have hampered
our company for several years now. We remain steadfastly committed to their
Eljer Industries, Inc. is a leading manufacturer and marketer of high
quality building products, including plumbing, heating and ventilating
products, for the residential and commercial construction, remodeling and
repair, and do-it-yourself markets.
CONTACT: ELJER INDUSTRIES, INC.,
UNITED STATES BRASS CORPORATION,
George Hanthorn, 214/407-2600 ,
Lynn Morgen/June Filingeri, 212/850-5600,
Ken Pieper, 214/663-9390 .