Former Champion Enterprises eyes settlement of storm-related claims

By Lisa Kerner

Charlotte, N.C., Jan. 31 - CEI Liquidation Estates asked the court to approve a stipulation of settlement agreement regarding the FEMA Trailer Formaldehyde Product Liability Litigation, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The litigation stems from manufactured homes provided to citizens affected by the 2005 Hurricanes Katrina and Rita by the Federal Emergency Management Agency. Some citizens claimed they were exposed to hazardous levels of formaldehyde while residing in the manufactured homes and their lawsuits were consolidated into one multidistrict litigation action now pending in the U.S. District Court for the Eastern District of Louisiana.

The settlement provides payment of $2.625 million by various companies providing manufacturing homes, not including CEI, into a settlement fund.

Under the stipulation, there will be no payment from or by the debtors or the estate into the fund, except that the debtors' insurer, in excess of the $1.2 million self-insured retention, will be contributing $50,000 to the settlement fund, the filing said.

CEI is asking the court to also order that the approximately 2,625 proofs of claim relating to the FEMA Trailer litigation filed against the debtors be withdrawn.

A hearing is set for Feb. 17.

CEI was formerly Champion Enterprises, Inc., a Troy, Mich.-based producer of manufactured and modular homes as well as modular buildings for government and commercial applications. The company filed for bankruptcy on Nov. 15, 2009. The Chapter 11 case number is 09-14019.

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