BMI Oldco: Talc Trust Plan in Abated Chapter 11

BMI Oldco Inc., formerly Barretts Minerals Inc., and its affiliate Barretts Ventures Texas LLC filed chapter 11 petitions on October 2, 2023, in the Southern District of Texas. The cases are a product of talc-related personal injury exposure inherited from a decades-long mining operation, filed by a subsidiary of Minerals Technologies Inc. (NYSE: MTX). The debtors face more than 880 pending talc-related personal injury claims alleging that asbestos contamination in the company's talc products caused mesothelioma and other asbestos-related diseases. More than two years after the petition date, the cases remain abated while the bankruptcy court resolves a threshold scientific question: whether BMI's talc contained asbestos in a form sufficient to cause mesothelioma or other asbestos-related disease. The proposed plan is built around a section 524(g) channeling injunction and trust, and its confirmability depends on the outcome of that determination.

The debtors entered chapter 11 with a third-party DIP facility and an active sale process, sold their operating assets at auction in March 2024 for $32 million, replaced the original DIP lender with parent-funded postpetition financing, and filed a joint plan of reorganization in April 2025. Judge Marvin Isgur then abated the case in May 2025, tying all forward progress to the unresolved asbestos question. As of early 2026, the debtors reported limited cash on hand and an ongoing DIP default dispute with the affiliated lender, while the abatement framework remained in place.

Debtor(s)	BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) and Barretts Ventures Texas LLC
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	23-90794
Petition Date	October 2, 2023
Judge	Hon. Marvin Isgur

JMB Capital DIP Facility and First-Day Filings

BMI Oldco filed with approximately $790,000 of cash on hand and sought immediate postpetition financing to fund operations, preserve vendor relationships, pay employees, and cover chapter 11 administrative costs. The first-day declaration, filed by William Murphy, framed the filing as driven by talc-related personal injury liabilities and insufficient operational liquidity to meet obligations outside of chapter 11.

The original DIP motion sought a $30 million facility from JMB Capital Partners Lending, LLC, split between $15 million available on an interim basis and $15 million after final approval. The facility carried a 14% cash-pay interest rate with a 2% default-rate step-up. Maturity was keyed to the earliest of July 1, 2024, a 363 sale, plan effectiveness, acceleration after default, dismissal or conversion, or failure to obtain a final order within the stated period.

The DIP package required weekly budget reporting on a rolling four-week basis and treated a net operating variance above 20% as an event of default. The DIP liens were subordinated to a carve-out, and the facility contemplated milestones tied to approval of a stalking-horse purchase agreement or a sale order paying the DIP in full.

Key professionals. Latham & Watkins LLP served as lead debtor counsel. The debtors retained Jefferies LLC as investment banker, M3 Advisory Partners, LP as financial advisor, and DJG Services, LLC with David J. Gordon appointed as chief restructuring officer. The official committee of unsecured creditors retained Province, LLC as financial advisor and Caplin & Drysdale, Chartered as special counsel. Stretto, Inc. was authorized as claims, noticing, and solicitation agent.

Venue challenge. Shortly after the petition date, the future claimants' representative and other parties challenged the Southern District of Texas as the appropriate venue for the case, arguing that the debtors' principal mining operations were in Montana and that BMI lacked sufficient ties to the Houston division. Judge Isgur requested additional briefing before ruling on venue and ultimately retained the case in Texas.

Mine Sale to Elevation NewCo

The debtors conducted a marketing process that began before the petition date and continued through a court-supervised sale timeline. The sale timeline was extended multiple times to allow diligence and bid development, and the process produced a March 8, 2024 auction.

Elevation NewCo, LLC, an acquisition vehicle owned by Riverspan Partners Fund I LP, was selected as the successful bidder at $32 million in cash. IMI Fabi Montana, LLC served as backup bidder. CRO David J. Gordon's sale declaration stated that the auction increased cash consideration by $7 million over the opening qualified bid. The declaration also noted that the sale would avoid roughly $2 million of severance costs and roughly $10 million of reclamation costs that would have been incurred if the mine became non-operational.

The buyer intended to continue mine operations, and the transaction was expected to preserve all or a substantial majority of the debtors' approximately 68 employees. The court entered the sale order on March 25, 2024, authorizing the asset sale to Elevation NewCo free and clear, with interests attaching to proceeds as provided in the order. Talc personal injury claims, affiliate contributions, and estate causes of action remained for resolution through continued chapter 11 administration after the sale closed.

In a related ruling during the sale period, the court denied a motion by the debtors to extend the automatic stay to shield non-debtor parent entities from pending talc litigation, finding that the bankruptcy protections did not extend to Minerals Technologies and other non-debtor affiliates in that context. The court also denied Pfizer Inc.'s request to access mediation documents in the case, ruling that allowing outside access would inhibit the candor of mediation participants.

MTI-Funded Postpetition Financing and $215 Million Reserve

After the sale closed, the debtors transitioned from third-party DIP financing to parent-funded postpetition credit. On May 21, 2024, the court entered an order authorizing up to $30 million of postpetition financing from Minerals Technologies Investments LLC, a wholly owned subsidiary of MTI. The facility was structured as unsecured financing under section 364(b), bearing 11% interest with quarterly capitalization. Proceeds were limited to uses permitted by the approved budget, the DIP credit agreement, and the court order, including court-approved professional compensation and reimbursement for professionals retained by the debtors, the committee, and the future claimants' representative.

In its second quarter 2024 earnings release, MTI recorded a $30 million provision for credit losses related to the committed line of credit extended to BMI Oldco, reflecting the risk that the postpetition loans might not be fully recoverable.

In April 2025, MTI announced it had established a $215 million reserve for estimated costs to fund a trust to resolve all current and future talc-related claims and to fund BMI Oldco's chapter 11 case and related litigation costs. The reserve included an additional $30 million of debtor-in-possession financing approved by the court on April 14, 2025. Alongside the reserve announcement, MTI disclosed that preliminary first quarter 2025 results fell slightly short of guidance and initiated a $10 million annualized cost savings program to improve operational efficiency. Douglas T. Dietrich, MTI's chairman and chief executive officer, stated that the company believed the reserve was appropriate to cover the anticipated financial impact and that it continued to believe the lawsuits against BMI Oldco were meritless. No other subsidiaries or business units of MTI are included in the chapter 11 filing. MTI reported global sales of $2.1 billion in 2024 and expected first quarter 2025 sales of $492 million.

The $215 million reserve drove a full-year 2025 net loss per share of $0.59 for MTI, though the parent company reported positive operating income and cash flow for the fourth quarter and continued to increase its quarterly dividend. MTI's 2025 10-K filing disclosed $961.7 million in total debt alongside the ongoing chapter 11 obligations, while the parent's core business segments continued to generate record-level quarterly earnings excluding the talc reserve charge.

Section 524(g) Trust Plan and Dual-Pathway Architecture

The debtors filed a joint chapter 11 plan on April 2, 2025. The plan is built around resolving talc personal injury claims through a trust and a channeling injunction, with the confirmation architecture split into two distinct pathways depending on whether the section 524(g) voting threshold is achieved.

524(g) pathway. If the required voting threshold is met, the plan would establish a trust with a channeling injunction under section 524(g) of the Bankruptcy Code, directing all current and future talc-related claims to the trust for resolution. The trust documentation, confirmation architecture, and the definition of the confirmation order are tailored to this pathway.

Non-524(g) pathway. If the threshold is not met, the plan contemplates a non-524(g) trust that would still channel claims but without the permanent injunction protections available under section 524(g). Under this pathway, future claims treatment, the injunction's scope as to non-debtors, and trust distribution procedures differ from the 524(g) pathway.

The plan also includes debtor releases, discharge-related provisions, and affiliate-related released claims tied to the talc trust structure.

The plan filing followed months of mediation. Court-appointed mediator Kenneth Feinberg reported in March 2025 that negotiations had reached an impasse, attributing the breakdown to a lack of engagement from the unsecured creditors' committee. Separately, the debtors argued in a March 2025 filing that talc personal injury claims are property of the chapter 11 estate, a legal position that would affect the scope of claims the trust is designed to resolve. The debtors have maintained throughout the case that their talc products did not cause asbestos-related disease and that the plan structure is a vehicle to resolve the claims efficiently rather than a concession of liability.

UCC Dismissal Motion and Abatement Order

The official committee of unsecured creditors moved to dismiss the chapter 11 cases in June 2024, arguing that the debtors had no viable path to a confirmable plan that would include section 524(g) relief.

On May 14, 2025, Judge Isgur entered an order abating the case and all related adversary proceedings pending resolution of a gating factual question: whether BMI's talc contained a sufficient quantity and form of asbestos to cause mesothelioma or other asbestos-related disease. The abatement ruling explained that if BMI's talc did not contain asbestos, the proposed section 524(g) plan would be unconfirmable. If asbestos was present, the debtors could pursue a confirmable plan so long as present and future claimants were treated fairly.

In findings entered May 20, 2025, the court denied the UCC's motion to dismiss, abated the exclusivity dispute, and tied plan confirmability and trust value to the unresolved asbestos determination. The findings noted MTI's announced $215 million reserve for the proposed trust and related asbestos expenses, while cautioning that the court was not deciding whether that amount was sufficient. Under the court's order, the plan, trust design, future-claimant treatment, and dismissal risk all depend on the asbestos determination.

The abatement framework included a report and recommendation that the district court, rather than the bankruptcy court, determine whether BMI's talc contained asbestos. As of September 2025, the parties were actively debating the scope of the district court's role in making that threshold determination, with talc claimants and the debtors taking opposing positions on how the referral should be structured.

Special Committee and Affiliate Claims Authority

Following April 2025 hearings, the debtors reported a governance protocol that expanded the special committee from a single member to a three-member body. Retired Judge Robert Drain and Roger Frankel were appointed as independent directors and co-chairs effective April 28, 2025.

The notice of status stated that the special committee holds sole and exclusive authority over designated estate claims involving MTI, Specialty Minerals Inc., and other non-debtor affiliates. The CRO reports exclusively to the special committee on those matters. The governance protocol separately authorized the debtors to pay the special committee's counsel, consultants, and agents, subject to statement review and final court approval. The debtors committed to monthly status reporting, with the next report to identify retained advisors and an investigation schedule.

The special committee retained Togut, Segal & Segal LLP as its counsel, tasked with investigating and prosecuting estate claims against MTI and other non-debtor affiliates. Roger Frankel, one of the two newly appointed independent directors, has an extensive background as a future claims representative in mass tort chapter 11 cases, having served in that role in the W.R. Grace, Mallinckrodt, and Endo International restructurings. The appointment of independent directors with substantial asbestos-bankruptcy and mass-tort experience reflected the court's April 2025 direction that the debtors demonstrate greater independence from their parent company in managing the chapter 11 case.

Cash Position and DIP Default Dispute

As of early March 2026, the case remained abated. A status report filed March 5, 2026 disclosed that the debtors had $2.5 million of cash on hand as of February 27, 2026, and $14.5 million of remaining commitment under the DIP credit agreement.

Specialty Minerals, the DIP lender, funded another $2.5 million on March 2, 2026, while asserting existing defaults under the credit agreement and proposing an amendment that would waive defaults and extend maturity. The tension between the affiliated lender's continued funding and its simultaneous default assertions reflects the broader dynamic of a parent-funded chapter 11 in which the debtor's sole remaining purpose is to resolve tort liabilities against the parent's subsidiary.

Meanwhile, related talc litigation continued outside the bankruptcy court. In mid-2025, personal injury plaintiffs in the Maricich v. Chattem, Inc. action filed motions to remand talc claims against Minerals Technologies, Specialty Minerals, and other co-defendants. That case was initially removed to federal court in the Southern District of Texas before being transferred to the Northern District of California and ultimately remanded to state court, illustrating the ongoing jurisdictional complexity surrounding the BMI-related talc claims that are not stayed by the chapter 11 proceedings.

Frequently Asked Questions

What is the BMI Oldco chapter 11 case about?

BMI Oldco Inc., formerly Barretts Minerals Inc., filed chapter 11 as a subsidiary of Minerals Technologies Inc. to address talc-related personal injury liabilities. The debtors sold their operating mining assets for $32 million in March 2024 and filed a plan of reorganization in April 2025 built around a trust to resolve current and future talc claims. The case has been abated since May 2025 while the court resolves whether BMI's talc contained asbestos.

Who is the judge in the BMI Oldco bankruptcy?

Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas is presiding over the case.

Who is the claims agent for BMI Oldco?

Stretto, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

What happened to BMI Oldco's mining operations?

The debtors sold their mining operations to Elevation NewCo, LLC, an acquisition vehicle owned by Riverspan Partners Fund I LP, for $32 million at an auction held on March 8, 2024. The buyer intended to continue mine operations and preserve the debtors' approximately 68 employees.

How much has Minerals Technologies committed to the BMI Oldco case?

MTI established a $215 million reserve in April 2025 to cover estimated costs for the proposed talc claims trust and related chapter 11 expenses. The parent company has also provided up to $60 million in postpetition financing across two court-approved facilities. Despite the reserve driving a full-year 2025 net loss for MTI, the parent company reported $2.1 billion in 2024 global sales, continued to post record quarterly operating income in its core segments, and increased its quarterly dividend for a third consecutive year.

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