From AutoBeat Daily via MEMA Industry News

A federal bankruptcy judge says she may overrule remaining objections and approve a Federal-Mogul Corp. reorganization plan, thus allowing the supplier a chance to emerge from Chapter 11 by year-end, according to Dow Jones Newswires.

Federal-Mogul is racing to put its plan into effect by Dec. 31 when its $3.5 billion exit financing expires. Otherwise, the company would need to renegotiate the loans in a tight credit market.

Federal-Mogul’s reorganization has been repeatedly complicated by efforts to resolve asbestos claims at several companies it had acquired, which is what drove the company into bankruptcy six years ago.

But the judge says the company’s latest plan, which would shift asbestos liabilities off Federal-Mogul’s books and into a trust, should work, the news service says. She plans to issue an official ruling later but is inclined to override the remaining opposition from insurers and another company involved in related asbestos claims.

The judge has urged Federal-Mogul to resolve those objections before its plan goes to federal district court -- the next and final step in the bankruptcy process.