Honeywell International announced a $1.69 billion transaction that eliminates its financial responsibility for payments to mesothelioma victims. The deal, which involved contributions from both Honeywell and corporate liability acquisition platform Delticus, permanently shifts liabilities for legacy asbestos claims that Honeywell has faced ever since it acquired North American Refractories Company (NARCO) and Bendix Friction Materials.
Mesothelioma Claims Originated from Automotive and Industrial Products
Most of the mesothelioma lawsuits and claims against Honeywell arose from asbestos-containing products manufactured by Bendix and NARCO, years before Honeywell acquired them. Bendix made automotive brake linings containing asbestos, while North American Refractories Company (NARCO) made asbestos refractory materials for high-temperature industries.
Honeywell sold Bendix in 2014 but remained liable for Bendix-related mesothelioma claims. It also established a compensation trust with NARCO to resolve billions of dollars’ worth of asbestos claims stemming from that company’s products. The company recently sued the administrators of that bankruptcy trust over its management of payments to victims. It faced ongoing litigation from workers exposed to asbestos in brake products and heating systems from both companies.
Mesothelioma Victim Compensation Now Managed by Delticus Platform
Under the new structure, mesothelioma claimants and victims with pending cases will now have their claims administered and resolved by Delticus, which assumes full responsibility for all asbestos-related obligations. The transaction was funded using approximately $1.6 billion in cash that Honeywell received from Resideo Technologies as part of a 2018 indemnification agreement connected to Resideo’s spin-off.
The divestiture is estimated to result in a one-time after-tax loss of approximately $115 million for Honeywell, but the company expects that relieving itself of its mesothelioma liabilities will improve its free cash flow by more than $100 million a year over the next few years while still providing financial compensation to those diagnosed with asbestos-related diseases in the future.
If you or someone you love has been diagnosed with mesothelioma or another asbestos-related disease following exposure to products produced by either Bendix or North American Refractories Company, the shift of asbestos liability can be concerning. The Patient Advocates at Mesothelioma.net are here to help. Contact us today for information on where you can turn for help, as well as on other resources available to you.
