$480 Million Asbestos Bankruptcy Trust Fund Agreed To
It’s been years since gasket manufacturer Garlock Sealing Technologies filed for bankruptcy protection. Since then, there’s been an extended legal battle, but the case has apparently been resolved – the parties involved are reporting that they have reached a settlement that would fund an asbestos bankruptcy trust with $480 million.
Like many other companies associated with asbestos use, Garlock, which is a subsidiary of EnPro, was struggling financially in the face of multiple lawsuits, which claimed negligence in exposing employees and customers to asbestos in their products.
A disagreement emerged between asbestos claimants – who believed that the fund should be established at a value of $1.26 billion — and Garlock — which claimed their liability was only $125 million. As the case evolved over the proper amount of funding, Garlock’s attorneys ended up filing RICO charges against a number of asbestos plaintiff law firms. Those charges will be dropped as part of the settlement agreement.
“This comprehensive, consensual settlement will bring us full, complete, and permanent relief from asbestos litigation and will achieve complete and total peace with the asbestos plaintiffs bar,” president and chief executive officer of EnPro, Steve Macadam, said.
The settlement also means EnPro no longer needs to spend $25 million per year in legal expenses as it has been doing since their bankruptcy proceedings began.
The terms of the agreement establish a trust fund organized to provide payments to both current and future asbestos claimants against Garlock, with EnPro providing $400 million immediately> The company will then provide another $80 million on the one year anniversary of the plan being approved. Another $17 million has been set aside to provide funding for Canadian asbestos claims, both current and future.
Asbestos bankruptcy trust claims are established to provide compensation to those who have been diagnosed with mesothelioma or otherwise impacted by exposure to asbestos. The companies that are responsible for this exposure set up the trusts, which are administered by trustees who determine compensation based on specific established protocols.
The companies were required to establish these trusts as part of their bankruptcy proceedings in order to ensure that those who they harmed were able to receive compensation, and in doing so protect themselves against any further lawsuits.
Written by Terri Oppenheimer
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