Quoted from http://www.bizjournals.com/charlotte/stories/2010/06/07/daily5.html
Monday, June 7, 2010, 11:09am EDTEnPro unit files Chapter 11
Charlotte Business Journal – by John Downey and Roberta Fuchs Staff Writers
Saying it needs to protect itself from unjustified liability claims, EnPro Industries Inc. has placed a subsidiary under Chapter 11 bankruptcy protection to negotiate all asbestos claims.
Chief Executive Steve Macadam emphasized in a conference call Monday morning that both EnPro and its subsidiary, Garlock Sealing Technologies, will continue to operate as usual during the bankruptcy case. He estimated it could take two to seven years to exit bankruptcy, depending on whether the company can negotiate a settlement or has to litigate the case.
Garlock made products that used asbestos. It has been involved in many lawsuits involving death and injury claims against its subsidiaries for problems plaintiffs claimed arose from the use of those products. Garlock filed a petition in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte to establish a trust that would settle current and future claims.
The company has not estimated how large that trust might be, and it expects lawyers for plaintiffs to object to the proposal. And it says it is prepared for legal actions by plaintiffs that might try to sue EnPro directly while Garlock is protected in the bankruptcy court.
EnPro has never had to pay any asbestos awards to date, except through its Garlock subsidiary.
The filing, made Saturday, has the immediate effect of putting a halt to all current asbestos lawsuits against Garlock. Those claims will be handled by the bankruptcy court.
It also puts an immediate halt to payments Garlock makes for asbestos. Last year, the company paid $135 million in settlements and legal fees.
