| July 28
July 28 Rust-Oleum paint maker RPM International
Inc on Monday announced a $797.5 million deal to resolve
asbestos claims against its Bondex International Inc unit, which
filed for protection from creditors in 2010 after mounting
personal injury lawsuits.
If the agreement receives court approval, it would end a
contentious Chapter 11 bankruptcy in which a judge ruled Bondex
should pay about $1.2 billion to resolve asbestos claims.
Bondex, which had said it should only pay $135 million, was
appealing the ruling.
RPM shares were up 2.8 percent at $45.64 in afternoon New
York Stock Exchange trading.
Under the agreement, RPM will provide an initial $450
million in cash to a trust once the U.S. Bankruptcy Court and
the U.S. District Court in Delaware approve a reorganization
plan for Bondex.
RPM, which also makes DAP caulk, would contribute the
remaining $347.5 million in cash, stock or a combination of the
two within four years after the trust has been established.
All current and future asbestos claims against Bondex and
related entities would then be channeled to the trust, according
to a Monday statement by Medina, Ohio-based RPM.
Bondex and another RPM unit, Specialty Products Holding Co,
filed for bankruptcy in May 2010 in the wake of lawsuits over
its asbestos-containing products such as joint compound, which
is used in filling drywall gaps.
Bondex and personal injury lawyers clashed over how much
money was needed to fund a trust to resolve the asbestos claims.
The lawyers said $1.255 billion was an appropriate amount
based on what Bondex paid in past settlements.
Bondex said its liability could not be determined by looking
to past settlements because those deals included payments to rid
itself of nuisance lawsuits. Without those nuisance payments,
the company said, its asbestos liability would have been about
Former U.S. Bankruptcy Court Judge Judith Fitzgerald
rejected that argument. She retired shortly after issuing the
opinion in May 2013, and Judge Peter Walsh is now overseeing the
Monday's agreement, if the courts approve it, would head off
a federal appeals court's potentially binding ruling on Bondex's
approach to estimating liability.
Asbestos is a naturally occurring mineral that can cause
deadly cancers, including mesothelioma. Scores of companies have
filed for bankruptcy and collectively paid tens of billions of
dollars to set up trusts to resolve personal injury lawsuits
RPM said it expected the contributions to the trust to be
tax-deductible, and it estimated the after-tax net present value
of its contributions at about $485 million.
The case is Special Products Holding Corp, U.S. Bankruptcy
Court, District of Delaware, No. 10-11780.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Lisa