June 7 (Reuters) - Diesel and dual-fuel engine maker EnPro Industries Inc (NPO.N) said its Garlock Sealing Technologies LLC subsidiary filed for Chapter 11 bankruptcy protection in a North Carolina court to resolve asbestos-related personal injury claims.
All pending litigations will be stayed as Garlock seeks to develop and implement a court-approved plan to permanently resolve all asbestos-related claims, it said in a statement on Saturday.
“Garlock plans to negotiate with representatives of asbestos claimants to establish a trust to pay all valid claims. Absent a negotiated resolution, Garlock intends to ask the court to determine the amount necessary to fund the trust,” the company said.
Garlock said that so far, it has processed more than 900,000 asbestos claims to conclusion and, together with its insurers, has paid over $1.4 billion in settlements and judgments and more than $400 million in fees and expenses.
“The filing covers only Garlock operations in Palmyra, New York and Houston, Texas,” the company said.
“Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary.”
However, the filing includes the Garrison Litigation Management Group Ltd, which manages Garlock’s asbestos claims and relationships with its insurers, and The Anchor Packing Co, which ceased operations in the mid-1990s.
In court papers, Garlock listed assets in the $500 million to $1 billion range and debt in the $100 million to $500 million range.
The company has obtained $10 million in debtor-in-possession (DIP) financing to continue operations while in bankruptcy.
In a separate statement, EnPro said Garlock contributed about $149 million of third party sales and $20 million of segment operating income to its results in 2009.
Garlock, which was founded in 1887 in Palmyra, New York, produces and sells high performance fluid-sealing products, including gaskets and compression packing used in internal piping and valve assemblies in numerous industries. It employs about 600 people.
Earlier this month, two units of RPM International Inc (RPM.N) also filed for bankruptcy to resolve asbestos-related lawsuits.
Asbestos, once widely used in manufacturing, has been banned by the U.S. government after it was proven to cause cancer, often in people who were exposed by breathing in asbestos particles.
The case is In re: Garlock Sealing Technologies LLC, U.S. Bankruptcy Court, Western District of North Carolina (Charlotte), No. 10-31607. (Reporting by Santosh Nadgir in Bangalore; Editing by Gopakumar Warrier)