(Reuters) - EnPro Industries Inc said it has agreed to a $480 million settlement to resolve current and future personal injury claims related to its asbestos-lined gaskets used in pipes, valves and other industrial applications.
The settlement was between EnPro, its now bankrupt unit Garlock Sealing Technologies, Garlock’s direct parent Coltec Industries Inc and court-appointed representative for current and future asbestos claimants.
EnPro said it would set up and fully fund a $480 million trust, estimating that the after-tax value of its contribution would to be $284 million. EnPro has also committed to set aside up to about $17 million to resolve Canadian cases.
EnPro said the trust would assume responsibility for all present and future asbestos claims related to Garlock or Coltec, thereby covering all EnPro businesses ever to have received asbestos claims in the United States.
Garlock filed for bankruptcy in 2010 due to the mounting costs of lawsuits. Bankruptcy-related lawsuits unsealed in late January allege that lawyers, to drive up settlements, hid evidence that their clients were exposed to products made by other companies that were bankrupt at the time.
EnPro said on Friday that the settlement was yet to be approved by the claimants, the bankruptcy court and the U.S. district court.
The company also proposed a plan, which is to be approved by the claimants, to restructure Coltec and shift its assets and units into a new subsidiary that will be responsible for all claims and certain insurance.
The new subsidiary will then file for pre-packaged Chapter 11 bankruptcy petition, which EnPro expects will be administered with Garlock’s Chapter 11 case, in late 2016 or early 2017.
Reporting by Rishika Sadam in Bengaluru; Editing by Savio D'Souza