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CHARLOTTE, N.C. - (Mealey's) Garlock Sealing Technologies on June 5 filed a voluntary petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of North Carolina to establish a trust to resolve all current and future asbestos claims against it (In re Garlock Sealing Technologies, No. 10-31607, W.D. N.C. Bkcy.).
Garlock produces and sells fluid-sealing products, including gaskets and compression packing. The company is a wholly owned subsidiary of Coltec Industries Inc., which in turn is a wholly owned subsidiary of EnPro Industries Inc. The filing does not include EnPro or any other EnPro operating subsidiary.
Some of Garlock's former gasket and packing products contained asbestos, and a result, since the mid-1970s, the company has faced hundreds of thousands of claims from individuals alleging that exposure to Garlock's products contributed to asbestos-related personal injuries.
Along with Garlock's filing, Garrison Litigation Management Group and The Anchor Packing Co. also filed for Chapter 11 bankruptcy. Anchor formerly was a wholly owned subsidiary of Garlock. Garrison manages the defense and resolution of the asbestos claims and has been assigned rights to obtain reimbursement of Garlock's asbestos-related defense costs and liabilities under insurance policies that provide coverage for asbestos claims against Garlock. The companies moved on June 5 to jointly administer the cases.
As of December 2009, Garlock and Anchor have received more than 850,000 asbestos claims and paid approximately $1.37 billion in indemnity payments and $387 million in legal costs to resolve the claims.
In its filings, Garlock said that it thought it would be able to survive the wave of asbestos-related bankruptcy cases filed but that it has been forced to commence bankruptcy because it has been overwhelmed by increases in the value of asbestos claims caused by the wave, the transfer of liability from the top bankrupt companies to Garlock pursuant to joint and several liability and its inability to access evidence of asbestos claimants' claims against and recoveries from the trusts established by other bankruptcies.
Garlock listed more than 100,000 creditors, estimated assets of $100 million to $500 million and estimated liabilities of $100 million to $500 million.
Garlock will continue to operate as a debtor in possession and will be seeking to establish a trust pursuant to Section 524(g) of the U.S. Bankruptcy Code.
[Editor's Note: Full coverage will be in the June issue of Mealey's Asbestos Bankruptcy Report. In the meantime, the petition for bankruptcy and motion for joint administration are available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Petition. Document #48-100609-033X. Motion for joint administration. Document #48-100609-034M. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
Download the petition now:
Mealeysonline.com - Document #48-100609-033X
Download the motion for joint administration now:
Mealeysonline.com - Document #48-100609-034M
For more information, e-mail editor Cheryl Keely at email@example.com.