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Garlock Sues Law Firms, Alleging Fraud Over Asbestos Claims

CHARLOTTE, N.C. — (Mealey’s) Chapter 11 debtor Garlock Sealing Technologies LLC filed four adversary complaints Jan. 9 in a North Carolina federal bankruptcy court against several law firms and attorneys, alleging conspiracy, fraud and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) (In re:  Garlock Sealing Technologies, LLC, No. 10-31607, W.D. N.C. Bkcy.). 

Also yesterday, Garlock’s parent, EnPro Industries Inc., announced that the bankruptcy court intends to issue its ruling today estimating the value of current and future mesothelioma claims against Garlock. 

Adversary Complaints 

Garlock and affiliates Garrison Litigation Management Group and The Anchor Packing Co. (collectively, Garlock) filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in 2010 in the U.S. Bankruptcy Court for the Western District of North Carolina.  The debtors estimate that more than 100,000 asbestos personal injury claims were pending against them when they filed their petitions.  The companies continue to operate their businesses as debtors-in-possession. 

Garlock filed only the first page of each complaint, plus summonses, against the following firms, attorneys and clients: 

  • Waters & Kraus LLP, estate of Ronald C. Eddins, Michael L. Armitage, Jeffrey B. Simon, C. Andrew Waters, Peter A. Kraus, Stanley-Iola LLP and Mark H. Iola
  • Belluck & Fox LLP, Joseph W. Belluck and Jordan Fox
  • Shein Law Center Ltd., Benjamin P. Shein and Bethann Schaffzin Kagan
  • Simon Greenstone Panatier Bartlett, Jeffrey B. Simon, David C. Greenstone, estate of Ronald C. Eddins and Jennifer L. Bartlett. 

“The Garlock complaints have been filed under seal because they contain information about asbestos lawsuits filed against Garlock prior to the company’s bankruptcy case that the four law firms contend is confidential and should be protected from public access,” EnPro spokesman Don Washington said. 

According to the complaints’ cover sheets, Garlock and Garrison are suing for RICO claims, common-law fraud and civil conspiracy.  The complaints seek jury trials and demand more than $75,000, exclusive of interest and costs. 

Estimation Decision 

A trial to estimate Garlock’s total liability for current and future asbestos personal injury claims, including mesothelioma claims, was held in July and August 2013.  During the trial, Garlock and the asbestos claimants — represented by the Official Committee of Asbestos Personal Injury Claimants and the future claimants’ representative (FCR) — presented cases based on opposing methodologies used by their experts to estimate Garlock’s liability. 

Garlock said in its trial brief that its total liability for mesothelioma claims is not more than $125 million, while the asbestos personal injury claimants said in a brief filed by the Official Committee that Garlock should pay more than $1.2 billion for mesothelioma claims. 

In a news release, EnPro said that Bankruptcy Judge George R. Hodges informed the company that he will issue his opinion estimating Garlock’s asbestos liability after 4 p.m. today.  EnPro said it will host a conference call Monday “to review the opinion with investors and discuss next steps in the process.”  

Garlock is represented by Garland S. Cassada, Jonathan C. Krisko and Richard C. Worf Jr. of Robinson Bradshaw & Hinson in Charlotte.

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