On June 18, 2020, two of Trane’s business units filed for Chapter 11 bankruptcy to handle asbestos claims. Specifically, Aldrich Pump LLC and Murray Boiler LLC filed for relief. The companies hope to establish asbestos trust funds to manage the hundreds of asbestos claims they face each year.
Why Is Trane Filing for Bankruptcy?
Trane’s business units are filing for bankruptcy to help manage a large number of asbestos claims. A company spokesperson noted they want to provide eligible claimants with a “streamlined” and “timely” process.
Growing Number of Asbestos Claims Against Trane
Understanding Trane’s Company Structure
- Ingersoll Rand: Main industrial company
- Trane (Trane Technologies PLC): One of many brands under Ingersoll Rand
- Aldrich Pump LLC and Murray Boiler LLC: Business units under Trane
Trane currently handles around 900 asbestos lawsuits a year. Lawsuits claim Trane products contained asbestos.
Victims were exposed to asbestos and later diagnosed with mesothelioma or other asbestos diseases.
The company alleged paying around $100 million each year for legal defense and settlement fees.
Asbestos lawsuits may provide victims with financial help. Asbestos victims file lawsuits against companies responsible for their exposure. They often result in settlements. Claimants typically must have an asbestos-related diagnosis to file. This may include mesothelioma, asbestosis and lung cancer.
Asbestos Exposure in the Workplace at Trane
Trane manufactures pumps, boilers, compressors and other HVAC equipment. Historically, the following HVAC products have contained asbestos:
HVAC Products With Asbestos
- Duct insulation
- Boiler insulation
- Pipe insulation
- Fire curtains
- Heat exchangers
*Asbestos was often present in components of the above products. For example, motor components within the pumps have contained asbestos.
Asbestos added heat, fire and chemical resistance to products. This was ideal for HVAC equipment facing high heat and for applications in industrial settings.
Trane’s business units claim some of their products incorporated asbestos-containing materials (ACMs) provided by third parties. Claimants are seeking compensation after developing mesothelioma from exposure to the ACMs.
According to court documents, Trane has been involved in asbestos litigation since 1980. Some of this documentation claims Trane knew about the dangers of asbestos. Many asbestos companies have been sued for knowingly putting employees and consumers at risk of exposure.
What Does Filing for Bankruptcy Mean for Trane?
Filing for bankruptcy allows Trane to avoid handling numerous asbestos lawsuits. Instead, claims will be handled by a trust fund. A trust fund pays current and future claims.
What Is an Asbestos Trust Fund?
- Asbestos trust funds are formed under Chapter 11 bankruptcy.
- Trust funds require companies to set aside funds to pay out current and future asbestos claims.
- Victims of asbestos exposure can file a trust fund claim for compensation.
- Trust funds have various eligibility requirements, such as an asbestos-related diagnosis.
Claimants would be paid through trust fund payment schedules. Payments are based on a payment percentage, determined on a trust-by-trust basis.
Trust funds would allow Trane’s business units to pay out mesothelioma claims quicker and easier than through lawsuits and settlements.
Trane Bankruptcy Proceedings
Trane bankruptcy proceedings are currently still in progress. First, companies must submit their plan for reorganization. This is then reviewed and approved or denied in bankruptcy court.
Aldrich Pump LLC and Murray Boiler LLC filed for Chapter 11 bankruptcy on June 18, 2020. A North Carolina federal bankruptcy judge was appointed on July 7, 2020. Hearings have continued through the beginning of July.
Due to restrictions from the coronavirus, hearings have been held via teleconference. More information is expected in the coming weeks.