Palmyra, North Carolina - An asbestos plaintiffs’ attorney has reached a proposed reorganization deal with Garlock Sealing Industries, which would allow the bankrupt company to put aside $357.5 million for future asbestos personal injury claimants. This amount pales in comparison to the $1 billion a separate group of attorneys sought for compensation for current claimants, but it is greater than the $125 million that Judge George Hodges, who oversaw the litigation, ruled was appropriate.
Garlock, a subsidiary of EnPro Industries that manufactured asbestos-containing products, including gaskets, filed for Chapter 11 bankruptcy more than four years ago, after being accused of causing asbestos-related injuries in more than 900,000 claims. Asbestos exposure can result in a variety of respiratory illnesses, such as mesothelioma, a type of cancer that can affect the lining of the lungs, heart and abdominal cavity, that is almost always fatal.
Both Garlock and EnPro expect attorneys for current claimants – those that previously sought $1 billion – to challenge the plan. According to EnPro CEO Steve Macadam, the company and its subsidiary had hoped to reach a reorganization deal with attorneys representing both current and future asbestos personal injury claimants, but that was not the case. As a result, Macadam said the proposal marks the first time that attorneys for current and future claimants are divided over such an agreement.
Macadam also refuted an attorney’s claim that the proposal violates a requirement that necessitates the approval of 75% of claimants; Macadam opined that Judge Hodges’s ruling determined that the majority of cases against Garlock would be made by future, not current, claimants.
The proposal has yet to be approved.