Rust-Oleum Maker to Pay Into Trust Fund to End Asbestos Suits, Lawyer Says
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RPM International Inc. (RPM), the maker of Rust-Oleum and other specialty paints, will contribute an unspecified amount of money to win protection from future asbestos lawsuits, a lawyer said in court today.
The company “understands” that it must put money into a court-approved trust for asbestos victims in order to win immunity from future lawsuits aimed at its bankrupt subsidiaries, Gregory Gordon, an attorney for the subsidiary told a U.S. judge during a hearing in Wilmington, Delaware.
“We and the parent are going to have a conversation about that in the future,” Gordon said, referring to the units, Specialty Products Holding Corp. and Bondex International Inc.
Specialty Products and Bondex filed for bankruptcy last year without saying how they would fund an asbestos trust. Since then, the judge overseeing the case, Judith K Fitzgerald, has asked Specialty and Bondex whether RPM and its related operating companies would contribute to an asbestos trust.
RPM Chief Financial Officer Robert L. Matejka didn’t immediately return a call or e-mail requesting a comment.
Under U.S. bankruptcy law, companies and their parents can win immunity from future asbestos lawsuits by setting up a trust to cover medical and other costs associated with exposure to asbestos.
Gordon said that before RPM can commit to a specific amount of money to contribute, Specialty and Bondex must negotiate with lawyers for asbestos victims on the size of the trust.
Specialty and Bondex don’t have any operations. Specialty is a holding company that owns eight manufacturers of coatings and specialty chemicals.
Specialty faced about 15,000 asbestos cases related to its Bondex unit. About 10,000 of the cases were active in courts around the U.S. when the company filed for bankruptcy May 31.
Since then, the company has fought for access to data about how much money asbestos victims may have received because they were harmed by non-Bondex products. The data is necessary for Specialty to figure out how much it owes for Bondex’s asbestos- tainted products, which were sold from 1966 to 1977, the company claimed in court papers.
Asbestos particles can lodge deep inside a person’s lungs, causing respiratory illnesses and cancer.
The bankruptcy case is In re Specialty Products Holdings Corp., 10-11780, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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