Jan. 31 (Bloomberg) -- Garlock Sealing Technologies LLC, a gasket maker that sought bankruptcy protection to deal with asbestos claims, won a judge’s permission to add $16 million to its union pension plan.
U.S. Bankruptcy Judge George Hodges in Charlotte, North Carolina, ruled that Garlock officials could add the money to a pension plan covering members of the International Association of Machinists and Aerospace Workers to help the manufacturer negotiate a new contract.
The addition was in “the best interest” of Palmyra, New York-based Garlock, its creditors and its workers, Hodges said in a two-page ruling yesterday.
Garlock, a unit of Charlotte-based EnPro Industries Inc., has produced gaskets, hydraulic components and seals for more than 100 years. Don Washington, an EnPro spokesman, said in a telephone interview today the company was pleased with the approval of the addition, “which fully funds the pension plan.”
The company filed for Chapter 11 protection in June 2010 to deal with 100,000 asbestos claims filed over its products. Some of Garlock’s gaskets contained asbestos, making the company the target of more than 900,000 asbestos claims, according to court papers.
So far, Garlock has paid more than $1.4 billion in settlements and judgments and more than $400 million in legal costs connected to the cases, the company said in a June 2010 filing in its bankruptcy case.
To deal with the remaining 100,000 asbestos cases, Garlock filed the bankruptcy case to have all the claims grouped together for disposition, company officials said in the 2010 filing. The company has filed a Chapter 11 exit plan that promises to pay approved asbestos claims, according to a November court filing.
Garlock’s contract with unionized machinists is set to expire next month and workers are demanding an increase in pension benefits, company officials said in a Jan. 5 court filing.
“The increase in funding in the Garlock Union Pension Plan is a critical component in negotiations,” executives said in the filing.
The contribution also would mean funding levels for the plan, which now stand at 65 percent, would jump to 100 percent, officials said in the Jan. 5 filing. Garlock, which has $100 million in cash and cash equivalents, funded the increase from its own coffers, the officials said.
The case is In Re Garlock Sealing Technologies LLC, 10-31607, U.S. District Court, Western District of North Carolina (Charlotte).
To contact the editor responsible for this story: John Pickering at firstname.lastname@example.org