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Rapid-American Files Bankruptcy Citing Asbestos Liability

March 8 (Bloomberg) -- Rapid-American Corp. filed for bankruptcy protection in New York to deal with debt related to asbestos personal-injury claims.

Rapid-American, based in New York and formerly a holding company for McCrory variety stores, “was never engaged in an asbestos business” and inherited about 275,000 asbestos claims through a series of acquisitions, according to an account in court papers by company Vice President Paul Weiner.

“Recently, Rapid has experienced an increase in the number of mesothelioma claims being filed against it and an increase in the dollar amount sought to settle claims,” Weiner said.

Philip Carey Manufacturing Co., established in 1888, made and sold building products, some of which contained asbestos. Through a series of mergers, Rapid incurred successor liability for claims arising from exposure to asbestos-related products, according to court papers.

“Although total claims filed have declined in recent years, mesothelioma claims, which generally result in higher settlement values, now represent approximately 34 percent of newly filed claims against Rapid,” Weiner said.

The Riklis Family Corp. owns 100 percent of the stock of Rapid-American Corp., court papers show.

The company listed assets of $86.9 million and didn’t immediately specify indebtedness.

The case is In Re Rapid-American Corp., 13-10687, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net; Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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