Rust-Oleum Maker to Pay $797.5 Million to Asbestos TrustPhil Milford and Steven Church
RPM International Inc., the maker of Rust-Oleum and other specialty paints, agreed to pay $797.5 million to settle asbestos-related claims faced by its bankrupt Bondex and Specialty Products units, less than the $1.17 billion a judge said they may have owed.
The money will be paid over four years into a trust to benefit personal-injury claimants, the Medina, Ohio-based holding company said today in a statement. Related documents weren’t immediately posted with U.S. Bankruptcy Court in Wilmington, Delaware.
Companies used asbestos in insulation and fireproofing materials. It can reach deep into a victim’s lungs and may cause cancer and other diseases. Bankrupt companies are able to win immunity from future asbestos lawsuits by setting up trusts to cover asbestos-related costs.
The settlement would be part of a reorganization plan for Bondex and Specialty Products. The settlement and the plan must be approved by the federal judge overseeing the bankruptcy.
The units sought court protection from creditors in May 2010, estimating asbestos liabilities of less than $400 million at the time from more than 10,000 lawsuits. Three years later, U.S. Bankruptcy Judge Judith K. Fitzgerald said claims from current and future victims of asbestos poisoning may reach $1.17 billion.
“We have been able to reach a settlement on acceptable terms,” Frank Sullivan, RPM’s chairman and chief executive officer, said in the statement.
Natalie Ramsey, an attorney for asbestos victims, confirmed that they had reached an agreement in principle with the company.
The bankruptcy case is In re Specialty Products Holdings Corp., 10-bk-11780, U.S. Bankruptcy Court, District of Delaware (Wilmington).