Garlock parent EnPro inks asbestos claims deal with Canadian provinces

By Caroline Salls

Pittsburgh, Nov. 18 – EnPro Industries, Inc. entered into a definitive settlement agreement with workers’ compensation boards for each of the 10 Canadian Provinces to resolve current and future asbestos claims against EnPro and some of its subsidiaries, including Garlock Sealing Technologies LLC, according to an EnPro news release.

In addition to Garlock Sealing, the subsidiaries include Garrison Litigation Management Group, Ltd., Coltec Industries Inc. and Garlock of Canada Ltd.

The settlement calls for recovery of a portion of amounts the provincial boards have paid and will pay in the future under asbestos injury recovery statutes in Canada.

EnPro said resolution of these Canadian claims has been a condition to EnPro, Coltec and Garlock Sealing’s obligations to proceed with a March 2016 comprehensive settlement with the committee representing current asbestos claimants, the legal representative of future asbestos claimants in Garlock Sealing’s case pending in the U.S. Bankruptcy Court for the Western District of North Carolina, as well as representatives for current and future asbestos claimants against Coltec.

According to the release, the provincial board settlement provides for a total cash payment to the boards of $20 million, payable on the fourth anniversary of the effective date of the Garlock Sealing/Coltec Chapter 11 plan.

After the plan effective date, the provincial boards can accelerate the payment, in which case the amount payable would be discounted from the fourth anniversary of the effective date to the payment date at a rate of 4.5%. EnPro said this is consistent with the present value estimate of $17 million it announced as the amount committed for the resolution of these claims.

In return, the provincial boards have separately agreed to release EnPro, its affiliates and the settlement trust to be established under the plan from any liability for asbestos-related claims and to provide a covenant not to sue EnPro, its affiliates or the settlement trust in connection with those claims.

The settlement is subject to bankruptcy court approval and is not binding on any of the EnPro parties until the plan effective date.

“This is yet another key milestone in our efforts to cleanse EnPro and its subsidiaries of the legacy asbestos claims that have plagued the company since its spinoff from the Goodrich Corporation in 2002,” EnPro president and chief executive officer Steve Macadam said in the release.

“We remain on track to reconsolidate GST into EnPro in the third quarter of 2017 and are looking forward to closing this chapter of EnPro’s history.”

Garlock is a subsidiary of Charlotte, N.C.-based EnPro Industries, which makes sealing products, bearings, compressors and engines. Garlock filed for bankruptcy on June 5, 2010, and its Chapter 11 case number is 10-31607.

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