Wilmington, DEA manufacturer of home repair products besieged by a reported 15,000 asbestos mesothelioma lawsuits and a liability pegged at $1.1 billion has emerged from four-year bankruptcy protection infused with an $800 million trust fund for handling asbestos lawsuits and personal injury claims.
Specialty Products Holding Corp. (Specialty) opted for Chapter 11 bankruptcy protection in 2010 even though the company was profitable at the time. The strategy appeared to be an attempt to buy some time as personal injury claims mounted.
Mesothelioma is a form of asbestos cancer that attacks the membrane linings of the lungs and abdomen. The only known cause is exposure to asbestos fibers, and while relatively rare, there are no fewer than 3,000 cases diagnosed each year in the US, according to the Dover Post (Delaware, 11/19/14). There is no known cure.
Two affiliates of Specialty, Republic Powdered Metals Inc. and NMBFiL Inc. were, as Chapter 11 debtors and together with Specialty, assessed a $1.1 billion liability in May 2013.
The companies’ portfolio of products include patching plaster, joint cement, roof coatings and various other household products within the Bondex brand, and are highly popular. The trouble began, however, when the products were linked to asbestos cancer and asbestosis - as well as mesothelioma - and the asbestos claims started to roll in.
Specialty’s parent company, RPM International Inc. (RPM), agreed to a plan that will infuse the trust with $797.5 million over a four-year period. The plan, as approved and confirmed by US Bankruptcy Judge Peter J. Walsh, will see RPM fund the trust with $450 million in cash once the plan becomes effective, with additional contributions in cash, stock or both to reach the pre-tax level of $797.5 million. The after-tax figure realistically sits at $485 million, according to sources.
The asbestos mesothelioma compensation fund falls under Section 524(g) of the US Bankruptcy Code.
“We are pleased to bring finality to our legacy Bondex asbestos liability and welcome back into the RPM family an outstanding group of SPHC operating companies that are generating more than $400 million in sales on an annualized basis,” said RPM CEO Frank C. Sullivan in a statement, when the funding agreement was announced.
Various plaintiffs in asbestos claims seek relief and compensation after working with or around exposed asbestos without being cautioned by employers about the carcinogenic potential of asbestos, a product widely used up until the 1970s when its use was drastically curtailed, although not eliminated completely.
Asbestos cancer and mesothelioma is unique in that it can incubate in the body for upwards of 30 years or more following exposure, before suddenly emerging. Plaintiffs in an asbestos lawsuit usually seek asbestos compensation for medical bills, and for help looking after their families after they are gone. Mesothelioma usually equates to a death sentence, and many plaintiffs do not survive long enough to see their trial through, let alone begin.
The case is In re: Specialty Products Holding Corp., case number 1:10-bk-11780, in the US Bankruptcy Court for the District of Delaware.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to a personal injury lawyer who may evaluate your Asbestos Mesothelioma claim at no cost or obligation.