A look at two rulings $1.5B apart in bankruptcy proceedings of Garlock, Bondex
By HEATHER ISRINGHAUSEN GVILLO
August 12, 2014 Legal Newsline - WILMINGTON, Del. (Legal Newsline) – Despite similar allegations and circumstances surrounding the Bondex International, Inc. and Garlock Sealing Technologies bankruptcy proceedings, the two cases reached very different judgments, bringing into question why.
For starters, both companies sought Chapter 11 bankruptcy protection after litigating hundreds of thousands of asbestos cases in courtrooms across the country. However, the judge in Bondex’s proceeding ordered it to put $1.6 billion into a bankruptcy trust, while the judge in Garlock’s case ordered it earlier this year to put only $125 million in one.
On July 28, RPM International Inc. announced an agreement with the bankruptcy representatives of current and future claimants in order to resolve Bondex-related asbestos liability. According to the agreement, RPM would pay $797.5 million over four years and resolve all present and future asbestos personal injury claims related to its subsidiary Bondex International, Inc. The case is currently being litigated in the U.S. Bankruptcy Court in Delaware.
On the other hand, Judge George Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina concluded on Jan. 10 that Garlock needed to put $125 million in its bankruptcy trust, which is more than $1 billion less than what plaintiffs’ attorneys requested as Garlock’s liability.
Also, both companies claim their products exhibited relatively low asbestos exposure to a limited population.
Professor Lester Brickman, with the Benjamin N. Cardozo School of Law of the Yeshiva University, agreed, saying both companies were “a very minor player in causing high level exposures to the most intensely toxic forms of asbestos,” but were, nonetheless, hit with a large number of lawsuits because they were still solvent companies that could be taken to trial.