In a move that would end a long-running legal drama, EnPro Industries has reached a $480 million settlement to resolve current and future asbestos claims against the Charlotte-based diversified manufacturer and its subsidiaries.
Under the agreement announced late Thursday, the company would create a $480 million trust that would cover asbestos claims stemming from Garlock Sealing Technologies and Coltec, the two EnPro businesses that have been subject to U.S. claims.
Garlock, a Palmyra, N.Y.-based company which makes seals and gaskets for a host of industries, has been a target of asbestos-related lawsuits for some 40 years. It filed for Chapter 11 protection in 2010, one of dozens of otherwise solvent businesses that turned to the courts for help in settling thousands of claims of asbestos poisoning.
Asbestos is at the center of the country’s longest running liability case. And Garlock was among the last industrial targets to seek bankruptcy protection. Coltec is an EnPro subsidiary and Garlock’s parent.
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EnPro said the settlement was reached with court-appointed representatives of current and future claimants. The agreement is subject to approval from claimants and the courts.
“We’re confident that this agreement puts us on a clear path to final and permanent resolution,” EnPro CEO Stephen Macadam said in a conference call Friday with analysts.
EnPro said the plan could become final during the summer of 2017, barring unexpected objections. EnPro shares closed up 3 percent at $60.12 on Friday.
EnPro was spun off in 2002 from Goodrich Corp., the former Charlotte-based aerospace company that was acquired by United Technologies in 2012. Goodrich moved its headquarters to Charlotte after it bought Coltec Industries, a landing-gear maker based here, in 1999.
EnPro, which had sales of $1.2 billion in 2015, employs about 50 at its Charlotte headquarters.
Up until the mid-1980s, asbestos was widely used in insulation and as a fire retardant. But its tiny, jagged particles can lodge in the linings of the lungs and other organs, causing cells to mutate. That’s led to years of litigation against companies that used asbestos in their products from claimants who said they suffered from asbestos-related diseases.
In the Garlock case, attorneys representing current and future victims had asked the court to set the company’s liability at $1.3 billion. But in 2014, a federal judge in Charlotte accepted the $125 million figure proposed by the company.
EnPro later increased that figure to $480 million to get all claimants on board and to cover future administrative costs, said Dan Grgurich, EnPro’s director of investor relations and corporate communications. In the conference call Friday, Macadam said the company believes its products “were safe and are safe and did not cause any asbestos-related diseases.”
As part of the settlement announced Thursday, Garlock will eventually emerge from bankruptcy court protection, Grgurich said. Staff writer Michael Gordon contributed