PALMYRA, N.Y., June 5 /PRNewswire-FirstCall/ -- Garlock Sealing Technologies LLC, a global leader in fluid-sealing products and a wholly owned subsidiary of EnPro Industries, Inc. (NYSE: NPO), announced that it has taken a step toward a permanent resolution of asbestos-related personal injury claims against the company. Today, Garlock filed a voluntary petition in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code.
The filing includes the Garrison Litigation Management Group, Ltd., which manages Garlock's asbestos claims and relationships with its insurers, and The Anchor Packing Company, which ceased operations in the mid-1990s.
"With this action, we moved toward resolving asbestos claims against our company in a permanent, transparent and efficient manner," said Dale Herold, president of Garlock Sealing Technologies. "We have begun a process that we believe will result in a comprehensive resolution of all current and future claims against Garlock while preserving the value and protecting the future of our company and without interruption of our normal business operations."
Garlock previously manufactured products which contained asbestos. Despite the fact that the asbestos fibers were non-friable and encapsulated within the product, Garlock has defended claims regarding exposure to asbestos in gasket sealing products for 35 years. Garlock has processed more than 900,000 asbestos claims to conclusion (including judgments, settlements and dismissals) and, together with its insurers, has paid over $1.4 billion in settlements and judgments and over $400 million in fees and expenses.
Garlock anticipates that the process it initiated today will not disrupt service to customers, that suppliers will be paid in full, that employees will retain their salaries and benefits and that retiree pensions and other benefits will continue to be paid in the ordinary course. Garlock has obtained $10 million in debtor-in-possession (DIP) financing from Bank of America, which, subject to court approval, would provide additional liquidity, if necessary, during the process.
Herold stated, "Garlock's cash flows should be sufficient for us to operate our business without interruption and to maintain our commitments to our employees, customers, and suppliers. The DIP financing would provide additional resources, should we need them. As we begin this process, we have complete confidence in the dedication of our employees, who are the core of our operation. We also greatly value our relationships with our customers and suppliers and appreciate their continuing support."
"Most importantly, we remain committed to excellence in all that we do. We will continue to be a safe and productive company, a good neighbor, a good place to work and a strong competitor," added Herold.
Garlock will operate in the ordinary course under court protection from asbestos claimants while in the claims resolution process available under Chapter 11. All pending litigation against Garlock will be stayed as the company seeks to develop and implement a court-approved plan to permanently resolve all asbestos-related claims. Garlock plans to negotiate with representatives of asbestos claimants to establish a trust to pay all valid claims. Absent a negotiated resolution, Garlock intends to ask the court to determine the amount necessary to fund the trust.
"This step is not an indication of current financial distress at Garlock," Herold said. "Our company is strong. We believe we can fund a settlement trust in full with our own resources while maintaining our position as the leader in fluid sealing technology and preserving our opportunities for growth."
Steve Macadam, president and chief executive officer of EnPro Industries, said, "We are completely committed to Garlock. It is a core investment, and we will continue to seek opportunities for growth in the markets it serves."
The filing covers only Garlock operations in Palmyra, New York and Houston, Texas. Garlock Rubber Technologies, Garlock Helicoflex, Pikotek, Technetics, Garlock Europe and Garlock operations in Canada, Mexico or Australia are not affected by the filing, nor is EnPro Industries or any other EnPro operating subsidiary.
About Garlock Sealing Technologies
Headquartered in Palmyra, NY, Garlock Sealing Technologies LLC is an EnPro Industries, Inc. company (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications.
Statements in this release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. The words "may," "hope," "will," "should," "could," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "continue," and other expressions which are predictions of or indicate future events and developments and which do not relate to historical matters identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: Garlock's ability to reach acceptable agreements with asbestos claimants and other creditors, Garlock's ability to obtain court approval for a proposed plan, unforeseen developments affecting Garlock's ability to pay creditors in full and adequately fund a trust to resolve all current and future asbestos claims. We do not undertake to update any forward-looking statement made in this release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based.
SOURCE Garlock Sealing Technologies LLC