Two US RPM units file for bankruptcy in bid to end asbestos suits

01 June 2010 21:18  [Source: ICIS news]

HOUSTON (ICIS news)--Two non-operating units of US coatings and sealants producer RPM International filed for Chapter 11 bankruptcy protection, part of a plan to resolve the company's longstanding asbestos claims, a ratings firm said on Monday.

In all, RPM's exposure to the litigation would likely be no worse than if the company tried to resolve the lawsuits through state courts, according to Moody's Investors Service.

Moody's estimated that the asbestos lawsuits could be resolved in 3-4 years. The filing of the two nonoperating subsidiaries should have no immediate effect on RPM's credit facilities or public debts.

The RPM subsidiaries that filed under Chapter 11 bankruptcy protection were Specialty Products Holding and its subsidiary, Bondex, RPM said.

Both filed on Sunday in the bankruptcy court in Delaware.

Neither RPM nor the rest of its operating subsidiaries were part of the filing, and they would not be affected by it.

Specialty Products reported $329m (€266m) in revenues during the fiscal year of 2009, less than 10% of the consolidated revenue of RPM, the company said.

The filing would put RPM's asbestos lawsuits on hold, the company said. Meanwhile, the two subsidiaries would establish a trust that would pay off any asbestos claims.

Since the asbestos liabilities would be confined to those two subsidiaries, any payouts would be limited to the value of those business units, RPM said.

($1 = €0.81)

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By: Al Greenwood
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