Asbestos-Plagued Valve Maker Files for Bankruptcy
Friday, 16 July 2010 13:15A valve-making unit within Circor International has filed a pre-negotiated Chapter 11 bankruptcy to hinder the sweeping litigation crashing towards them. Asbestos, which commonly causes malignant mesothelioma, has been traced to Circor valves that were used by the U.S. Navy from the 1940s to 1980s in both military and merchant ships. Circor’s Leslie Controls has a rising tide of asbestos claimants coming forth with damages claims.
So far, victims of the steam control equipment valves have cost the company $4 million in the first quarter and, $18.7 million so far in the second. The final numbers are still rolling in, and Circor expects the total to round out $27.2 million, pre-taxed between the months of April and June. Last year, the company spent 5.5 percent of its company’s revenue on the health injury claims; this year, the dollars spent on compensating asbestos victims have unfortunately exceeded its revenue.
The Chapter 11 bankruptcy would not entirely excuse the company from health-related damages claims. Instead, it would organize all of the available funds into a finite trust to compensate victims. The funds would come from parent Circor International, as well as Leslie Controls’ insurance funds. Therefore, the inestimable number of asbestos victims would only be able to draw from a $75 million stash. The practice of using a trust for injury claim victims is under 524(g) of the U.S. Bankruptcy Code. The claimants involved (here the asbestos victims) are represented by several lawyers who agree to the compensation prior to the actual bankruptcy filing.
Leslie Controls is not new to the game of filing for bankruptcy in order to deal with asbestos litigation—they filed in the last decade with the same intent. In fact, their pre-negotiated Chapter 11 is so neatly outlined, the company could exit bankruptcy within an efficient 120-day period.
If you need the financial safe haven of bankruptcy, you too could have a swift and easy exit, perhaps within a few months. Get professional legal advice from one of the skilled attorneys of Legal Helpers. Call us toll-free at 1-800-260-1402 today. www.legalhelpers.com




