RPM International Inc. Reaches Agreement in Principle for Asbestos Claims
MEDINA, OH – RPM International Inc. announced an agreement in principle that would resolve all present and future asbestos personal injury claims related to Bondex International Inc. and other related entities.
In a press release announcing the agreement, the company said the agreement in principle “contemplates the filing of a plan of reorganization with the United States Bankruptcy Court in Delaware.” In 2010, RPM put Bondex and its parent company into bankruptcy.
Under the agreement, a trust would be set up with $450 million in cash and would eventually total $797.5 million over a four-year period.
As part of the agreement, Bondex’s parent company, Specialty Products Holding Corp. (SPHC), will remain a wholly owned subsidiary of RPM and its results of operations will be reconsolidated with those of RPM for financial reporting purposes when the plan begins. SPHC had revenues of approximately $385 million during the 12 months ended May 31, 2014, compared with revenues of approximately $300 million for the fiscal year ended May 31, 2010, when the bankruptcy commenced. Virtually all of SPHC’s growth over that period has been organic.
“We have been able to reach a settlement on acceptable terms that will resolve the Bondex-related asbestos liability, while enabling us to reconsolidate the financial results of SPHC’s growing and profitable businesses,” said Frank Sullivan, Chairman and Chief Executive Officer of RPM. “Consummation of a plan of reorganization incorporating these terms will allow RPM to move forward and put this chapter in our history behind us.”
The plan will be subject to approval of the claimants, as well as the U.S. Bankruptcy Court and U.S. District Court. RPM expects the Bankruptcy Court will schedule future proceedings regarding the matter, and it expects the plan to be completed by the end of fiscal 2015.