The pre-negotiated Chapter 11 reorganization plan filed by Leslie Controls, Inc., was affirmed by the U.S. District Court for the District of Delaware, allowing the Tampa-based company to emerge from bankruptcy protection — making available its $75 million asbestos trust.
Leslie provided gaskets and valves that contained asbestos for U.S. Navy ships from the 1940s to the ’80s. Leslie had been named in a growing number of asbestos-related personal injury claims and sought bankruptcy protection in 2010.
Parent company CIRCOR made the announcement of court approval earlier this month, expecting conclusion of the process within 60 days. The plan is intended to resolve Leslie’s asbestos liability through the trust, which will handle all pending and future litigation.
The inhalation of asbestos fibers is the primary cause of mesothelioma, the cancer with the long latency period, and a number of other respiratory illnesses.
Although veterans are prohibited from bringing liability claims directly against the U.S. military, which is protected by sovereign immunity and the Feres Doctrine, they can file claims against companies like Leslie, which provided the Navy with the toxic products.
In previous legal debates, Leslie has contended that asbestos in products provided to the Navy remained fully encapsulated and did not contribute to the exposure of veterans. According to the Leslie news release when it filed for protection, the company record $35.2 million in revenue for 2009, which was approximately 5.5 percent of CIRCOR’s revenue of $642.6 million for the same year.
All claims and litigation against Leslie were suspended in 2010 under bankruptcy laws, but claims against the trust are expected to resume quickly once approval of the reorganization plan is finalized.
CIRCOR, which has more than 7,000 customers in 100 different companies, designs, manufactures and markets valves and subsystems that safely control the flow of fluids in industrial, energy and aerospace markets.
The pre-negotiated plan allowed the bankruptcy process to move quickly and more cost effectively than conventional filing, which often can take considerably longer to complete.