Asbestos Victims Committee Rejects Garlock Bankruptcy Plan

Legislation & Litigation
Reading Time: 4 mins
Publication Date: 06/23/2015
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How to Cite’s Article


Povtak, T. (2021, January 6). Asbestos Victims Committee Rejects Garlock Bankruptcy Plan. Retrieved February 8, 2023, from


Povtak, Tim. "Asbestos Victims Committee Rejects Garlock Bankruptcy Plan.", 6 Jan 2021,


Povtak, Tim. "Asbestos Victims Committee Rejects Garlock Bankruptcy Plan." Last modified January 6, 2021.

The committee of asbestos personal injury claimants in the ongoing bankruptcy case of Garlock Sealing Technologies (GST) is urging asbestos victims to reject the company’s second
amended reorganization plan.

The committee comprises 12 asbestos victims, represented by their attorneys, who were appointed by the bankruptcy court that will determine whether the plan to restructure the business can move forward.

The plan under debate would include $489.5 million to settle past and future claims over the next 40 years. It would cap the asbestos liability for Garlock and fundamentally change any future litigation.

A press release issued earlier this month shows the committee believes the plan does not provide enough money to compensate future claimants and does not comply with Congress’ bankruptcy code for asbestos-related reorganizations.

According to the committee’s official court filing, GST “paid or committed to pay $1.366 billion,” for asbestos-related claims between 1975 and June 5, 2010, when it originally filed for bankruptcy. The committee also believes Garlock’s present and future asbestos liability is $1.26 billion. However, a U.S. District Court judge sided with Garlock in 2014 and ordered a significantly lower liability of $125 million.

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Garlock Is Still Flourishing Today

Garlock is the current top manufacturer of industrial gasket products in the U.S. with an estimated 1,900 employees in 16 different operation centers that distribute its products to 75 countries.

Throughout much of the 20th century, Garlock used asbestos in manufacturing many of its products, including gaskets and valve packing. As those products
aged and frayed and were replaced, they released toxic asbestos fibers into the air, which became a serious health hazard. The inhalation or ingestion of asbestos can lead to a number of future health issues, including mesothelioma, lung cancer and asbestosis.

The products, known as Gylon, Flexseal, Blue-Gard and Garlock, were used to prevent leaks in pipes and valves where hot liquids, steam or acids flowed. They were used in oil refineries, chemical plants and power plants. They were used throughout the construction and shipbuilding industries. The U.S. Navy used them extensively.

The bankruptcy court rejected the first reorganization plan in 2013. All identifiable asbestos claimants, who already should have received a solicitation package that includes a voting ballot, will vote on the new plan. Votes must be returned by Oct. 6, 2015.

A court-appointed future claimants’ representative (FCR) already said he will support and vote to accept the reorganization plan.

Voting and Filing Deadline

Based on the reorganization plan, all asbestos-related claims against Garlock also must be filed before the Oct. 6, 2015 deadline to be considered valid. The exception would be asbestos-related injuries diagnosed after Aug. 1, 2014.

Under the plan, a $327.5 million settlement facility will be established to pay current and future claims. It will be accompanied by a $162 million litigation fund that will be available over the next 40 years. In exchange, the bankruptcy court will prohibit the future filing of asbestos-related claims against GST.

Current and future claimants will have the option of accepting a pre-arranged settlement based on a variety of issues, or moving to litigation that comes with various restrictions.

Garlock would not be responsible for anything beyond the pre-arranged total value of the plan. The committee believes the capped funding stream will be inadequate to pay all eligible claimants, through settlement or litigation judgement.

Fund Is Not Large Enough

An expert for the FCR recently estimated future Garlock liability at $900 million, although the company contends its liability is just $125 million.

Before filing for bankruptcy protection in 2010, Garlock defended itself aggressively against asbestos-related litigation, and denied asbestos in its products were a health hazard. There are more than 100,000 active claims still pending.

Also at issue now is exactly who can vote and how the voting process will work, particularly with those represented by the FCR.

If you believe you have suffered health issues caused by Garlock gaskets or other products, and you are considering filing a claim, you should talk with an experienced asbestos attorney. If you already have filed a claim with Garlock, you should discuss with your attorney how your vote will be cast.

The Western District of U.S. Bankruptcy Court in Charlotte, North Carolina, is scheduled to consider confirmation of the plan June 20, 2016.

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