Rochester Business Journal

Palmyra-based Garlock Sealing Technologies LLC has filed for Chapter 11 bankruptcy protection to help resolve its ongoing asbestos-related litigation.

The voluntary court petition, filed in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte, would create a trust against pending and future asbestos litigation under Section 524(g) of the U.S. Bankruptcy Code.

That means Garlock would operate in the ordinary course under court protection from asbestos claims, while using the process available under Chapter 11 to develop and implement an asbestos claims resolution plan, the company said. All pending litigation against Garlock will be stayed during the process.

Garlock plans to negotiate with representatives of asbestos claimants to establish the trust. Absent a negotiated resolution, Garlock intends to ask the court to determine the amount necessary to fund the trust, the company said.

Company leaders said Garlock would continue normal business operations during the claims resolution process.

Stephen Macadam, president and CEO of North Carolina-based EnPro Industries Inc., which is Garlock’s parent company, said the goal is an efficient and permanent resolution of asbestos-related claims.

Company leaders said the firm has paid over $1.4 billion in settlements and judgments and more than $400 million in fees and expenses related to asbestos litigation.

Garlock contributed roughly $149 million of third-party sales and $20 million of segment operating income to EnPro's results in 2009, the company said.

"We believe Garlock has the resources to fund this trust in full without limiting its ability to grow and thrive," Macadam said in a statement. "Garlock is a healthy company with sufficient working capital to operate in the normal course throughout this process, and we are confident it will be able to meet the future needs and obligations associated with operating its business."

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