Jun 5, 2010 - RPM Bankruptcy Attempt May Not Be Approved
RPM International Inc. is seeking to create bankruptcy code 524(g) trust to resolve more than 10,000 asbestos lawsuits filed against its subsidiaries, Specialty Products Holding Corp. and Bondex International Inc. The asbestos lawsuits are on behalf of plaintiffs that have been diagnosed with or died from asbestos related diseases, such as asbestosis, lung cancer and mesothelioma. However, according to court records an attorney for the U.S. Trustee said in court that RPM may not be able to resolve its asbestos liability by putting the two non-operating units into bankruptcy.
Attorney Richard Schepacarter works in the office of the U.S. Trustee, which monitors corporate bankruptcies for the Justice Department. RPM’s plan appears to conflict with previous bankruptcy court rulings involving asbestos trusts, Schepacarter said at a hearing today in Wilmington, Delaware. Because Specialty Products and Bondex are holding companies with no operations, may not be eligible to use bankruptcy to set up an asbestos trust, Schepacarter said.
That question is valid and should be answered before the case goes further, U.S. Bankruptcy Judge Kevin Carey said. Carey ordered a 14-day halt to asbestos lawsuits against RPM for a committee to be formed to represent people who developed asbestos-related diseases. Carey scheduled a June 15 hearing to decide what to do next after hearing from the representatives.
The bankruptcy case is In re Specialty Products Holdings Corp., 10-11780, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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