Trane Technologies Plc has placed two newly created business units into bankruptcy to deal with legacy asbestos liabilities and free the industrial manufacturer from facing exposure-related lawsuits going forward.
Aldrich Pump LLC and Murray Boiler LLC filed petitions for Chapter 11 relief Thursday with the U.S. Bankruptcy Court for the Western District of North Carolina, with the ultimate aim of establishing a trust for channeling asbestos-related personal injury claims.
Similar to the Chapter 11 cases for Bestwall LLC or Kaiser Gypsum Company Inc., the Trane units seek a channeling injunction to address ongoing litigation, saying they pay nearly $100 million annually in settlement and defense costs. On average, the companies resolve 900 lawsuits a year alleging that their asbestos-containing products caused mesothelioma, Aldrich and Murray said in court papers.
The companies lamented a nationwide “sue and settle” system of asbestos litigation in which multiple manufacturers are named in exposure cases.
“The debtors’ goal in these chapter 11 cases is to provide current and future claimants with a simpler, more streamlined process to get funds to legitimate claimants in a timely manner,” they said.
Aldrich and Murray were formed as part of a May corporate restructuring, in which the debtors took on legacy liabilities previously held by Trane and merged entity Ingersoll-Rand Co.
The predecessors historically manufactured or sold pumps, compressors, and HVAC equipment that “in some instances, incorporated certain asbestos-containing components manufactured and designed by third parties,” according to court papers.
Upon their creation, Aldrich and Murray were allocated about $42 million in cash and equity in non-bankrupt Trane subsidiaries worth an estimated $50 to $57 million, Chief Restructuring Officer Ray Pittard said in a court filing. The debtors also hold about $1.7 billion in personal injury insurance coverage, he said.
The companies are scheduled to appear in front of the bankruptcy court June 22, requesting an order enjoining all asbestos-related suits against any other Trane entities.
The debtors are represented by Jones Day.
The case is In re Aldrich Pump LLC, Bankr. W.D.N.C., No. 3:20-bk-30608, Petition filed 6/18/20.