A national industrial manufacturer recently set aside two newly created units of its business in order to fund an asbestos bankruptcy trust and relieve itself from the hundreds of mesothelioma cancer lawsuits it faces each and every year. As part of the liability restructuring, Trane Technologies Plc formed two subsidiaries, Aldrich Pump LLC and Murray Boiler LLC, back in May 2020 in order to transfer assets and liability to the new business entities and enjoin all asbestos cancer-related lawsuits against Trane Technologies.
After creating Aldrich Pump LLC and Murray Boiler LLC, Trane Technologies subsequently transferred tens of millions of dollars in cash and assets and recently had these entities file for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the Western District of North Carolina. The end game for the transfer of assets and liability is to ultimately establish an asbestos bankruptcy trust which plaintiffs with claims against Trane Technologies to file claims against.
According to Trane Technologies, the company resolves through trial or settlement an estimated 900 asbestos cancer lawsuits each year and spends nearly $100 million on litigation costs, which includes payouts for victims and the company’s out attorney’s fees. The strategy is a similar one enacted by other asbestos companies like Bestwall LLC and Kaiser Gypsum Company Inc. in order to shield the parent companies from asbestos cancer lawsuits brought by victims who claim they developed mesothelioma from exposure to asbestos in the defendant’s products.