Bondex, Rust-Oleum Maker Unit in Bankruptcy, Is Denied Asbestos Claim Data

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Bondex, Rust-Oleum Maker Unit in Bankruptcy, Is Denied Asbestos Claim Data

By Steven Church – Jul 25, 2011 12:39 PM ET

Bondex International Inc., the bankrupt unit of Rust-Oleum maker RPM International Inc. (RPM), can’t get data on compensation paid to asbestos victims the company wants to use to calculate future liabilities, a court ruled.

U.S. Bankruptcy Judge Judith K. Fitzgerald in Wilmington, Delaware, today denied Bondex’s request for details on payments that some asbestos-victims’ trusts may have made to people who also claimed to have been injured by Bondex’s home-repair products.

Bondex and Specialty Products Holding Corp filed for bankruptcy last year with plans to set up their own asbestos- victims trust to resolve future and current suits. To calculate how much money the companies, or their parent, RPM, must put into the trust, the companies sought data on past payments.

Bondex’s plan to use the data is “all based on a hypothetical that doesn’t exist,” the judge said in court.

Gregory M. Gordon, a Bondex attorney, said the model the company is trying to create may predict lower future payments by taking into account payments that other trusts made to victims who sued Bondex.

Fitzgerald has allowed Bondex to collect other details from asbestos victims to build its models.

Bankrupt companies and their parents can win immunity from future asbestos lawsuits by setting up trusts to cover medical and other costs associated with exposure to asbestos.

The bankruptcy case is In re Specialty Products Holdings Corp., 10-11780, U.S. Bankruptcy Court, District of Delaware (Wilmington).

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