EnPro Receives $118 Million Asbestos Insurance Settlement

EnPro Industries (USA) has settled asbestos insurance liability-related claims with its insurers, for a total of USD $188 million. Spun off from Goodrich in 2002, EnPro is all the businesses formerly part of Goodrich's Engineered Industrial Products group. Goodrich said it did the spinoff, similar to TRW's reasoning, in order to focus entirely on the aerospace industry. Beyond the refocusing-on-aerospace angle, however, EnPro also provided Goodrich the opportunity to spin off its mounting asbestos liabilities. Garlock Bearing and Goodrich's now-defunct Anchor Packing Company are both defendants in thousands of asbestos-related claims actions. By spinning them off to EnPro, Goodrich was able to disassociate itself from the tide of asbestos claims hitting those companies. Garlock and Anchor manufactured products using encapsulated asbestos products, but even then discontinued distributing those products in the United States during 2000. EnPro is now two divisions. Engineered Products division is made up of GGB (formerly Glacier Garlock Bearings), Fairbanks Morse Engine, France Compressor, Haber Tool and Quincy Compressor. Sealing Products division is Garlock Rubber Technologies, Garlock Sealing Technologies, Helicoflex, Clozure, Plastomer Technologies and Stemco. The bearing component of EnPro is GGB, formerly known as Glacier Garlock Bearings, and the world's largest manufacturer ofprelubricated and self-lubricated metal-polymer plain bearings. It is made up of Goodrich's Garlock and the Glacier Industrial Bearing Division which it acquired from Dana in May 2001. Glacier was rolled under Goodrich's Garlock self-lubricated polymer bearings business and renamed Glacier Garlock Bearings. In mid-2003, Glacier acquired Saver North America, Inc. London-based Equitas reached the $188 million settlement with EnPro, involving $130 million in policies written by Lloyd's Underwriters and reinsured by Equitas. It, "resolves all claims made against Lloyd's Underwriters by EnPro and its subsidiaries." Approximately $30 million will be paid in cash directly to EnPro to reimburse claims already paid out. The balance, $88 million, goes into a new trust set up to resolve other asbestos-related claims made against EnPro subsidiaries. EnPro's claims against other insurers for asbestos liability payouts are not affected by this settlement. Ernie Schwab, President and CEO of EnPro, said: "This agreement provides significant benefits to EnPro. Resolution of the dispute brings our insurance reimbursements from Equitas up to date, while establishment of the trust ensures we will continue to receive cash payments of the Equitas portion of our remaining insurance in a timely and efficient manner." Equitas head of Asbestos Claims, Simon Wright, said: "We are pleased to have reached this comprehensive resolution of asbestos and pollution related claims with EnPro following many months of negotiations. We continue to discuss comprehensive settlements with a number of policyholders and remain willing to have similar discussions with any other assureds, large or small, so long as they are genuinely interested in reaching a realistic commercial settlement."