EnPro reaches settlement regarding Canadian asbestos claims
EnPro announced that it has entered into a definitive settlement agreement with workers' compensation boards for each of the ten Canadian Provinces to resolve current and future asbestos claims. The agreement resolves all claims against EnPro and certain of its subsidiaries, Garlock Sealing Technologies, Garrison Litigation Management Group, Ltd., Coltec Industries, and Garlock of Canada Ltd, for recovery of a portion of amounts the Provincial Boards have paid and will pay in the future under asbestos-injury recovery statutes in Canada. An agreement for the resolution of these Canadian claims has been a condition to EnPro, Coltec and GST's obligations to proceed with the March 2016 comprehensive settlement reached with the court-appointed committee representing current asbestos claimants, the court-appointed legal representative of future asbestos claimants in GST's asbestos claims resolution process pending in the U.S. Bankruptcy Court for the Western District of North Carolina, and representatives for current and future asbestos claimants against Coltec. As contemplated by the Comprehensive Settlement, GST and Coltec have filed a modified joint plan of reorganization with the Bankruptcy Court, which set December 9, 2016 as the deadline for asbestos claimants to vote on approving the Joint Plan. The settlement agreement provides for an aggregate cash payment to the Provincial Boards of $20M, payable on the fourth anniversary of the effective date of the Joint Plan. After the effective date of the Joint Plan, the Provincial Boards will have the option of accelerating the payment, in which case the amount payable would be discounted from the fourth anniversary of the effective date of the Joint Plan to the payment date at a discount rate of 4.5% per annum. This is consistent with the present value estimate of approximately $17M, before tax, that EnPro has previously announced as the amount committed for the resolution of these claims. In return, the Provincial Boards have separately agreed to release EnPro, any of EnPro's affiliates and the settlement trust to be established under the Joint Plan from any liability for any present or future asbestos-related claims by the Provincial Boards and to provide, among other protections, a covenant not to sue EnPro, any of EnPro's affiliates or the settlement trust with respect to any such claims. The settlement agreement will not become effective unless the Bankruptcy Court enters an order approving it or concluding that Bankruptcy Court approval is not necessary for the EnPro Parties to the Agreement that are not debtors under the Joint Plan to enter into and consummate the settlement agreement. The settlement agreement further provides that it is not binding on any of the EnPro Parties unless and until the effective date of the Joint Plan shall have occurred.