The bankrupt units of specialty chemicals maker RPM International Inc. may have to set aside twice as much money for asbestos-related liabilities as the company estimated, after a bankruptcy judge rejected what she called a "novel" theory from the debtor, Reuters reported yesterday. Bankruptcy Judge Judith Fitzgerald ruled that $1.2 billion was an appropriate net present value for current and future asbestos claims for Specialty Products Holding Corp and Bondex International Inc. The two units of RPM had argued that the liability should be between $300 million and $575 million. Specialty Products and Bondex filed for bankruptcy in May 2010 with the intent of creating an asbestos trust that would settle all personal injury claims stemming from the two companies' products. The companies and RPM would then be shielded from any further lawsuits related to those products. Specialty Products argued that the history of asbestos claims brought against the company overstated the number of injuries caused by its products, because it was settling nuisance cases to cut the cost of litigation. If those nuisance settlement costs were stripped out of the estimation process, Specialty Products argued it would need to set aside far less money to cover future claims. Judge Fitzgerald rejected that argument.
