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Leslie Controls seeks bankruptcy for asbestos claims


TAMPA, Fla. (Bloomberg)—Leslie Controls Inc., a unit of Circor International Inc. that equipped U.S. ships in wartime, filed a prenegotiated Chapter 11 reorganization to resolve asbestos liability claims.

The valve maker listed assets of as much as $50 million and debt of as much as $100 million in Chapter 11 documents filed Monday in U.S. Bankruptcy Court in Wilmington, Del. Circor didn't seek bankruptcy protection.

The company, founded in 1905 by J.S. Leslie, also manufactures regulators, steam water heaters and controls. Tampa, Fla.-based Leslie was a major supplier of steam control equipment for military and merchant ships during both world wars.

“The cost of defending and resolving Asbestos PI Claims asserted against Leslie has been and continues to be substantial,” G. Wayne Day, Leslie's chief restructuring officer, said in court papers. Leslie has about 1,307 pending asbestos personal injury claims, according to court papers.

The Chapter 11 plan calls for establishment of a trust for payment to holders of asbestos claims. The trust will be funded by a $75 million contribution from Leslie and Circor together with proceeds from existing insurance policies and $2.6 million of the proceeds from a settlement between Leslie and Continental Casualty Co., court papers show.

Steam piping

The claims primarily relate to the use of asbestos on U.S. Navy ships from the 1940s to the 1980s to insulate steam piping and valves, according to the filings. Some of the personal injury and wrongful-death claims relate to two small component parts that were previously used inside the body of a Leslie valve. The components were purchased from outside suppliers.

Under U.S. law, all litigation against a company or individual seeking bankruptcy protection is put on hold while the case is pending. A judge can grant a request to allow the claims to proceed outside bankruptcy court in some instances.

The reorganization plan is supported by “many key members of the plaintiffs bar,” the company said in a statement. “Leslie is confident that the plan will obtain the required approval of 75% of current asbestos claimants.”

The case is In re Leslie Controls Inc., 10-12199, U.S. Bankruptcy Court, District of Delaware (Wilmington).

&Copy;2010 Bloomberg News