A supplier of electrical fuses and lighting fixtures, Cooper Industries Ltd., found a federal bankruptcy court’s decision not approving a settlement in an asbestos lawsuit to be a good thing. In 1998, the automotive sector of Cooper Industries was sold to a Michigan based company, Federal-Mogul. Over 365,000 asbestos-related lawsuits seeking millions of dollars in claims against Federal-Mogul forced the company to file for bankruptcy in 2001. In order for the company to reorganize, Federal-Mogul proposed to establish a trust fund to pay the asbestos lawsuits’ claims.
The U.S. Bankruptcy Court for the District of Delaware refused to approve the trust fund. As a result of a prior decision from another bankruptcy court, Cooper Industries will gain $138 million from the Federal-Mogul estate, and the pending asbestos lawsuits will continue to follow the proper channels through tort courts. Cooper will have access to insurance policies to help them with the costs of settling claims, if needed. Both Cooper Industries Ltd. and Federal-Mogul had their own positive views on the decision: “We are pleased that the decision has been made and can now move forward,” Chief Executive Kirk S. Hachigian from Cooper said in a statement. Federal-Mogul’s statement reported, “The Judge’s ruling effectively eliminated a remaining issue in our Chapter 11 case, and therefore allows Federal-Mogul to fully focus on its sustainable global profitable growth strategy.”