Kidde-Fenwal asks court to order mediation over AFFF litigation

By Sarah Lizee

Olympia, Wash., Nov. 3 – Kidde-Fenwal, Inc. is seeking mediation over issues related to lawsuits against the company asserting claims arising from the design, manufacture, distribution and sale of aqueous film-forming foam (AFFF), according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The company is trying to sell its operating business to a third party and set aside proceeds to pay legitimate claims.

“The problems caused by this litigation cloud are significant for the debtor and its sales effort – even if the debtor has not sold AFFF for a decade, the debtor has no judgment against it, and the debtor’s share of any potential AFFF liability is demonstrably modest,” the company said in the mediation.

Kidde-Fenwal said that at various times since the petition date, the plaintiffs’ executive committee in the multi-district litigation pending in the South Carolina district court and the official committee of unsecured creditors have alleged that the debtor’s exposure to AFFF liability is “massive,” and could be in the billions.

“Despite the hyperbolic statements, this is not the next mass tort case in the mold of PG&E, Purdue, Mallinckrodt or LTL,” the company said.

The company said it has very limited assets, meaning that protracted litigation and Chapter 11 costs serve only to dissipate those assets so that they are not available to pay any valid creditor claims.

As such, the company said it is seeking confidential mediation to right-size the size and scope of the Chapter 11 case, thus facilitating progress toward the debtor’s exit from bankruptcy.

The company said all proposed parties to the mediation support the motion.

The debtor has asked for retired bankruptcy judges Robert D. Drain and Layn R. Phillips to serve as co-mediators.

The industrial fire detection and suppression company is based in Ashland, Mass. The company filed bankruptcy on May 14 under Chapter 11 case number is 23-10638.

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