Vanderbilt Minerals, which mines materials used in industrial products, filed for bankruptcy after its cash flow was overwhelmed by an increase in lawsuits that accuse the company of once selling items contaminated by asbestos.
The firm, which denies that its products contained the cancer-causing substance, plans to hold an auction for its assets, according to a court filing Monday. The opening offer would be $50 million from Commodore Materials.
Vanderbilt, in the documents, blamed its bankruptcy on more than 1,400 talc lawsuits. The Norwalk, Connecticut-based company spent $8 million on talc-related cases last year. The firm “was cash-flow positive absent the growing costs of the talc-related litigation,” Chief Restructuring Officer Dean Vomero said in the filing. He added Vanderbilt faces $117.2 million in talc-related costs.
The company is the latest to file bankruptcy in order to shed debt related to talc. Johnson & Johnson unsuccessfully tried to use the bankruptcy of a small unit to rid itself of tens of thousands of claims that talc-based baby powder caused ovarian cancer. J&J denies the allegations and continues to fight the lawsuits outside of bankruptcy.
For decades, asbestos was used in everything from insulation to automobile break pads because of its ability to withstand heat. After it was linked to lung cancer and other diseases, the substance was heavily restricted by regulators.
In recent years, law firms that represent asbestos victims have expanded the number of targets they sue to include talc miners and companies that use the powdery substance. The number of cases exploded after J&J lost a lawsuit and was forced to pay more than $2 billion to a group of about 20 women.
Vanderbilt stopped mining talc in 2008, the company said in court documents. Its main products today include various forms of clay used in industrial materials from pharmaceutical and agriculture applications to personal-care products and construction materials.
The case is Vanderbilt Minerals LLC, 26-60110, US Bankruptcy Court, Northern District of New York.
Photo: (Photo by Brook Mitchell/Getty Images)
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