A subsidiary of O-I Glass Inc. has entered bankruptcy following numerous asbestos lawsuits filed against the company.

The subsidiary, Paddock Enterprises, LLC, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware as a means to “equitably and finally resolve all of its current and future asbestos-related claims,” according to a statement from the company.

Under a new holding company structure, on Dec. 27, O-I Glass became the parent company for Owens-Illinois Group Inc. and Paddock. All of the company’s asbestos-related claims were isolated within Paddock and separated from the company’s glass-making operations, according to the company’s statement. Neither O-I Glass nor O-I Group are included in the bankruptcy filing and will continue under normal operations.

The company continues to make substantial payments to resolve claims of people alleging exposure to asbestos-containing products made in the 1940s and 1950s, mostly the company's Kaylo brand of insulation. 

From 1948 to 1958, a former O-I business unit made and sold approximately $40 million worth of Kaylo, a high-temperature, calcium silicate-based pipe and block insulation material containing asbestos.

O-I exited the insulation business in April, 1958, but claims from persons alleging bodily injury and death as a result of exposure to Kaylo asbestos continue. From 1993 through 2018, O-I said it has paid out about $5 billion for approximately 400,000 claims for asbestos-related liabilities.

The goal, according to the company, is to reorganize under a provision in the U.S. Bankruptcy Code to establish a trust to address all current and future asbestos-related claims. According to the company, all asbestos-related claims payments will be suspended pending the bankruptcy filing’s final resolution.

First Published January 7, 2020, 8:51 p.m.