Dive Brief:
- HVAC system maker Carrier Global proposed a $615 million settlement agreement on Oct. 18 with aqueous film-forming foam manufacturer Kidde Fenwal., now known as KFI Wind-Down Corp, to resolve PFAS-related claims, according to a securities filing.
- Carrier will pay Kidde-Fenwal $190 million toward resolving PFAS-related drinking water contamination claims against the firefighting foam making company, according to an Oct. 25 securities filing. The HVAC manufacturer will also pay 100% of the net proceeds from the sale of KFI’s assets, which are estimated to be $115 million.
- The remaining $540 million will go toward paying Kidde-Fenwal’s creditors as part of a Chapter 11 bankruptcy plan. The company filed for bankruptcy in May 2023 seeking relief due to the numerous claims against the company regarding PFAS contamination in its firefighting foam, according to court documents.
Dive Insight:
Carrier became involved with the PFAS claims when it inherited Kidde-Fenwal stock after the HVAC company spun off from United Technologies — now known as RTX — in 2020.
Two months before Kidde-Fenwal filed for Chapter 11 bankruptcy, Carrier informed the company it would not financially support its indirect subsidiary amid its AFFF PFAS claims, according to a May 2023 release. One of the reasons was that Carrier was not involved nor responsible for Kidde-Fenwal’s aqueous fire foam activities, according to the release.
Carrier sold Kidde-Fenwal to private equity firm Pacific Avenue Capital Partners for $140 million in July, according to a July 25 securities filing. The company also changed its name to KFI Wind-Down, according to bankruptcy court filings.
Nevertheless, the forever chemical claims stayed with Kidde-Fenwal and Carrier, according to the Oct. 25 securities filing. A federal Delaware bankruptcy court ordered Carrier in November 2023 to participate in mediation sessions, which led to the $730 million settlement earlier this month.
Carrier is able to receive up to $2.4 billion in insurance payouts and will provide $125 million from the payment towards the settlement. Carrier also agreed to support Kidde-Fenwal with the insurance money for the claims as part of its sale agreement with Pacific Avenue Capital Partners.
Kidde-Fenwal is one of many chemical companies involved in ongoing multidistrict litigation regarding aqueous firefighting foam known to contain PFAS, dating back to 2018.
As of Sept. 30, Kidde-Fenwal is one of the defendants in more than 8,000 lawsuits accusing companies of contaminating firefighting foam with forever chemicals, according to Carrier’s Q3 securities filing.
Kidde-Fenwal faces claims for when it owned and operated the National Foam business from 2007 to 2013, as well as producing and distributing the aqueous fire foam before 2007, according to court documents. The manufacturer divested National Foam in 2013.
Carrier and Kidde-Fenwal join other companies settling their forever chemical claims. In May, BASF Corp., the North American affiliate of the Germany-based company, reached a $316.5 million settlement agreement to resolve water contamination claims.
3M’s $10.5 billion settlement was finalized on March 29, and DuPont, Chemours and Corteva’s $1.2 billion settlement was finalized on Feb. 8. Tyco and Chemguard reached a $750 million settlement, which was finalized in June.
