Carrier Global has finalized a $730 million settlement with its fire protection unit Kidde-Fenwal and claimants who sued the bankrupt subsidiary over toxic “forever chemicals” found in its firefighting foam products.
In a court filing on Friday in Delaware, Kidde-Fenwal announced plans to use the settlement to develop a Chapter 11 plan that will pay its creditors, which include local governments, companies, and individuals who allege that the foam products contaminated drinking water and soil with perfluoroalkyl and polyfluoroalkyl substances (PFAS) near airports and military bases across the U.S.
The settlement has gained support from a committee representing Kidde-Fenwal’s junior creditors and the lead plaintiffs in the PFAS lawsuits. The company will allocate $540 million to Kidde-Fenwal and $190 million to the PFAS plaintiffs.
Carrier detailed in a Friday filing with the U.S. Securities and Exchange Commission that it will fund the settlements with $615 million in cash over five years, supplemented by $115 million raised from the sale of Kidde-Fenwal’s assets to private equity firm Pacific Avenue Capital Partners, approved in April.
Carrier also noted that it is eligible for up to $2.4 billion in insurance payouts for the PFAS claims, sufficient to cover the settlement costs. Additionally, Carrier agreed to contribute more insurance rights to Kidde-Fenwal, potentially providing further funding for the water pollution settlements.
Kidde-Fenwal filed for bankruptcy in May 2023 after facing more than 4,400 PFAS lawsuits, which have been centralized in federal court in South Carolina. These lawsuits involve allegations from local governments, companies, and individuals claiming that chemical firefighting foams sold by Kidde-Fenwal between 2007 and 2013 caused extensive contamination of drinking water and soil.
In related developments, water providers in the U.S. reached a $10.3 billion settlement with 3M and a $1.19 billion settlement with DuPont, Chemours, and Corteva, resolving claims that those companies contaminated drinking water with PFAS.
The case is Kidde-Fenwal Inc, U.S. Bankruptcy Court for the District of Delaware, No. 23-10638.
