Fire protection company Kidde-Fenwal files for bankruptcy citing PFAS lawsuits

Signage is seen at the United States Bankruptcy Court for the Southern District of New York in Manhattan, New York City

By Dietrich Knauth

(Reuters) - Kidde-Fenwal Inc, a subsidiary of Carrier Global Corp that specializes in fire control systems, filed for bankruptcy on Sunday, as it buckles under the weight of lawsuits alleging that "forever chemicals" in its firefighting foam products have contaminated water sources around U.S. airports and military bases.

Kidde-Fenwal filed for Chapter 11 protection in Delaware bankruptcy court. The company is seeking a buyer for its business, saying its likely liability in the litigation "substantially exceeds" its capacity to pay.

Since 2016, Kidde-Fenwal has been named as a defendant in more than 4,400 lawsuits filed by local governments, companies and individuals, claiming that aqueous film forming foam (AFFF) products contaminated drinking water and soil with perfluoroalkyl and polyfluoroalkyl substances, known as PFAS or "forever chemicals." Kidde-Fenwal sold AFFF foam products from 2007 to 2013, according to court documents.

Kidde-Fenwal is one of several defendants, along with 3M Co and DuPont de Nemours Inc, to face a bellwether trial in June in South Carolina federal court, where AFFF litigation has been consolidated.

The litigation has cost Kidde-Fenwal $6 million in 2023 alone. Kidde-Fenwal has $318 million in assets, and had $200 million in sale revenue for 2022, according to its court filings.

AFFF was jointly developed by 3M and the U.S. military in the 1970s, and has primarily been used to quickly extinguish burning fuel fires at military bases and airports, according to court documents.

Kidde-Fenwal does not make AFFF products, but it previously sold AFFF products through a subsidiary called National Foam. Kidde-Fenwal sold National Foam in 2013 for $77 million to a company that became known as New National Foam, according to court documents.

Carrier Global said Monday that it would support Kidde-Fenwal's efforts to find a buyer in bankruptcy, and that all proceeds from the sale would be available to pay AFFF liabilities and other claims. Carrier said there was "no assurance" that it would receive any recovery from a bankruptcy sale.

Carrier took ownership of Kidde-Fenwal when both companies were spun off from United Technologies Corp in 2020. Carrier said in a Monday statement that Kidde-Fenwal was an independently managed company and was not a "strategic fit" for Carrier going forward.

PFAS are found in thousands of products, from cell phones to food packaging. They have been the subject of an increasing number of lawsuits linking them to cancer, other health risks and environmental damage. 3M, a central defendant in the AFFF lawsuits, has said it would stop producing PFAS by 2025.

The case is In re Kidde-Fenwal Inc, U.S. Bankruptcy Court for the District of Delaware, No. 23-10638.

For Kidde-Fenwal: Derek Abbott of Morris, Nichols, Arsht & Tunnell; and Justin DeCamp of Sullivan & Cromwell

Read more:

North Carolina sues 3M, others over firefighting foams

3M to end 'forever chemicals' output at cost of up to $2.3 bln

New York sues 3M, five others over toxic chemical contamination

California sues 3M, DuPont over toxic 'forever chemicals'

(Reporting by Dietrich Knauth)