Eagle Files for Chapter 11 Protection

Eagle-Picher Industries Inc., which faces multimillion-dollar asbestos injury claims, sought protection from its creditors today in federal bankruptcy court.

The company said the Chapter 11 filing ended attempts to settle 65,000 asbestos claims at once in federal court in Brooklyn, N.Y.

“That’s down the drain,” Eagle-Picher spokesman J. Rodman Nall said. “We’re finished with that.”

Asbestos claimants probably will be treated like other creditors in the reorganization, which could last two to six years, Nall said.

The company said the bankruptcy filing became necessary when a contract to sell one of the company’s divisions to finance asbestos settlements fell through.

Chairman Thomas E. Petry said that despite the filing in U.S. Bankruptcy Court in Cincinnati, Eagle-Picher expects to report $48 million in operating income for the fiscal year that ended Nov. 30.

The company has spent about $540 million during the last five years to settle 45,000 asbestos claims.

Eagle-Picher and one lawyer for a group of asbestos victims agreed last month to the creation of a trust worth $650 million to settle remaining claims. But 90 lawyers representing 40,000 claimants signed a petition opposing the settlement.

Eagle-Picher manufactures products ranging from batteries to auto parts and aluminum castings.