Valves and Controls US: Actuarial Shock Triggers 524(g) Filing

Valves and Controls US, Inc.—formerly known as Weir Valves & Controls USA, Inc. and before that Atwood & Morrill Co., Inc.—filed for chapter 11 bankruptcy on July 25, 2025, in the District of Delaware, seeking to establish a Section 524(g) asbestos trust to permanently resolve legacy asbestos liabilities arising from decades of valve manufacturing. The company exists solely as a legacy liability entity: the operating business was sold to private equity firm First Reserve in July 2019 for £275 million (approximately $343 million) and rebranded as Trillium Flow Technologies, while asbestos claims and corresponding insurance assets remained with a subsidiary of parent company The Weir Group PLC. A triennial actuarial review in 2023 revealed a dramatic escalation in projected claims, with the Weir Group's asbestos provision surging 1,333% from £3 million in 2022 to £43 million in 2023, triggering the ultimate decision to seek bankruptcy protection.

The filing represents a textbook application of the Section 524(g) framework established in 1994 for channeling present and future asbestos claims to a dedicated trust. Valves and Controls joins more than 100 companies that have filed asbestos-related bankruptcies since Johns-Manville pioneered the approach in 1982, with approximately 60 active asbestos trusts currently holding an estimated $30 billion in assets available to pay claimants. The claims trace primarily to naval shipyard workers and industrial personnel who were exposed to asbestos-containing valve components manufactured by Atwood & Morrill, with documented exposure dating back to the 1950s and mesothelioma diagnoses emerging decades later due to the disease's long latency period. As a single-debtor filing—neither Weir Group PLC nor Trillium Flow Technologies are debtors—the case illustrates how sophisticated corporate transactions can isolate asbestos liabilities while preserving going-concern operations.

This case is notable for several reasons beyond its procedural mechanics. First, the timing: the bankruptcy follows a 2019 transaction specifically designed to separate operating assets from legacy liabilities, allowing First Reserve to acquire a thriving valve and pump business free of asbestos exposure. Second, the actuarial catalyst: a single triennial review revised projected claims so dramatically that it transformed a manageable run-off portfolio into an untenable liability. Third, the claimant profile: naval shipyard workers who serviced Atwood & Morrill valves on warships decades ago now constitute a significant portion of the claim population, connecting this industrial bankruptcy to the broader history of asbestos exposure in American defense manufacturing. The case proceeds with experienced asbestos bankruptcy counsel—Weil, Gotshal & Manges for the debtor and Brown Rudnick and Caplin & Drysdale for the asbestos claimants' committee—toward what is expected to be a consensual trust resolution.

Case Snapshot

Weir Flow Control Sale and Liability Carve-Out

The current bankruptcy is the consequence of a 2019 corporate transaction that deliberately separated operating assets from legacy liabilities—a structure that allowed an energy-focused private equity firm to acquire a thriving industrial business while leaving asbestos exposure with the seller's subsidiary. Understanding this transaction is essential to understanding why Valves and Controls US, Inc. exists as a separate entity and why its chapter 11 filing does not affect the ongoing operations of the valve and pump business.

The Weir Group's Strategic Decision. The Weir Group PLC is a Scotland-based engineering conglomerate with a history dating to 1871, operating across mining, oil and gas, and power generation markets. By 2018, Weir had determined that its Flow Control division—which manufactured valves and pumps for power generation and industrial applications—was no longer core to its strategy. In April 2018, Weir announced plans to divest the Flow Control division, initiating a sale process that would culminate in a transaction announced in February 2019. The decision to sell reflected Weir's broader strategic pivot toward higher-margin mining equipment and away from the competitive industrial valve market.

First Reserve Acquisition. In February 2019, First Reserve signed an agreement to acquire Weir Flow Control at an enterprise value of £275 million (approximately $343 million). First Reserve is a leading global private equity investment firm exclusively focused on energy, having raised approximately $32 billion of aggregate capital since its inception. The acquisition fit First Reserve's strategy of investing in energy infrastructure and industrial businesses. The transaction closed on July 1, 2019, with the business rebranded as Trillium Flow Technologies.

Brands and Business Scope. Trillium Flow Technologies acquired a portfolio of 15 established global pump and valve brands serving power generation, oil and gas, water and wastewater, mining, and industrial sectors worldwide. The valve brands included Sarasin-RSBD, Blakeborough, Hopkinsons, SEBIM, BDK, Batley Valve, AutoTork, Tricentric, and the Atwood & Morrill operating assets. The pump brands included Gabbioneta, WSP, WEMCO, Roto-Jet, Floway, and Begemann. Together, these brands represented decades of engineering heritage in flow control applications, with manufacturing facilities and customer relationships across multiple continents.

The Liability Carve-Out Structure. The critical aspect of the transaction—and the reason for the current bankruptcy—is how the parties handled legacy asbestos liabilities. Rather than transferring asbestos exposure to First Reserve (which would have required significant reserves or purchase price adjustment), the transaction was structured so that certain U.S. subsidiaries of Weir retained the Flow Control legacy asbestos exposure together with corresponding insurance assets. The Weir Group's 2019 annual report disclosed that Weir "provided customary indemnification to First Reserve," meaning the buyer acquired the operating business free and clear of asbestos claims with contractual protection against any attempted assertion of claims against the acquired entity.

This structure is common in transactions involving companies with asbestos exposure. By separating the liability into a distinct entity with its own insurance assets, the seller can divest the operating business at fair value while retaining the obligation to manage legacy claims—typically through a run-off arrangement funded by insurance recoveries and, if necessary, parent company support. For six years, Weir managed the liability entity as a run-off asset. The 2023 actuarial review changed that calculus.

Atwood & Morrill and Naval Asbestos Exposure

The asbestos claims derive from valve manufacturing operations that date back decades, with particularly significant exposure occurring at naval shipyards where workers serviced valves containing asbestos components.

Corporate Heritage and Acquisition History. Atwood & Morrill Co., Inc. manufactured valves containing asbestos components for much of the twentieth century, supplying products to industrial customers, power plants, and the United States Navy. The company's valves—like those of many industrial equipment manufacturers of the era—incorporated asbestos in gaskets, packing materials, and thermal insulation components. Asbestos was valued for its heat resistance, durability, and affordability, and was considered standard engineering practice until the health consequences became widely understood. The Weir Group acquired Atwood & Morrill in 1990, integrating it into the Flow Control division that would later be sold to First Reserve. The company subsequently operated as Weir Valves & Controls USA, Inc. before the current Valves and Controls US, Inc. name.

Naval Shipyard Exposure Pattern. A significant portion of asbestos claims against valve manufacturers stem from naval shipyard workers who installed, maintained, and repaired valves aboard Navy vessels. These workers routinely handled valve components containing asbestos, often without adequate respiratory protection, generating airborne asbestos fibers during installation, removal, and refurbishment operations. The confined spaces of ship engine rooms concentrated exposure, and workers frequently carried asbestos fibers on their clothing, creating secondary exposure risks for family members.

The Morgan v. Aurora Pump Co. case (Washington Court of Appeals, 2011) provides illustrative detail of how these claims arise. James Morgan worked at the Puget Sound Naval Shipyard for approximately 37 years and developed mesothelioma from asbestos exposure. He filed suit in August 2007 against multiple defendants, including Weir Valves & Controls USA, Inc. (formerly Atwood & Morrill Co., Inc.). Evidence established that Morgan worked with Atwood valves aboard the USS Princeton as early as March 1954. The case illustrates the characteristic pattern: exposure decades ago at naval facilities, diagnosis decades later due to mesothelioma's long latency period (typically 20-50 years), and litigation against the companies whose products were present during the exposure period.

Litigation History and Defense Outcomes. Not all asbestos claims resulted in plaintiff recovery. Valve manufacturers, including Atwood & Morrill, have successfully defended claims on various grounds, most commonly product identification—demonstrating that the specific plaintiff cannot establish exposure to the specific defendant's product among the many asbestos-containing products present in industrial and naval environments. In one North Carolina federal court case, Atwood & Morrill was awarded summary judgment after the court concluded the plaintiff failed to establish that the valves at issue were used in the specified engine room at the same time the plaintiff was present.

These defense victories illustrate the evidentiary complexity of asbestos valve litigation. Workers in industrial environments were often exposed to asbestos products from dozens of manufacturers, and establishing which products caused a specific plaintiff's disease requires detailed evidence of the plaintiff's work history, the products present at specific locations during specific time periods, and the plaintiff's actual contact with those products. This evidentiary burden creates litigation risk on both sides—claimants may fail to prove their cases, but defendants face substantial verdict exposure when proof is established.

Actuarial Trigger and Path to Bankruptcy

The decision to file for bankruptcy followed a 2023 actuarial review that revealed dramatically higher projected claims than previous estimates, transforming a manageable run-off liability into an untenable exposure that required resolution through the bankruptcy system.

Run-Off Provisioning Model. Following the 2019 sale to First Reserve, Weir Group continued to carry the asbestos liabilities on its balance sheet as "other adjusting items" not related to current ongoing trading. The 2022 Annual Report disclosed that the U.S. asbestos provision and associated insurance asset were key provisions requiring management judgment, and that movements in the provision for asbestos-related claims related to the Flow Control Division sold in 2019. The liability was treated as a run-off asset: as claims arose, they were paid from insurance assets and provisions, with actuarial reviews periodically adjusting projected future costs to ensure adequate reserves.

For companies managing asbestos run-off, the actuarial review is a critical juncture. Actuaries analyze historical claim filing rates, average claim values, expected future claimant populations (based on known exposure cohorts and disease incidence rates), and insurance coverage availability to project the total liability. These projections are inherently uncertain—they depend on assumptions about future claim behavior, legal developments, and disease progression in aging exposed populations. When assumptions change, provisions can change dramatically.

The 2023 Actuarial Shock. The 2023 triennial actuarial review revealed substantially higher projected claims than previous estimates. Weir Group's asbestos-related provision increased from £3 million in 2022 to £43 million in 2023—a 1,333% increase in a single year. The company attributed the adjustment to "a period of increased claims and revised claims projections from latest triennial actuarial review." This magnitude of increase indicated that the liability had fundamentally exceeded what could be managed through the run-off model.

The reasons for such actuarial revisions in asbestos cases typically include: increased claim filing rates (more exposed workers coming forward), higher average claim values (inflation in verdicts and settlements), revised mortality assumptions for exposed cohorts (workers living longer means more reach the age when mesothelioma develops), and changes in insurance recovery assumptions (disputed coverage or exhausted policies). Whatever the specific drivers for Weir's revision, the outcome was clear: continued run-off was no longer viable.

Bankruptcy Filing. On July 25, 2025, approximately 18 months after the 2023 actuarial review, Valves and Controls US, Inc. filed its chapter 11 petition in Delaware. The filing constituted a single-debtor case: neither parent company Weir Group PLC nor the operating business under First Reserve/Trillium ownership became debtors. This structure reflects the liability carve-out from the 2019 transaction—the operating business was sold free and clear, and only the legacy liability entity required bankruptcy protection. Notices of Suggestion of Bankruptcy were immediately filed in pending state court asbestos cases, including in New York County, where Cook Group PLLC served as attorneys for the defendant. These notices informed state courts that the automatic stay now applied to the debtor, halting all pending litigation.

Section 524(g) Trust Framework

The bankruptcy seeks to establish a permanent channeling mechanism for all present and future asbestos claims under established Bankruptcy Code provisions—a framework developed specifically for managing the unique challenges of asbestos mass tort liability.

The Statutory Framework. Section 524(g) of the Bankruptcy Code, established in 1994 and most recently updated in 2022, provides a specialized framework for companies to create trusts that permanently channel present and future asbestos claims. Unlike typical bankruptcy, which discharges existing debts, asbestos liability presents a unique challenge: claims continue to arise decades after exposure because mesothelioma and other asbestos-related diseases have latency periods of 20-50 years. A debtor cannot simply estimate and discharge claims that haven't yet manifested in the claimant population.

Section 524(g) addresses this by allowing debtors to create trusts funded to pay both present claims (already filed or manifested) and future claims (those that will arise as exposed individuals develop disease). The trust is accompanied by a "channeling injunction" that directs all claims—present and future—to the trust rather than the reorganized company. This provides the debtor (and any successor entities) with permanent protection from asbestos liability while ensuring claimants have access to a funded mechanism for compensation.

The Johns-Manville Precedent. The framework originated with Johns-Manville Corporation, which filed the first major asbestos bankruptcy in 1982. The company had been one of the largest asbestos miners and product manufacturers in the world, and its bankruptcy was unprecedented in both scale and complexity. The Manville Personal Injury Settlement Trust began accepting claims in 1987, establishing the template for asbestos trust administration. Congress codified and refined the framework through Section 524(g) in 1994, providing statutory authority for the channeling mechanism that had been developed through judicial innovation.

Industry Landscape and Trust Statistics. More than 100 companies have filed for bankruptcy protection from asbestos lawsuits since the Johns-Manville filing, and the practice continues as new companies face escalating claims or adverse actuarial developments. Currently, more than 60 active asbestos trust funds operate in the United States, holding approximately $30 billion in assets available to pay claimants. More than $17 billion has been paid out since the first trust was created in 1988. Trust fund payouts vary widely based on disease severity, exposure history, and individual case circumstances, ranging from approximately $7,000 to $1.2 million, with a median claim value of approximately $180,000.

Comparable Case: Leslie Controls. Leslie Controls, another valve manufacturer with asbestos-containing products, provides a direct precedent for the Valves and Controls case. Leslie Controls sold valves made with asbestos components for most of the twentieth century and faced substantial asbestos litigation. The company filed for bankruptcy in 2010 and created a 524(g) trust fund with funding consisting of $75 million contributed by Leslie and parent company CIRCOR, plus proceeds from remaining asbestos insurance assets. CIRCOR's announcement of the pre-negotiated plan emphasized that the trust would permanently resolve asbestos liability, removing the contingency from CIRCOR's balance sheet and providing certainty to both the company and claimants.

The Leslie Controls precedent suggests the structure Valves and Controls is likely to pursue: negotiation with the asbestos claimants' committee to establish trust funding levels (combining cash contributions and remaining insurance assets), development of trust distribution procedures that balance claimant recovery with fund sustainability, and a confirmed plan that includes the Section 524(g) channeling injunction. The experienced counsel on both sides—familiar with asbestos trust negotiations—makes a consensual resolution the expected outcome.

Professional Retentions

The case has assembled experienced asbestos bankruptcy counsel on all sides, reflecting the specialized nature of Section 524(g) proceedings and the established bar that practices in this area.

Debtor Professionals. Weil, Gotshal & Manges LLP serves as lead bankruptcy counsel, bringing extensive experience in complex corporate restructurings and asbestos-related bankruptcies. Cole Schotz P.C. serves as Delaware co-counsel, providing local expertise in the District of Delaware bankruptcy court. Paul Hastings LLP provides additional counsel. On the financial side, AP Services, LLC provides restructuring advisory services, with Scott M. Tandberg designated as Chief Restructuring Officer responsible for managing the debtor entity through the bankruptcy process.

Asbestos Claimants' Committee Professionals. The official committee of asbestos claimants—which represents the interests of current and future claimants in trust negotiations—is represented by two experienced co-counsel. Brown Rudnick LLP and Caplin & Drysdale, Chartered share co-counsel responsibilities. Both firms have deep experience in asbestos bankruptcy proceedings, having represented claimants' committees or trusts in numerous 524(g) cases. FTI Consulting, Inc. serves as the committee's financial advisor, providing analytical support for evaluating debtor financial capacity and trust funding proposals. Raines Feldman Littrell LLP serves as committee Delaware counsel.

Claims Administration. Kroll Restructuring Administration LLC serves as claims and noticing agent for the case, responsible for maintaining the official claims register, distributing notices to creditors, and administering the claims process. The official case portal provides information for claimants and creditors.

The Weir Group Context

Understanding the parent company context helps explain the bankruptcy timing and the resources available to fund a trust resolution.

The Weir Group PLC. The Weir Group is a publicly traded engineering conglomerate headquartered in Scotland, listed on the London Stock Exchange. Founded in 1871, Weir has evolved from a pump manufacturer serving shipbuilding and sugar industries to a focused mining equipment provider. The company's current strategy centers on providing equipment and services to the global mining industry, including pumps, hydrocyclones, and crushers. The 2019 sale of Flow Control to First Reserve reflected this strategic focus—divesting industrial flow control operations to concentrate on higher-margin mining equipment.

Financial Provisions Disclosure. Weir's financial statements provide transparency into the asbestos liability management. The company treated the asbestos provision as an "other adjusting item" separate from ongoing trading operations, reflecting that the liability related to divested operations. The 2022 Annual Report noted that the provision was subject to management judgment and that movements related to the Flow Control Division sold in 2019. The 2023 provision increase from £3 million to £43 million represented a material development that likely prompted escalated discussions about bankruptcy as a resolution mechanism.

Parent Company Role in Resolution. While Weir Group PLC is not a debtor, the parent company typically plays an important role in 524(g) trust funding. In the Leslie Controls case, parent CIRCOR contributed to the trust alongside the debtor entity. Weir's financial capacity and the structure of the 2019 transaction—which included indemnification provisions to First Reserve—suggest that Weir will likely contribute to trust funding to achieve a comprehensive resolution that protects both the reorganized liability entity and the separated operating business now owned by First Reserve.

Key Timeline

Frequently Asked Questions

Why did Valves and Controls US file for bankruptcy?

The company filed to establish a Section 524(g) asbestos trust to permanently resolve legacy asbestos claims from historical valve manufacturing operations. A 2023 triennial actuarial review revealed dramatically higher projected claims than previous estimates, with the Weir Group's asbestos provision increasing 1,333% from £3 million in 2022 to £43 million in 2023. This magnitude of increase made continued run-off management untenable, prompting the bankruptcy filing to channel all present and future asbestos claims to a dedicated trust.

What is the relationship between Valves and Controls US and Trillium Flow Technologies?

Valves and Controls US, Inc. (formerly Weir Valves & Controls USA, Inc. and Atwood & Morrill Co., Inc.) is the legacy liability entity that retained asbestos claims when The Weir Group sold its Flow Control operating business to First Reserve in July 2019 for £275 million. Trillium Flow Technologies is the operating company—free of asbestos liabilities—that acquired the 15 valve and pump brands, manufacturing facilities, and customer relationships. The liability carve-out structure allowed First Reserve to acquire the operating business free and clear of asbestos exposure while Weir retained the historical claims with corresponding insurance assets.

What is a Section 524(g) trust?

Section 524(g) of the Bankruptcy Code, established in 1994 and updated in 2022, allows companies to create trusts that permanently channel present and future asbestos claims. The mechanism provides a "channeling injunction" directing all claims to the trust rather than the reorganized entity or related parties. This addresses the unique challenge of asbestos liability—claims that continue to arise decades after exposure due to long disease latency periods. More than 100 companies have used this framework since Johns-Manville pioneered it in 1982, with 60+ active asbestos trusts currently holding approximately $30 billion for claimants.

Who are the primary claimants in this case?

Claimants are primarily naval shipyard workers and industrial personnel who were exposed to asbestos-containing valve components manufactured by Atwood & Morrill decades ago. These workers installed, maintained, and repaired valves containing asbestos gaskets, packing, and insulation, generating airborne asbestos fibers during handling. For example, James Morgan, a 37-year Puget Sound Naval Shipyard employee who developed mesothelioma, sued after evidence established he worked with Atwood valves aboard the USS Princeton as early as March 1954. The long latency period for mesothelioma (20-50 years) means exposure from the 1950s through 1980s continues to generate claims today.

How was the 2019 sale structured to separate liabilities?

When First Reserve acquired Weir Flow Control for £275 million in July 2019, the transaction was structured so that certain U.S. subsidiaries retained the legacy asbestos exposure together with corresponding insurance assets. Weir provided customary indemnification to First Reserve, ensuring the buyer acquired the operating business free of asbestos claims. The liability entity remained as a Weir Group subsidiary in run-off status—insurance assets offset claims as they arose—until the 2023 actuarial review revealed escalating claims that made continued run-off untenable.

Is Weir Group or Trillium Flow Technologies a debtor?

No. This is a single-debtor filing. Only Valves and Controls US, Inc.—the legacy liability entity—is a debtor. Parent company The Weir Group PLC (Scotland) and the operating business now owned by First Reserve (Trillium Flow Technologies) are not debtors in the case. This structure isolates the asbestos claims within the dedicated liability entity while preserving the operating business as a going concern unaffected by the bankruptcy.

What brands were sold to Trillium Flow Technologies?

Trillium acquired 15 established pump and valve brands when it purchased Weir Flow Control. Valve brands include Sarasin-RSBD, Blakeborough, Hopkinsons, SEBIM, BDK, Batley Valve, AutoTork, and Tricentric. Pump brands include Gabbioneta, WSP, WEMCO, Roto-Jet, Floway, and Begemann. The Atwood & Morrill brand's operating assets (free of legacy liabilities) were also transferred. These brands serve power generation, oil and gas, water and wastewater, mining, and industrial sectors globally.

How much money is available in asbestos trusts nationally?

Approximately $30 billion remains available in 60+ active asbestos trust funds across the United States. More than $17 billion has been paid out since the first trust was created in 1988. Individual claim payouts range from $7,000 to $1.2 million depending on disease severity, exposure history, and other case-specific factors, with a median claim value of approximately $180,000. Trusts establish payment percentages based on available funds and expected future claims, periodically adjusting these percentages to maintain fund sustainability.

Is this case similar to other valve company asbestos bankruptcies?

Yes. Leslie Controls, another valve manufacturer that sold products containing asbestos components, provides a direct precedent. Leslie filed for bankruptcy in 2010 and created a 524(g) trust funded with $75 million from Leslie and parent CIRCOR, plus remaining asbestos insurance assets. The pre-negotiated plan permanently resolved asbestos liability and removed the contingency from CIRCOR's balance sheet. Valves and Controls is expected to pursue a similar structure, with trust funding from the debtor, Weir Group contributions, and remaining insurance assets.

What is the current status of the case?

The case is proceeding through professional retentions and case administration toward plan negotiation. Committee counsel (Brown Rudnick and Caplin & Drysdale) were approved in October 2025. An exclusivity extension motion was filed in November 2025, indicating the debtor is still developing its plan proposal. The case is expected to proceed toward a disclosure statement and plan proposing a Section 524(g) trust structure. Given the experienced counsel on both sides and the well-established 524(g) framework, a consensual resolution is anticipated.

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