Tyco Fire Products LP, an indirect subsidiary of Johnson Controls (NYSE:JCI), has reached a settlement agreement to pay $750 million in relation to PFAS contamination claims.
The settlement, announced today, is connected to the nationwide class action of public water systems that have detected per- and polyfluoroalkyl substances (PFAS) in their drinking water, allegedly due to Tyco's Aqueous Film Forming Foam (AFFF) products.
The agreement, which is subject to the approval of the United States District Court for the District of South Carolina, stipulates that Tyco will make an initial payment of $250 million around May 25, 2024, with the remaining $500 million due six months post-preliminary court approval, anticipated in mid-May 2024.
This settlement is part of the multi-district litigation (MDL) that Tyco has been involved in, and it covers claims against Tyco, Chemguard, Inc., and other related entities.
The charge was recorded in the quarter-ended March 31, 2024, and the settlement is expected to benefit a broad class of public water systems that have found PFAS in their water up to May 15, 2024.
Exclusions from the settlement include water systems owned by state or federal government, those without PFAS detection by the specified date, small transient water systems, privately-owned drinking water wells, and the water system in Marinette, Wisconsin, unless it opts in.
Tyco has a substantial amount of insurance and plans to use the proceeds from these policies to cover a significant portion of the settlement cost. However, the exact amount and timing of insurance recoveries remain uncertain.
The settlement does not admit liability or wrongdoing by Tyco or Chemguard. If the MDL court does not approve the settlement or if certain conditions are not met, the companies will continue to defend themselves in court.
The settlement also does not affect other cases within the AFFF MDL, such as personal injury or property damage cases, or future claims from water systems that detect PFAS after May 15, 2024.
Finalization of the settlement is contingent upon several procedural and legal steps, with the process expected to last several months. This announcement is based on a press release statement.
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