8-KOther Events

Johnson Controls International plc 8-K Report, Corporate Update (Aug 20, 2015)

Filed August 20, 2015For Securities:JCI

Summary

Johnson Controls International plc (JCI) announced the effectiveness of the Yarway reorganization on August 19, 2015, marking a significant resolution to a Chapter 11 bankruptcy proceeding initiated by its indirect wholly-owned subsidiary, Yarway Corporation. This development provides a structured mechanism for addressing current and future asbestos-related claims through a funded Yarway Trust. This filing confirms that JCI contributed approximately $325 million in cash to the Yarway Trust. In return, JCI and other 'Company Protected Parties' received a release and a permanent injunction preventing the assertion of asbestos claims against them. This resolution aims to mitigate potential financial and legal liabilities stemming from historical asbestos exposure associated with Yarway's products.

Key Highlights

  • 1Effectiveness of Yarway Reorganization: The Chapter 11 plan for Yarway Corporation became effective on August 19, 2015.
  • 2Yarway Trust Established: A section 524(g) trust (the 'Yarway Trust') has been funded for the resolution of current and future asbestos claims.
  • 3Significant Cash Contribution: Johnson Controls contributed approximately $325 million in cash to the Yarway Trust.
  • 4Liability Resolution: The agreement resolves potential liabilities of Johnson Controls and its affiliates related to asbestos claims against Yarway.
  • 5Release and Injunction Granted: Company Protected Parties received a release and a permanent injunction against the assertion of Yarway Asbestos Claims.
  • 6Legal Process Completed: The Bankruptcy Court confirmed the plan, and the District Court affirmed the confirmation order, indicating significant progress through the legal process.

Frequently Asked Questions

The effectiveness of the Yarway Reorganization on August 19, 2015, means that the Chapter 11 bankruptcy plan for Yarway Corporation is now in effect. This establishes a structured process to handle existing and future asbestos-related claims stemming from Yarway's historical operations, providing clarity and a defined path forward for the company and its stakeholders.

Johnson Controls contributed approximately $325 million in cash to the Yarway Trust to fund the resolution of current and future asbestos claims related to Yarway's products.

In exchange for its contribution, Johnson Controls International plc, along with other designated 'Company Protected Parties,' received a release from Yarway and a permanent injunction. This injunction prevents the assertion of any current or future asbestos-related claims against Johnson Controls and its affiliates that arise from Yarway's operations.

This filing indicates that the specific liabilities related to 'Yarway Asbestos Claims' against Johnson Controls and its affiliates, as defined within the Chapter 11 plan, are resolved and permanently enjoined. However, investors should understand that this pertains specifically to claims covered by the Yarway Trust and the section 524(g) injunction. It does not necessarily preclude other potential liabilities not covered by this specific agreement.