IN RE RADIATOR SPECIALTY CO. ET AL., 2024 NCBC 29

STATE OF NORTH CAROLINA
UNION COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS 1286
In re:
RADIATOR SPECIALTY
COMPANY, INC.; RSC HOLDINGS,
INC.; RSC CHEMICAL
SOLUTIONS, LLC; GUNK LLC;
LIQUID WRENCH LLC; TITE SEAL
LLC; RSC BRANDS, LLC; and RSC
LICENSOR, LLC,
Debtors.
ORDER AND OPINION ON
RECEIVER’S MOTION TO APPROVE
CLAIMS RESOLUTION AND
DISTRIBUTION PROCESS
1. 	At the outset of this case, Michael L. Martinez was appointed as Receiver
for Radiator Specialty Company, Inc. and its affiliates.1 	The appointment order
directed him to recommend a process for resolving claims against the receivership
estate. Pending is the Receiver’s motion to approve his proposed claims process, (ECF
No. 42), as well as one objection to that proposal by an interested nonparty, (ECF No.
53). 	For the following reasons, the Court GRANTS the motion and OVERRULES
the objection.
Grier Wright Martinez, PA, by Anna S. Gorman, Michael L. Martinez,
and A. Cotton Wright, for Receiver Michael L. Martinez.
Bradley Arant Boult Cummings LLP, by Jonathan E. Schulz, and
Fishkin Lucks LLP, by Matthew Cairone, for Interested Nonparty United
States Steel Corp.
Wallace and Graham, P.A., by John Hughes and Mark Doby, and Locks
Law Firm, by Andrew J. DuPont, for Interested Nonparties Certain
Putative Plaintiffs.
1 The debtors include Radiator Specialty’s parent company and six subsidiaries. 	For
simplicity, the Court refers to them all, together, as Radiator Specialty.
In re Radiator Specialty Co. et al., 2024 NCBC 29.

North 	Carolina 	Department 	of 	Justice, 	by 	T. 	Davis 	Hill, 	III, 	for
Interested 	Nonparty 	North 	Carolina 	Department 	of 	Environmental
Quality, ex rel. Joshua H. Stein, Attorney General.
Conrad, Judge.
I.
BACKGROUND
2. 	Radiator Specialty opened its doors in North Carolina in the 1920s with a
single product for radiator repair. It flourished in the ensuing decades, adding new
product lines, annexing other companies, and building a national footprint. 	At its
peak, 	Radiator 	Specialty 	and 	its 	affiliates 	had 	hundreds 	of 	employees 	and
coast-to-coast 	operations 	in 	“the 	automotive 	aftermarket, 	plumbing, 	hardware,
industrial, traffic safety and appliance industries.” (Compl. ¶¶ 8, 9, 19, ECF No. 3.)
3. 	But those days are long gone. Radiator Specialty has succumbed to financial
distress 	brought 	on 	by 	a 	wave 	of 	tort 	litigation, 	including 	thousands 	of
personal-injury lawsuits in which claimants allege that long-term exposure to
products containing benzene or asbestos caused them to develop cancer or another
similarly grave disease. Settlements and legal bills to date have topped $50 million—
a number that is sure to grow. 	Unable to bear these expenses on its own, Radiator
Specialty sued its insurance carriers to compel them to provide coverage under more
than 100 product-liability policies that it had accumulated over the years. 	That
litigation ended in defeat,2 however, and left Radiator Specialty with virtually no
insurance coverage and no way to meet the projected cost of future tort cases. Out of
2 The North Carolina Supreme Court had the final word in the case. See generally Radiator
Specialty Co. v. Arrowood Indem. Co., 383 N.C. 387 (2022).

options, it filed this action and entered receivership. 	(See Compl. ¶¶ 24, 25, 27, 31,
32, 37, 38; R’ship Order 10, ECF No. 4.)
4. 	Administering claims against the receivership estate is one of the Receiver’s
many duties. 	As directed, he has recommended a process for resolving known and
unknown claims and distributing funds to holders of allowed claims. 	His proposal
divides claims into three groups. (See R’ship Order 13.)
5. 	The first and largest group of claims includes the tort claims that led to
Radiator Specialty’s demise. There are hundreds of active claims already, and there
will likely be hundreds more to follow. The Receiver proposes to resolve all of them
through a liquidating trust. 	A comprehensive Liquidating Trust Agreement spells
out the details. The short version is this: the trust will absorb the remaining assets
of the receivership estate, minus some cash; a claimant need submit only a simple
form and proof of a medical diagnosis to make out a valid claim for payment; the
trustee will approve and pay claims on a rolling basis until the trust runs dry; and
acceptance 	of 	payment 	triggers 	a 	release 	of 	all 	claims 	against 	the 	trust 	and
receivership estate. Claimants will receive $325 for an allowed asbestos claim, $5,500
for an allowed product-liability claim, and somewhere between $750 and $60,000 for
an allowed benzene claim depending on the underlying diagnosis. 	These amounts
equate to 40% of what Radiator Specialty has paid on average to settle similar claims
in the past. 	(See generally Rev’d Proposed Liquidating Trust Agrmt. [“Rev’d
Liquidating Trust Agrmt.”], ECF No. 54.2.)

6. 	The second group of claims is environmental in nature, stemming from
Radiator 	Specialty’s 	ongoing 	responsibility 	under 	state 	and 	federal 	laws 	to
investigate, monitor, and remediate contamination on real property that it owns or
used to own. 	Radiator Specialty established a trust in 2017 to assure the North
Carolina Department of Environmental Quality (“the Department”) that there would
be enough funds to continue and complete these remediation activities if it ever went
out of business. This environmental trust has nearly $2 million in assets. Given the
availability of those assets, the Receiver contends, the assets of the receivership
estate and the liquidating trust should not be expended for continued cleanup and
monitoring activities.
7. 	The third group of claims is a catchall for overdue taxes, outstanding
invoices, unpaid insurance premiums, and other miscellaneous claims. The Receiver
proposes to handle these claims through the receivership, not the liquidating trust.
As proposed, claimants will have sixty days to submit a claim form. 	The Court will
then allow or disallow claims based on the submitted materials and the Receiver’s
recommendation, with payment for each allowed claim capped at 40% of its value. To
ensure that the receivership estate has enough funds to pay allowed claims, the
Receiver will reserve $750,000 from the assets earmarked for the liquidating trust.
8. 	After the Receiver tendered his proposed claims process, the Court received
an objection from United States Steel Corporation, an interested nonparty. 	United
States Steel is often named as a codefendant alongside Radiator Specialty in
litigation in Pennsylvania state courts involving benzene exposure. Its worry is that

a benzene claimant who receives only 40% of the value of his or her allowed claim will
try to recover the shortfall from other accused tortfeasors, contrary to Pennsylvania
law. 	This does not mean that United States Steel opposes the liquidating trust
outright. 	Rather, what it seeks is to change the form of the release in a way that
would stop the claimant from pursuing the unpaid amount from anyone else. A group
of putative claimants responded to United States Steel’s objection to state their
support for the Receiver’s proposal and to oppose any change to the form of the
release. 	(See U.S. Steel Corp.’s Opp’n, ECF No. 53; Putative Claimants’ Reply in
Supp., ECF No. 60.)
9. 	The Court also received an objection from the Department, which sought to
ensure that the assets of the preexisting environmental trust would be used only for
their intended purpose—cleanup and remediation activities. (See N.C. Dept. of Env.
Quality’s Objection, ECF No. 51.) The Receiver agreed to revise the Liquidating Trust
Agreement to make this clear. Satisfied, the Department withdrew its objection.
10. 	All briefing is complete. On 16 January 2024, the Court held a hearing on
the motion and United States Steel’s objection. The motion is ripe for decision.
II.
ANALYSIS
11. 	In supervising a receivership, the trial court must “establish the claims
process to be followed in the receivership addressing whether proofs of claim must be
submitted, the form of any proofs of claim, the place where the proofs of claim must
be filed, the deadline or deadlines for filing the proofs of claim, and other matters
bearing on the claims process.” 	N.C.G.S. § 1-507.49(b). 	How to do so is a matter of

discretion. Receiverships vary in scope and purpose and often affect the interests of
many individuals and entities. 	Balancing these competing interests demands a
flexible approach, tailored to the circumstances of the receivership and its creditors.
See Lambeth v. Lambeth, 249 N.C. 315, 321 (1959) (discussing equitable nature of
receiverships).
12. 	A few points are most salient here. 	One is that Radiator Specialty is no
longer a going concern. 	The claims process is part and parcel of a broader plan to
dissolve the company, liquidate its assets, and distribute them to creditors.
13. 	Another is that the receivership estate’s most significant liabilities come
from tort litigation. Dealing with the sheer volume of tort claims is a challenge. Plus,
there are many unknowns. 	In addition to existing claims, new claims will continue
to arise as more individuals develop symptoms that they allege to have been caused
by exposure to harmful chemicals in Radiator Specialty’s products. 	Projecting and
accounting for these future claims are complex problems.
14. 	A further point is that the receivership estate does not have enough funds
to make every claimant whole—or anywhere close to it. 	The weight of existing and
impending tort litigation is simply too great. 	In this situation, when the value of
allowed claims is certain to exceed the value of the estate’s assets, there is a genuine
risk that a poorly designed claims process might favor some claimants at the expense
of others. The goal is to minimize that risk and fairly distribute scarce resources in
a way that treats each claimant as equitably as possible.

15. 	The Receiver’s proposal accomplishes that goal. 	His recommendation to
resolve all tort claims through a liquidating trust is well suited to the needs of this
case. 	The 	concept 	comes 	from 	bankruptcy 	law, 	where 	liquidating 	trusts 	are
commonly created “as successor entities to Chapter 11 debtors” and “tasked with the
responsibility 	of 	liquidating 	and 	distributing 	the 	assets 	that 	remain 	after
confirmation of the plan of reorganization.” LaSala v. Bordier et Cie, 519 F.3d 121,
127 n.1 (3d Cir. 2008). Creating a liquidating trust will not only facilitate the process
of dissolving Radiator Specialty but also protect tort claimants down the road. 	It is
an efficient way to deal with the high volume of these claims over an extended time
horizon, long after Radiator Specialty has been dissolved.
16. 	Furthermore, the trust’s plan of distribution, as detailed in the Revised
Liquidating Trust Agreement, is fair. Using data from settlements of past cases, the
Receiver has grouped anticipated tort claims into seven categories, estimated their
values, and fixed the payout amounts for allowed claims at 40% of those values.
Starting from a historical baseline is a sensible, reasoned approach that accounts for
the differences among tort claims while treating similarly situated claimants the
same. 	And fixing the payout amount at 40% of claim value means that there won’t
be an immediate run on the trust’s assets—a measure designed to ensure that
tomorrow’s claimants will be no worse off than today’s.
17. 	Likewise, the trust’s procedural rules are more than reasonable. 	Included
in the Receiver’s proposal is a tort claim form (attached as exhibit B to his motion).
All that a claimant needs to do to make a valid claim is to submit that form to the

trustee with some basic proof. 	For benzene and asbestos claims, this would include
an affirmation that the claimant used Radiator Specialty’s products and proof of a
medical diagnosis. 	For product-liability claims, it would include some additional
detail about the product at issue and the timing of the injury. 	This means that the
trust will be easy to administer, enabling the trustee to act quickly without the
burden of having to review voluminous submissions. 	Claimants will receive money
faster and with less hassle, and administrative fees will not deplete the trust’s assets.
Indeed, no claimant has objected to the fairness of these procedures, and one group
of putative claimants has thrown its support behind the proposed liquidating trust.
18. 	The only objection to the liquidating trust comes from United States Steel,
whose aim is to limit its own potential liability to benzene-related tort claimants. In
many cases, claimants who blame their injuries on Radiator Specialty also blame
others, including United States Steel. Traditional rules of joint and several liability
allow a claimant injured by multiple tortfeasors to seek full and complete relief from
any one of them. 	Here, the liquidating trust guarantees each claimant 40% of an
allowed claim—thus paying just part of Radiator Specialty’s share of the overall
liability for the claimant’s injury. 	The risk, as United States Steel sees it, is that
claimants may look to recover the shortfall from other joint tortfeasors. United States
Steel seeks amendments to the Revised Liquidating Trust Agreement to keep that
from happening.
19. 	United States Steel bases its objection partly on Pennsylvania law because
it often defends against benzene-related tort actions in Pennsylvania state courts. In

recent years, Pennsylvania “abolished joint and several liability in most tort cases”
so that each defendant is liable only for its apportioned share of the fault. 	Rhoads
Indus. v. Shoreline Found., Inc., 2022 U.S. Dist. LEXIS 36386, at *8 (E.D. Pa. Mar.
1, 2022). Of note, any party (such as United States Steel) may ask the trier of fact to
allocate part or all of the fault to a nonparty (such as Radiator Specialty) that settled
and entered into a release with the plaintiff. The party asking to allocate fault to a
settling nonparty must do so with “appropriate requests and proofs.” 	42 Pa. Cons.
Stat. § 7102(a.2).
20. 	According to United States Steel, the release provisions in the Revised
Liquidating Trust Agreement risk depriving it of the “appropriate . . . proofs” needed
to ask Pennsylvania courts to allocate fault to Radiator Specialty in benzene-related
tort cases. 	To be sure, a tort claimant must release all claims against Radiator
Specialty in return for payment from the liquidating trust. 	But the claimant need
not sign a standalone release document; the release takes effect automatically upon
negotiation of the distribution check. To ensure its ability to prove the release to the
satisfaction of Pennsylvania courts, United States Steel seeks to modify the Revised
Liquidating Trust Agreement to require the trustee to obtain and keep a signed,
standalone release from each claimant.
21. 	This concern is wholly speculative. 	It presumes that tort claimants who
receive distributions from the liquidating trust will routinely dispute that they’ve
cashed the check and released their claims against Radiator Specialty under the
terms of the Revised Liquidating Trust Agreement. That seems unlikely. Moreover,

the Pennsylvania statute requires appropriate, not unequivocal, proofs of a release.
United States Steel cites nothing—no Pennsylvania case, for example—to support its
fear that courts might construe the statute narrowly to require a standalone release.
On the other hand, requiring the trustee to collect and retain an extra document from
hundreds of claimants would impose considerable administrative burdens. 	Those
burdens, and the associated cost to the trust, far outweigh any likely benefit to United
States Steel. 	The Court therefore overrules the objection to the extent it seeks an
amendment to require a standalone release from each claimant.
22. 	Of course, Pennsylvania is not the only forum for benzene-related litigation.
Many tort claimants sue in jurisdictions where joint and several liability remains the
norm. 	It is possible that a tort claimant, having accepted a distribution from the
liquidating trust and released his or her claims against Radiator Specialty, could go
on to obtain a judgment against tortfeasors that are jointly liable with Radiator
Specialty. 	In that event, the judgment must be offset to account for the partial
recovery that the claimant has already received. One option is to offset the judgment
by the entirety of Radiator Specialty’s share of fault. Another option is to offset the
judgment only by the amount of the distribution from the trust. 	The Receiver
recommends 	the 	latter 	approach, 	known 	as 	a 	pro 	tanto 	release. 	(See 	Rev’d
Liquidating Trust Agrmt. § 6.5.)
23. 	United States Steel objects to a pro tanto release because it would allow a
claimant to recover the shortfall from one of Radiator Specialty’s joint tortfeasors.
Ordinarily, a tortfeasor that pays more than its share of the overall liability can seek

contribution from other jointly liable parties, but Radiator Specialty is defunct, and
the Revised Liquidating Trust Agreement bars contribution claims to preserve its
limited assets for claimants. The upshot, according to United States Steel, is that the
liquidating trust unfairly shifts some of Radiator Specialty’s liability to other liable
tortfeasors. United States Steel contends that it would be more equitable for injured
claimants to accept a partial recovery than to require a partly liable party to pay more
than its culpable share of a monetary judgment.
24. 	But “shifting the risk of partial recovery from the injured party to the
tortfeasor” is a feature, not a bug, of joint and several liability. 	In re Joint E. & S.
Dist. Asbestos Litig., 1991 U.S. Dist. LEXIS 7527, at *78 (E.D.N.Y. May 16, 1991).
“Compensation of persons injured by wrongdoing is one of the generally accepted aims
of tort law.” Haarhuis v. Cheek, 255 N.C. App. 471, 480 (2017) (citation and quotation
marks omitted). Joint and several liability furthers that aim by allowing an injured
party to seek complete relief from any culpable party. 	See Crescent Univ. City
Venture, LLC v. AP Atl., Inc., 2019 NCBC LEXIS 46, at *76 (N.C. Super. Ct. Aug. 8,
2019). 	The underlying policy is “that it is better that the risk of an insolvent
co-defendant should fall on a partially guilty defendant than on a completely innocent
victim.” United States v. Cano-Flores, 796 F.3d 83, 95 (D.C. Cir. 2015).
25. 	A pro tanto release is consistent with these traditional principles. The Court
therefore overrules this aspect of United States Steel’s objection as well.
26. 	Looking beyond the liquidating trust, the Court concludes that all other
aspects 	of 	the 	proposed 	claims 	process 	are 	also 	sound. 	The 	Receiver’s

recommendation to exclude environmental remediation and cleanup costs makes
good sense. 	Other responsible parties and other assets (nearly $2 million in a
preexisting environmental trust) are available to handle those costs. 	Indeed, the
Department has no objection to the Receiver’s recommendation, as stated in the
Revised Liquidating Trust Agreement.
27. 	And finally, the Receiver’s recommendation to handle all other claims
directly through the receivership estate is reasonable. 	No party objects to his
suggested procedures, deadlines, and claim form (attached as exhibit C to the
motion). Nor does any party object to the proposal to reserve $750,000 in the estate
and to pay 40% of each allowed claim’s value. 	The decision to reserve $750,000 is
based on a reasoned assessment of anticipated claims. 	Further, the 40% partial
recovery is equivalent to the partial recovery that the liquidating trust guarantees to
tort claimants—thus putting all claimants on a level footing. 	The Court concludes
that these recommendations are fair.
28. 	For all these reasons, the Court concludes that the Receiver’s proposed
claims process is fair and that it is in the best interest of the receivership estate, the
creditors, and all interested parties.
III.
CONCLUSION
29. 	Accordingly, the Court, in the exercise of its discretion, ORDERS as follows:
a. 	The Receiver’s Motion to Approve Claims Resolution and Distribution
Process is GRANTED, and United States Steel Corporation’s objection
is OVERRULED;

b. 	The Court APPROVES the terms of the Revised Liquidating Trust
Agreement found at ECF No. 54.2. and Tort Claim Form attached as
exhibit B to the motion, and ADOPTS the Receiver’s recommended
claims process for resolving tort claims;
c. 	Not later than 30 days after the date this Order becomes final and
nonappealable (“Effective Date”), Michael L. Martinez—both as grantor
and initial trustee (“Liquidating Trustee”)—shall execute the Revised
Liquidating Trust Agreement;
d. 	Within 14 days of the Effective Date, the Receiver shall file articles of
dissolution for Radiator Specialty and wind up its operations under
N.C.G.S. §§ 55-14-07 and 57D-6-11, including providing public notice of
the 	dissolutions. 	Such 	notice 	shall 	disclose 	the 	existence 	of 	the
liquidating trust as the means for resolving present and future tort
claims;
e. 	Tort claimants must submit claims against the liquidating trust in the
manner set forth in the Revised Liquidating Trust Agreement and Tort
Claim 	Form. 	The 	Liquidating 	Trustee 	shall 	be 	responsible 	for
administering the claims process, including making distributions to
holders of allowed claims;
f. 	The Court ADOPTS the Receiver’s recommended claims process for
resolving environmental claims;

g. 	The Court ADOPTS the Receiver’s recommended claims process for
resolving miscellaneous claims and APPROVES the Miscellaneous
Claim Form attached as exhibit C to the motion;
h. Within 14 days of the Effective Date, the Receiver shall send the
Miscellaneous Claim Form, a copy of this Order, and notice of the right
to submit a claim against the receivership estate to all known holders of
miscellaneous claims;
i. 	Holders 	of 	miscellaneous 	claims 	must 	submit 	claims 	against 	the
receivership estate not later than 60 days after the Receiver sends notice
of the right to submit claims (“Claims Submission Deadline”) and in the
manner set forth in the Miscellaneous Claim Form;
j. 	Within 60 days of any Claims Submission Deadline, the Receiver shall
file a report recommending the allowance or disallowance in whole or in
part 	of 	any 	miscellaneous 	claim 	subject 	to 	the 	preceding 	Claims
Submission Deadline (“Claims Report”). 	The Court’s determination of
any miscellaneous claim subject to the Claims Report shall govern that
claim’s allowance and any distribution to be made on such claim from the
receivership property;
k. Distributions of receivership property on each allowed miscellaneous
claim 	shall 	be 	made 	at 	40% 	of 	the 	allowed 	amount. 	But 	if 	the
receivership 	estate 	lacks 	sufficient 	funds 	to 	cover 	receivership
administrative costs and pay all allowed claims at 40% of the allowed

amount, 	then 	the 	Receiver 	is 	authorized 	to 	reduce 	each 	holder’s
distribution by their pro rata share of the receivership administrative
costs;
l. 	The Court shall retain exclusive jurisdiction to determine all claims,
controversies, suits, and disputes that may arise in connection with the
interpretation, enforcement, or consummation of the motion, these claim
procedures, or in connection with the obligations of the Receiver or
Liquidating Trustee, and to enter such orders as may be necessary or
appropriate to implement any distributions to holders of allowed claims;
to 	consider 	any 	modification, 	remedy 	any 	defect, 	or 	reconcile 	any
inconsistency in these claims procedures; and to issue any order in aid of
execution of these claims procedures.
SO ORDERED, this the 1st day of May, 2024.
/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases