The Demise of Kelly-Moore: Asbestos Lawsuits Lead to Paint Giant’s Closure

The Demise of Kelly-Moore: Asbestos Lawsuits Lead to Paint Giant’s Closure

Kelly-Moore, an American paint company with roots tracing back to 1946, has shut down due to the financial burden of asbestos-related lawsuits. With over $600 million spent on legal liabilities and an additional $170 million estimated for future litigation, the company is unable to continue operations.

Founded in San Carlos, California, Kelly-Moore expanded its footprint over the decades, establishing a network of stores in California, Nevada, Oklahoma, and Texas. The business thrived on serving trade clients, particularly contractors, and by 2022, its annual revenues were estimated at $400 million after being acquired by the private equity firm, Flacks Group.

From 1960 to 1978, Kelly-Moore incorporated asbestos into its paints, cements, texturizers, and drywall fillers. Asbestos was once highly regarded for its fire-resistant qualities and strength, leading to its widespread use in various industries, including the paint industry. However, as its detrimental health effects became more apparent, its use significantly declined. Exposure to asbestos fibers can lead to severe health issues, including mesothelioma, lung cancer, and asbestosis.

As early as the late 1990s, legal claims began to flood in against Kelly-Moore, initiated by individuals afflicted with asbestos-related illnesses. Painters, laborers, homeowners, and even company employees found themselves facing the devastating consequences of asbestos exposure. The lawsuits, numbering over 48,000, sought restitution because of the company’s negligence.

With over $600 million spent on legal settlements and an additional $170 million earmarked for impending litigation, the financial toll was unbearable. Despite ceasing the use of asbestos in 1981, the damage was irreparable. The company continued to face lawsuits, each one a reminder of the enduring impact of its past actions. Even after facing years of asbestos-related liabilities, Kelly-Moore never declared bankruptcy and does not possess an asbestos trust.

The company has chosen not to pursue Chapter 11 bankruptcy and has elected to satisfy existing customer orders utilizing the inventory located at its distribution facility in Union City, California. All other sites, including the manufacturing plant in Hurst, Texas, and leased retail stores, will be shut down permanently with immediate effect.

The closure of Kelly-Moore reminds us of the devastating effects of asbestos. The toll extends beyond mere financial challenges; it encompasses the human cost, with lives shattered and livelihoods lost in its wake. The furlough of 700 employees and the closing of 157 retail locations serve as an ending to the once-thriving enterprise. Kelly-Moore employees will receive full compensation for regular hours worked, and management is pursuing receivables to ensure all accrued benefits, including paid time off, are paid in full.

The demise of Kelly-Moore brings to light again the need for regulations and corporate accountability in the realm of workplace safety. It is a call for vigilance, urging companies to prioritize the well-being of their employees and consumers above all else.

If you or a loved one has been diagnosed with an asbestos-related illness, you could be entitled to compensation. Call 412-471-3980 or fill out our contact form to speak to a member of our team.

Sources:
Daniels Melissa “As paint brand Kelly-Moore ends operations, competitors try to swoop in” Modern Retail (January 13, 2024) [Link]
“Kelly-Moore Paints Announces Plan for Orderly, Out-of-Court Wind-Down of Company Operations” Business Wire (January 12, 2024) [Link]
Umanzor Joel “Kelly-Moore Paints To Go Out of Business, Close 5 Stores in San Francisco” The San Francisco Standard (January 13, 2024) [Link]
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