Mounting Asbestos Lawsuits Forces Kelly-Moore Paints to Close
After nearly 80 years in business Kelly-Moore Paints is closing all stores nationwide. Kelly-Moore decided to shut down after spending a total of $600 million on asbestos settlements, while still dealing with cases being filed. The lawsuits stem from asbestos used in cement and texture products that the company had eliminated decades ago.
Kelly-Moore has furloughed around 700 employees due to the closures. The shutdown affects 157 retail locations and facilities in California, Nevada, Oklahoma and Texas.
The company plans on fulfilling all orders that customers have already placed through its Union City, California, distribution facility. Kelly-Moore says neither chapter 11 bankruptcy nor in-court liquidation is an option.
“I could not be prouder of what our talented team accomplished under extremely challenging circumstances,” said Kelly-Moore CEO Charles Gassenheimer. “My deepest sympathy goes out to our loyal employees, customers, industry partners and the communities where we do business, who have supported Kelly-Moore throughout its long history.”
Kelly-Moore sold products containing asbestos for painting, cementing, texturizing and filling drywall between 1960 and 1978. Exposure to asbestos has links to mesothelioma, lung cancer and asbestosis. Over the past 30 years, plaintiffs have filed more than 48,000 lawsuits against Kelly-Moore seeking compensation for asbestos-related injuries.
“I’m extremely disappointed and saddened by this outcome, as the entire Kelly-Moore team made incredible efforts to continue innovating and serving the unique needs of professional painting contractors,” said Gassenheimer. “The ownership group’s commitment from day one was to fix the business if we could. Sadly, no matter how great the Kelly-Moore team, products and reputation for service, we simply couldn’t overcome the massive legal and financial burdens that have been weighing on the company for many years.”
Kelly-Moore Legal Disputes
In 2002, Kelly-Moore filed a $4.1 billion lawsuit against chemical company Union Carbide. Kelly-Moore claimed that Union Carbide didn’t inform them about asbestos dangers in its products for several years. Union Carbide claimed that Kelly-Moore was aware of the hazards of its products.
In 2004, the case went to trial in Texas. Kelly-Moore claimed that Union Carbide hid evidence connecting its products to asbestos-related hazards, but the court found Union Carbide not guilty. In 2005, Kelly-Moore wanted to retry the case, but the judge didn’t grant the motion.
Asbestos used in Kelly-Moore products has resulted in millions of dollars in verdicts and settlements over the past 20 years. According to a recent study commissioned by Kelly-Moore, estimated future asbestos liabilities could surpass $170 million.
Kelly-Moore’s History
Kelly-Moore Paints was founded in 1946 by William Moore and William Kelly. By 1952, Moore bought out Kelly but retained the name of the company. When Moore retired in 1984, Kelly-Moore had 80 stores across the country and had grossed more than $136 million.
For almost 20 years the company used asbestos as a thickener, filler and fire retardant in its Paco interior finishing and texture products. Those products contained 5% to 10% asbestos. Spackling and taping compounds made by Kelly-Moore also contained asbestos.
Pleuger Chemicals acquired Kelly-Moore in October 2022 and executed several strategies to improve the company’s grave financial position, but the plan wasn’t enough to save the company.