SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 2005
TRANSTECH INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Delaware 0-6512 22-1777533
(State or other (Commission (IRS. Employer
jurisdiction of File Number) Identification No.)
incorporation)
200 Centennial Ave., Piscataway, N.J. 08854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732)981-0777
(Former name or former address, if changed
since last report.) Not applicable
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[] Written communications pursuant to Rule 425 under the Securities Act.
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act.
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act.
Page 1 of 6 pages
Item 8.01. OTHER EVENTS.
Transtech Industries, Inc. ("Transtech"), together with its subsidiaries (the
"Company") has settled claims filed against the estates of four insolvent excess
insurance carriers that participated in excess insurance policies issued to the
Company during the late 1970s. The Company has received approximately $2.7
million with respect to these settled claims which represents approximately 62%
of the total amount of the settled claims against the four estates. The four
insolvent excess insurers were among the excess insurers named as defendants in
the suit brought by the Company in 1995 which sought reimbursement of past
remediation costs. A settlement was reached with the majority of the defendant
carriers in October 2001.
Background
As previously disclosed, during 1995 Transtech, and its wholly-owned
subsidiaries Kin-Buc, Inc. and Filcrest Realty, Inc. commenced suit in the
Superior Court of New Jersey, Middlesex County, entitled Transtech Industries,
Inc. et. al v. Certain Underwriters at Lloyds et al., Docket No. MSX-L-10827-95,
(the "Lloyds Suit") to obtain indemnification from its excess insurers who
provided coverage during the period 1965 through 1986 against costs incurred in
connection with the remediation of various sites in New Jersey. The defendant
insurers included various London and London Market insurance companies, First
State Insurance Company and International Insurance Company (collectively
referred to herein as "Defendant Insurers").
During June 1999, August 1999 and July 2000 the Company settled claims
against the First State Insurance Company, International Insurance Company and
the estate of an insolvent excess insurer, respectively. The settlements
provided payments to the Company totaling $302,500.
During October 2001 the Company entered into a settlement agreement with
certain Underwriters at Lloyd's, London, and certain London Market Insurance
Companies (the "London Market Insurers"). The settlement agreement was
consummated during February 2002, when London Market Insurers representing
approximately 84.7% of the value assigned to the subject policies paid their
allocated portion of the settlement amount. The Company received approximately
$13 million of settlement proceeds.
Some of the Defendant Insurers are insolvent. The estates of some of these
insolvent insurers have sufficient assets to make a partial contribution toward
claims filed by the Company.
All of the policies of excess insurance issued by the Defendant Insurers
cover Transtech, its present subsidiaries and former subsidiaries, some of which
Transtech no longer controls. They also cover certain companies presently or
formerly owned, controlled by or affiliated with Marvin H. Mahan, including
Inmar Associates, Inc. ("Inmar") and Tang Realty, Inc. ("Tang"), (collectively,
the "Mahan Interests"). Mr. Mahan is a former officer and director, and former
majority shareholder of Transtech.
In 1988, the Company, Inmar and Mr. Mahan were sued in a civil action in
the United States District Court for the District of New Jersey entitled AT&T
Technologies, Inc. et al. v. Transtech Industries, Inc. et al. v. Allstate
Insurance Company et al. (the "AT&T Suit") by a group of generators of waste
(the "AT&T Group") alleging, among other things, that the primary responsibility
for the clean-up and remediation of a site located in Carlstadt, New Jersey (the
"Carlstadt Site") rests with Transtech, Inmar and Mr. Mahan. Transtech is one
of the respondents to a September 1990 Administrative Order of U. S.
Environmental Protection Agency ("EPA") concerning the implementation of
environmental remediation measures at the Carlstadt Site. The site is owned by
Inmar and Transtech operated a solvents recovery plant at the site for
approximately five years ending in 1970.
In September 1995, the Court approved a settlement of the AT&T Suit.
Pursuant to such settlement, Transtech, Inmar and Mr. Mahan agreed to, among
other things, assign their Carlstadt Site related insurance claims against
excess insurers in exchange for a complete release from the AT&T Group's claims
arising from or on account of environmental contamination at the Carlstadt Site
and the AT&T Group's remediation of the same. Subsequent to executing the
September 1995 settlement, certain members of the AT&T Group conveyed their
rights under such settlement to other members of the AT&T Group (the
"Cooperating PRP Group").
During 1998, the Company and the Cooperating PRP Group agreed to cooperate
in the pursuit of their respective excess insurance claims, and therefore,
members of the Cooperating PRP Group were parties to the October 2001 settlement
with the London Market Insurers. The Company and the Cooperating PRP Group
agreed upon an allocation of the proceeds from the Lloyds Suit that provided the
Company 52% of the proceeds plus all of the interest earned on the settlement
proceeds while such proceeds are collected and held in escrow pending
consummation of the settlement. The Company also agreed to pursue non-settling
Defendant Insurers. The Cooperating PRP Group is to receive the first $250,000
that is collected from the non-settling Defendant Insurers, net of attorney fees
and expenses, and the Company shall retain the balance of amounts recovered.
In October 1998, the Company entered into an agreement with Mr. Mahan and
the Mahan Interests, which resolved certain disputes and assigned to the Company
all rights of the Mahan Interests, and certain other insured entities affiliated
with the Mahan Interests, as insureds and claimants under excess insurance
policies, including those policies that are the subject of the Lloyd's Suit.
Recent Event
The recent settlement pertains to claims filed against the estates of four
insolvent insurers: Kingscroft Insurance Company LTD, Walbrook Insurance Company
LTD, El Paso Insurance Company LTD and Mutual Reinsurance Company LTD. The four
insurers represented approximately 10% of the coverage provided under the
policies that were the subject of the Lloyd's Suit, as measured by the liability
apportioned to each of the Defendant Insurers at the time of the October 2001
settlement. Pursuant to their respective liquidation plans, the estates of the
four insurers make payments toward agreed claims based upon the amount of their
recovered assets and expenditures funded from such assets. The Company has
received approximately $2.7 million with respect to these settled claims which
represents approximately 62% of the total amount of the settled claims against
the four estates. The estates may elect, based upon their financial situation,
to make additional distributions toward agreed claims, however there are no
assurances that additional distributions will be paid. Additional claims
against the four estates have been barred in accordance with their liquidation
plans. One firm manages the administration of the four estates.
The Company continues to pursue claims against certain excess insurance
carriers that have not participated in any of the previous settlements. However,
the Company cannot predict the amount of the proceeds it may eventually receive
on account of such claims, if any.
Other Obligations
The Company recommends the reader review the Company's filings on Form 10-
KSB and Form 10-QSB for discussions of its financial obligations and contingent
liabilities. The Company faces significant short-term and long-term cash
requirements for (i) federal income taxes, (ii) post-closure costs associated
with sites of past operations, and (iii) funding its professional and
administrative costs.
The Company's past participation in the waste handling and disposal
industries subjects the Company to future events or changes in environmental
laws or regulations, which cannot be predicted at this time, that could result
in material increases in remediation and closure costs, and other potential
liabilities that may ultimately result in costs and liabilities in excess of its
available financial resources.
Press Release
The following is the text of the June 1, 2005 press release reporting the
settlement with the four insolvent excess insurance carriers.
TRANSTECH INDUSTRIES, INC. SETTLES CLAIMS
WITH CERTAIN EXCESS INSURANCE CARRIERS
PISCATAWAY, N.J., June 1, 2005 - Robert V. Silva, President and Chief
Executive Officer of Transtech Industries, Inc. (OTC BULLETIN BOARD:TRTI)
announced that the Company has settled claims filed against the estates of four
insolvent excess insurance carriers. The estates pay a percentage of the agreed
claim amount based upon projected assets and claims against such assets. The
Company has received approximately $2.7 million, representing approximately 62%
of the total amount of the claims against the four estates.
Further claims against the estates have been barred in accordance with
their liquidation plans, and there are no assurances that additional
distributions will be paid by the estates. One firm manages the administration
of the four estates.
The four insolvent excess insurers were among the excess insurers named as
defendants in the suit brought by the Company in 1995 which sought reimbursement
of past remediation costs. A settlement was reached with the majority of the
defendant carriers in October 2001.
A portion of the claim proceeds, $250,000 less related legal fees, will be
shared with a group of companies participating in the remediation of a site in
Carlstadt, New Jersey in accordance with a 1995 agreement, as amended, that
resolved litigation regarding the allocation of that site's remediation costs.
The claim proceeds will be subject to federal and state income taxes.
This news release may contain forward-looking statements as defined by
federal securities laws, that are based on current expectations and involve a
number of known and unknown risks, uncertainties and other factors that may
cause the actual results, levels of activity, performance or achievements to
differ materially from results expressed or implied by this press release. Such
risks and uncertainties include among others, the following: general economic
and business conditions; the ability of the Company to implement its business
strategy; the Company's ability to successfully identify new business
opportunities; changes in the industry; competition; the effect of regulatory
and legal proceedings. The forward-looking statements contained in this news
release speak only as of the date of the release; and the Company does not
undertake to revise those forward-looking statements to reflect events after the
date of this release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSTECH INDUSTRIES, INC.
(Registrant)
By: /s/ Andrew J. Mayer, Jr.
Andrew J. Mayer, Jr., Vice
President-Finance, Chief
Financial Officer and
Secretary
Dated: June 2, 2005