Sotera Health settles ethylene oxide litigation in Illinois for $408M

Sotera Health announced that its subsidiaries have reached agreements to settle the more than 870 ethylene oxide cases pending against Sterigenics in the Circuit Court of Cook County, Illinois, and US District Court for the Northern District of Illinois. Under the terms of the agreements, Sterigenics will pay $408M to settle the claims, subject to substantially all of the plaintiffs providing opt-in consents to their individual settlement allocations and dismissing their claims with prejudice. The administration and completion of the settlement agreements is expected to require up to 90 – 120 days. Sterigenics and Sotera Health LLC deny any liability and the agreements explicitly provide that the settlements are not to be construed as an admission of any liability or that emissions from the Willowbrook facilities ever posed any safety hazard to the surrounding communities. Sterigenics will fund an escrow account to pay the settlement by May 1, 2023. Final payment to a qualified settlement fund will be made from the escrow account within 30 days of the final order on appeal affirming court approval of the settlement as a good-faith settlement or, if there is no appeal, within 7 days of the expiration of the deadline to file an appeal from the court’s approval. The company will pursue incremental debt financing in the first half of 2023 to fund a significant portion of the settlement payment. The company will record a charge for the $408M settlement for the year ended 2022.