Carrier Global enters settlement and plan support agreement with KFI

Carrier Global (CARR) said it entered into a settlement and plan support agreement with KFI Wind-Down, the official committee of unsecured creditors appointed in KFI’s bankruptcy case. KFI was a separate legal entity of United Technologies that was spun-off with Carrier as part of Carrier’s separation from UTC in April 2020. As part of the proposed cettlements, Carrier will pay $615M in cash payable over five years, 100% of the net sale proceeds from the sale of KFI’s assets, which are estimated to be $115M, and contribute the right to recover proceeds under certain insurance policies. Carrier will be entitled to receive up to $2.4B of proceeds from such insurance policies and will contribute the first $125M of such proceeds as additional consideration in the direct claims settlements. Carrier will also be entitled to any earnouts payable to KFI under the KFI sale agreement. Carrier expects insurance payments it receives, in the aggregate, to cover the full amount paid by Carrier under the proposed settlements.