Commitments and Contingencies

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies

15. Commitments and Contingencies

During the nine months ended September 30, 2011, the Company entered into five operating leases for manufacturing equipment at its North American automotive facility included in the Thermal/Acoustical segment.  The estimated future minimum payments for this equipment are $3.9 million through the first quarter of 2018, or annual payments of approximately $0.6 million to $0.7 million.

By letter dated September 14, 2010, the Company provided notice to the Pension Benefit Guaranty Corporation (the “PBGC”) pursuant to Section 4063(a) of ERISA of the occurrence of a Section 4062(e) event with respect to a Lydall pension plan (the “Plan”) and requested that the PBGC determine its liability, if any, as a result of the Section 4062(e) event. The Section 4062(e) event relates to the substantial cessation by the Company in the second quarter of 2009 of its operations at its St. Johnsbury, Vermont facility and the resulting separation from employment of greater than 20% of the active participants in a Lydall pension plan.  Under Section 4062(e), the PBGC has the authority to require additional contributions to the Plan by the Company or to require the Company to post a bond or fund an escrow in order to secure obligations under the Plan attributable to the separation from employment of the affected employees.  On October 20, 2011, the Company reached an agreement with the PBGC for the funding by the Company of $0.9 million in cash to the Plan in excess of the required minimum funding contributions, which was contributed to the plan on October 24, 2011. This settlement did not have any impact on the Company’s results of operations.

From time-to-time the Company is subject to legal proceedings, claims, investigations and inquiries that arise in the ordinary course of business such as, but not limited to, patent, employment, personal injury, commercial and environmental matters.  Although there can be no assurance, the Company is not aware of any matters pending that are expected to be material with respect to the Company’s business, results of operations or cash flows.