<SEC-DOCUMENT>0001193125-17-310938.txt : 20180104
<SEC-HEADER>0001193125-17-310938.hdr.sgml : 20180104
<ACCEPTANCE-DATETIME>20171016162502
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-17-310938
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20171016

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RPM INTERNATIONAL INC/DE/
		CENTRAL INDEX KEY:			0000110621
		STANDARD INDUSTRIAL CLASSIFICATION:	PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851]
		IRS NUMBER:				020642224
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258
		BUSINESS PHONE:		3302735090

	MAIL ADDRESS:	
		STREET 1:		2628 PEARL RD
		STREET 2:		P O BOX 777
		CITY:			MEDINA
		STATE:			OH
		ZIP:			44258

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RPM INTERNATIONAL INC/OH/
		DATE OF NAME CHANGE:	20021015

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RPM INC/OH/
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	REPUBLIC POWDERED METALS INC
		DATE OF NAME CHANGE:	19711027
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<TYPE>CORRESP
<SEQUENCE>1
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><I>[Calfee, Halter&nbsp;&amp; Griswold LLP Letterhead] </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;16, 2017 </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>VIA EDGAR </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation
Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">Attention:</TD>
<TD ALIGN="left" VALIGN="top">&nbsp;&nbsp;&nbsp;&nbsp;Mr. Terence O&#146;Brien </TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:10%; font-size:10pt; font-family:Times New Roman">Accounting Branch Chief </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:10%; font-size:10pt; font-family:Times New Roman">Office of Manufacturing and Construction </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:10%; font-size:10pt; font-family:Times New Roman"><B>Re:&nbsp;&nbsp;&nbsp;&nbsp;RPM International Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:15%; font-size:10pt; font-family:Times New Roman"><B>Form 10-K for the Year Ended May&nbsp;31, 2017 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:15%; font-size:10pt; font-family:Times New Roman"><B>Filed July&nbsp;24, 2017 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:15%; font-size:10pt; font-family:Times New Roman"><B>File No.&nbsp;1-14187 </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear
Mr.&nbsp;O&#146;Brien: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On behalf of RPM International Inc. (the &#147;Company&#148;), this letter responds to the comments the Company
received from the U.S. Securities and Exchange Commission, Division of Corporation Finance (the &#147;Commission&#148;), dated September&nbsp;18, 2017. For your convenience, we have repeated your comments in <I>italics</I>, and the Company&#146;s
responses are set forth immediately below the corresponding comment of the Commission. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Form 10-K for the year ended May&nbsp;31, 2017
</U></I></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Consolidated Statements of Cash Flows, page 33 </U></I></B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment #1: </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>Please address the
appropriateness of reflecting the $221,636 payments related to the 524(g) trust within financing activities in 2017 as well as reflecting the $450,000 payment to the 524(g) trust within investing activities in 2015. In this regard, we note these
payments are related to the Trust&#146;s assumption of all liability and responsibility for current and future asbestos personal injury claims. As such, it is unclear why these payments are not reflected as operating activities. Please advise.
</I></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October 16, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Response: </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As previously reported in the Company&#146;s Form 10-K for the fiscal year ended May&nbsp;31, 2015, prior to May&nbsp;31, 2010, Bondex
International, Inc. (&#147;Bondex&#148;) and its parent, Specialty Products Holding Company (&#147;SPHC&#148;), were defendants in various asbestos-related bodily injury lawsuits filed in various state courts. These cases generally sought
unspecified damages for asbestos-related diseases based on alleged exposures to asbestos-containing products. On May&nbsp;31, 2010, Bondex and SPHC filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware (the
&#147;Bankruptcy Court&#148;) to reorganize under chapter 11 of the Bankruptcy Code. Bondex and SPHC took this action in an effort to permanently and comprehensively resolve all pending and future asbestos-related liability claims associated with
Bondex and SPHC. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">SPHC is the Company&#146;s wholly owned subsidiary. In accordance with Accounting Standards Codification
(&#147;ASC&#148;) 810, when a subsidiary becomes subject to the control of a government court, administrator, or regulator, deconsolidation of that subsidiary is generally required. Accordingly, the Company deconsolidated SPHC and its subsidiaries
from its balance sheets as of May&nbsp;31, 2010, and eliminated SPHC&#146;s results from its consolidated results of operations beginning on that date. Subsequent to the chapter 11 reorganization proceedings, the Company accounted for its investment
in SPHC under the cost method. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Bankruptcy Plan (the &#147;Plan&#148;) was confirmed on December&nbsp;10, 2014 with an effective date
of December&nbsp;23, 2014. On the effective date, the Company&#146;s wholly-owned, previously deconsolidated subsidiaries, Bondex and SPHC, emerged from bankruptcy contemporaneously with the filing of the Notice of Entry of Order Confirming the
Bankruptcy Plan. As a result of this filing and as per the terms of the Plan, which required the Company to fund the Trust, the Company regained control of SPHC and its subsidiaries, and accordingly, accounted for the event as a business combination
on December&nbsp;23, 2014. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The funding of the Trust represented the total consideration transferred for the business combination, or
$772.6 million. This amount represented (i)&nbsp;the initial installment of $450.0 million and (ii)&nbsp;the $322.6 million present value of the future consideration payments pursuant to a promissory note bearing no interest and maturing on or
before the fourth anniversary of the effective date of the Plan (the &#147;Bankruptcy Note&#148;) as the total consideration transferred in the transaction. Accordingly, during its fiscal year ended May&nbsp;31, 2015, the Company accounted for the
initial cash payment of $450.0 million, less cash acquired, on the line item entitled, &#147;Acquisitions of businesses, net of cash acquired,&#148; in the Investing Activities section of its Consolidated Statements of Cash Flows in accordance with
ASC 230. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October 16, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
 3
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Plan, and Bankruptcy Note, provided for additional contributions to the Trust on
December&nbsp;23, 2016, 2017 and 2018. The payments of this additional consideration have been and will be accounted for in accordance with ASC 230-10-45-13(c), as follows: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>Payments at the time of purchase or soon before or after purchase to acquire property, plant and equipment and other productive assets,
including interest capitalized as part of the cost of those assets. Generally, only advance payments, the down payment, or other amounts paid at the time of purchase or <U>soon</U> before or after purchase of property, plant and equipment and other
productive assets are </I><B><I>investing </I></B><I>cash outflows. However, incurring directly related debt to the seller is a financing transaction (see paragraphs 230-10-45-14 through 45-15), and subsequent payments of principal on that debt thus
are </I><B><I>financing </I></B><I>cash outflows. (Emphasis added.) </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In determining what the term &#147;soon&#148; means, the Company notes that the
SEC staff has informally interpreted the term &#147;soon&#148; in this context to be a period of three months or less. This period is consistent with the period used for other ASC 230 considerations (e.g., the definition of Cash Equivalents in ASC
230-10-20, and the determination of net or gross presentation in ASC 230-10-45-9). Therefore, if a company purchases property, plant, and equipment and other productive assets, and the terms of the transaction require payment within three months of
the transaction date, then the payment would be classified as an investing outflow. If the payment terms of the transaction extend beyond three months, then any payment made after three months would be classified as a financing outflow. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Although the interpretive guidance above relates to the acquisition of property, plant, and equipment and other productive assets, we can
analogize to the acquisition of a business as the concepts are applicable under both interpretations, as in effect the entity is effectively financing the business combination with the seller. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Accordingly, during its fiscal year ended May&nbsp;31, 2017, the Company accounted for the first two of the three required cash payments on
the line item entitled, &#147;Payments for 524(g) trust,&#148; in the Financing Activities section of its Consolidated Statements of Cash Flows in accordance with ASC 230. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Note 2) Specialty Products Holding Corp. (SPHC), page 36</U> </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment #2: </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>With reference to ASC
460, please confirm that RPM International Inc. and their non-bankruptcy subsidiaries did not provide any guarantees related to the asbestos liability prior to the Bankruptcy Plan and emergence. Please also tell us why you did not have a probable
loss contingency prior to your subsidiaries&#146; emergence from bankruptcy. </I></P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October 16, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>
Specifically address why your obligation to fund the trust was not recognized prior to your subsidiaries&#146; emergence from bankruptcy. Refer to ASC 450. </I></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Response: </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company hereby confirms
that neither it nor any of its non-bankruptcy subsidiaries provided any guarantees related to the asbestos liability prior to the Plan and emergence. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As disclosed in the Company&#146;s Form 10-Q for the quarter ended November&nbsp;30, 2014, no amounts were accrued for the funding of the
Trust at November&nbsp;30, 2014, as the Plan was subject to the approval of the claimants, as well as the Bankruptcy Court and the U.S. District Court. The Company&#146;s requirement to fund the Trust became effective with the filing of the Notice
of Entry of Order Confirming the Bankruptcy Plan on December&nbsp;23, 2014. On that date, the Company regained control of SPHC and its subsidiaries, and accordingly, accounted for the event as a business combination. The Company hereby confirms that
no probable loss contingency existed at any time prior to the subsidiaries&#146; emergence from bankruptcy, and ultimately, no loss was recorded in connection with the reconsolidation. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>SEC Comment #3: </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>With reference to ASC
805-30-30-7, please tell us how you determined that the funding of the Trust represented the consideration transferred in the transaction. </I></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Response: </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As referenced above, the Plan
was confirmed on December&nbsp;10, 2014 with an effective date of December&nbsp;23, 2014. On that date, the Company&#146;s wholly-owned, previously deconsolidated subsidiaries, Bondex and SPHC, emerged from bankruptcy contemporaneously with the
filing of the Notice of Entry of Order Confirming the Bankruptcy Plan. As a result of this filing and as agreed upon in the Plan, the Company was required to fund the initial payment of $450.0 million to the Trust and provide the Bankruptcy Note.
Consistent with the guidance in ASC 805-30-30-7, the funding of the Trust represents consideration transferred to obtain control of the business upon emergence from bankruptcy. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October 16, 2017 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We hope that this letter is responsive to your comments. Should you require further
information or if there are any questions concerning the responses set forth above, please do not hesitate to contact me ((216) 622-8507; jjenkins@calfee.com) or, in my absence, Gregory S. Harvey ((216) 622-8253; gharvey@calfee.com). </P>
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<TD VALIGN="top">Very truly yours,</TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ John J. Jenkins</TD></TR>
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<TD VALIGN="bottom">John J. Jenkins</TD></TR>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Russell L. Gordon </TD></TR></TABLE>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Edward W. Moore </TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top">Thomas F. McKee </TD></TR></TABLE>
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