Halliburton Settles Asbestos Claims With Insurers

By Mark E. Ruquet

NU Online News Service, May 11, 3:04 p.m. EDT?Halliburton said it would receive a total of $1.6 billion from insurers toward the settlement of its asbestos claims litigation, if approved by a federal bankruptcy court.[@@]

The Dallas-based provider of services to the petroleum and energy industry announced yesterday a proposed settlement of its claims to cover a proposed $2.78 billion trust fund settlement with litigants over asbestos and silica claims.

"I am pleased that we have reached these significant milestones toward resolving our asbestos liability," said Dave Lesar, chairman, president and chief executive officer of Halliburton, in a statement.

Mr. Lesar said the settlements, "if consummated, will resolve disputes between us and our carriers, forestall further appeals, and allow the bankruptcy proceedings to be completed expeditiously."

The suits were filed against DII Industries, Kellogg Brown & Root, and other subsidiaries of Halliburton. The companies are currently in Chapter 11 bankruptcy. The plan must be approved by the U.S. Bankruptcy Court for the Western District of Pennsylvania.

The agreement would include the $575 million settlement with Equitas, the Lloyd's of London reinsurer set up to handle asbestos claims, that was announced in January.

In December of last year, several insurers, led by ACE U.S.A., based in Philadelphia, and Hartford Accident and Indemnity Co., a subsidiary of Hartford, Conn.-based The Hartford Financial Services Group, sought to have the prepackaged Chapter 11 bankruptcy proceedings vacated. The companies claimed Halliburton was misusing the proceedings.

Judge Judith K. Fitzgerald dismissed the insurer's request in February.

Stephanie Eakins, a financial analyst with Weiss Ratings Inc., based in Palm Beach Gardens, Fla., said that the agreement is good for both sides. The money would go into a trust fund to pay claims and absolve the insurers of any future claims.

"Any program that can help give [carriers] certainty about what the ultimate value of claims will be can only be good for the insurance companies," Ms. Eakins observed.

She noted that the agreement is still subject to a number of conditions, including one that Congress does not pass a national asbestos litigation program by Jan. 5, 2005.

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Halliburton Settles Asbestos Claims With Insurers

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