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 $1.6billion from insurers toward the settlement of its asbestos claimslitigation, if approved by a federal bankruptcy court.[@@]

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

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

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

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

The agreement would include the $575 million settlement withEquitas, the Lloyd's of London reinsurer set up to handle asbestosclaims, 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., asubsidiary of Hartford, Conn.-based The Hartford Financial ServicesGroup, sought to have the prepackaged Chapter 11 bankruptcyproceedings vacated. The companies claimed Halliburton was misusingthe proceedings.

Judge Judith K. Fitzgerald dismissed the insurer's request inFebruary.

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

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

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