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Halliburton Inches Closer to Finalized Asbestos Settlement

Sat August 07, 2004 - West Edition
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HOUSTON (AP) A federal judge in Pittsburgh has affirmed approval of Halliburton Co.’s $4.17 billion plan to settle asbestos- and silica-related health claims, putting the oil services conglomerate a step closer to leaving those liabilities in the past.

Earlier in July, Houston-based Halliburton won approval from U.S. Bankruptcy Judge Judith Fitzgerald for the settlement plan, which includes the emergence of several key subsidiaries from a pre-packaged Chapter 11 restructuring plan.

The company announced July 27 that U.S. District Judge Terrence F. McVerry, also in Pittsburgh, affirmed Fitzgerald’s order.

McVerry’s affirmation is among the final steps before the subsidiaries –– including engineering and construction unit KBR and DII Industries –– can emerge from bankruptcy.

Pending settlements with insurance companies still must be finalized before the company can fund a trust and pay claims in cash and stock to settle 400,000 asbestos and 21,000 silica claims as announced in December 2002. The company intends to pay $2.775 billion of the total settlement in cash.

If those insurance settlements are finalized and the reorganization plan becomes effective “in the near future,” Halliburton expects the trusts to be funded in the fourth quarter this year, the company said.

Halliburton inherited most of the claims five years ago when the company acquired Dresser Industries Inc. for $7.7 billion during Vice President Dick Cheney’s 1995-2000 tenure as chief executive. Cheney left the company in 2000 to be President Bush’s running mate.

The bankruptcy was filed in Pittsburgh because most of the asbestos claims were filed against a former Dresser subsidiary, Pittsburgh-based Harbison-Walker Refractories Co. That company filed for Chapter 11 bankruptcy in 2002.