According to an announcement by Halliburton Co., Chief Judge Judith Fitzgerald of the U.S. Bankruptcy Court, Western District of Pennsylvania has issued a temporary restraining order staying more than 200,000 pending asbestos claims against its subsidiary Dresser Industries, Inc. A full hearing on the request for a permanent stay is expected to be held within the next two weeks.
The ruling came in connection with the filing of a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code by Harbison-Walker Refractories Company. The company had assumed liability for a number of asbestos claims, which currently number around 132,000, when it was spun off from Dresser in 1992, ultimately becoming part of Austrian-based RHI AG. Halliburton indicated that the claims against Harbison-Walker are a majority of all asbestos related claims for which it may be ultimately responsible. These now total around 200,000.
The court “issued the order at the request of Harbison-Walker in the interest of protecting a significant asset of the bankrupt company, namely, the insurance held by Dresser Industries to cover the asbestos-related liabilities associated with Harbison-Walker. In its filing, Harbison-Walker informed the bankruptcy court that it, its parent RHI Refractories Holding Company, and Dresser Industries have agreed to work cooperatively in an attempt to utilize the special provisions of Sections 524(g) and 105 of the Bankruptcy Code to propose and have confirmed a plan of reorganization that will provide for distributions to the legitimate asbestos claimants,” said Halliburton’s announcement.
Although Harbison-Walker is not a direct halliburton subsidiary, Dresser is, and would have secondary liability on any unpaid asbestos claims. The two companies have been working together to try and arrange a settlement of the claims, and Dresser has granted Harbison-Walker access to its insurance policies to pay defense and settlement costs. The asbestos claims have been primarily responsible for a sharp drop in Halliburton’s share price earlier this year.
It has maintained that it has sufficient coverage, and that ultimately the claims will not severely affect it. The announcement noted that, “Even though Dresser Industries and Harbison-Walker have accessed that insurance for almost a decade since the spin-off, as of today’s bankruptcy filing by Harbison-Walker, the available products liability limits of that insurance is approximately $2.1 billion.”|”pa, court, stays, asbestos, claims, against, dresser, industries