A federal appeals court has overturned a $500 million settlement reached two years ago by The Travelers. Cos. Inc., a move that could open the company to potential new lawsuits.
Travelers said it is evaluating the ruling by the Second Circuit Court of Appeals which vacated a March 2006 decision of the U.S. District Court for the Southern District of New York. The 2006 settlement, which stemmed from the settlement of asbestos claims arising out of a suit by Denver, Co.-based Johns-Manville Corp., is subject to final court approval.
Travelers insured Manville, which filed for bankruptcy in 1982, while it made and sold asbestos from the 1940s to the 1970s.
Travelers said it will decide later whether to pursue further appeals in the settlement. The Saint Paul, Minn. -based insurer said it will not adjust the level of its asbestos reserves as a result of the Second Circuit’s decision, and it does not expect the decision to affect earnings.
In a statement, the company said it “would have preferred the finality afforded by the settlements and related injunction.” However, the company said, “the asbestos litigation environment has improved generally over the past several years. As a result, Travelers’ current outlook for the … litigation is more favorable than it was when Travelers entered into the settlements. If the Second Circuit’s decision becomes final, the settlements will become voided and Travelers intends to litigate the direct action cases vigorously.”
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