Key Asbestos Settlement Plan Up in Air, Threatening Manville Case
NEW YORK (AP) _ Attempts to overhaul the troubled Manville trust to compensate asbestos disease victims have hit roadblocks because of a dispute in a separate case.
Negotiations to settle 65,000 asbestos claims against Eagle-Picher Industries Inc. were designed as a first step toward clearing a nationwide court backlog.
But lawyers for asbestos disease victims are upset over a perceived pro- industry bent on the part of U.S. District Judge Jack B. Weinstein, who is seeking to resolve the asbestos litigation crisis.
In an apparent effort to speed negotiations and placate plaintiffs lawyers, Weinstein on Monday approved a request by Eagle-Picher to pay asbestos victims who already have settled with the company.
Weinstein earlier had halted all payments by the Cincinnati-based maker of industrial products and auto parts for one month during settlement negotiations that would create an independent compensation fund and free the company of future liability payments.
″What they’re looking for is to cut off their exposure in return for a total payment, ... which the plaintiffs find acceptable,″ said Peter Angelos, a Baltimore plaintiffs lawyer appointed by Weinstein to negotiate with Eagle- Picher.
But other plaintiffs lawyers want victims to receive a majority stake in Eagle-Picher stock. They also are angry at Weinstein for making orders that would reduce legal fees and delay payments by the company to victims.
In apparent response, the lawyers threatened to break off talks on restructuring the Manville trust, which has 130,000 pending claims, the most in the nation.
Manville Corp. turned over a majority equity stake to an independent trust set up to resolve present and future asbestos claims. Manville emerged from Chapter 11 bankruptcy protection in 1988.
But that trust ran out of money to meet its payments earlier this year. Manville recently agreed to inject up to $520 million over seven years into the fund.
Negotiations with plaintiffs lawyers in the Manville case are seeking a scheme for paying victims with more serious diseases before those with lesser ailments. People involved in those talks said they were ″within hours″ of a settlement recently before plaintiffs lawyers backed out.
In the Eagle-Picher case, once an agreement is reached Weinstein is expected to approve a class-action lawsuit to apportion money to victims.
On Monday, eight plaintiffs lawyers asked Weinstein to be added to the settlement talks, further increasing tensions in the case. They said the court-appointed plaintiffs lawyers negotiating with Eagle-Picher were not representative of all victims.
″Any of the proposed settlements only prevents the victims from getting their full value and all the other creditors and the stockholders to continue business as usual,″ said Gene Locks, a Philadelphia plaintiffs lawyer.
Eagle-Picher earlier this month said it was close to a settlement. Individuals involved said the company would have set aside about $500 million over 20 years, but plaintiffs lawyers disputed that amount and said no agreement was reached.
Angelos said the proposal ″fell short of what they were capable of doing in the present and future in light of the resources available to them.″
Eagle-Picher has said it needs to settle all its claims or face insolvency by the end of 1992. Its liability stems from its production from 1934 to 1971 of an asbestos-containing cement used primarily in Navy yard boiler rooms. The company has said its liability from the product will exceed $1 billion.
The Eagle-Picher case is being closely watched as a possible model for dozens of other companies facing huge and growing liabilities because of asbestos products that caused lung cancer and other ailments. Several companies have entered bankruptcy proceedings because of their liabilities.
More than 90,000 asbestos lawsuits are pending in state and federal courts nationwide. Many victims were exposed decades ago to the insulation and heat resistance mineral but still await compensation.