Asbestos payment plan overturned

December 05, 1992|By Bloomberg Business News

NEW YORK -- A federal appeals court overturned lat yesterday the compensation plan for the massive Johns-Manville Corp. settlement trust, which was created in 1988 to pay thousands of asbestos disease claimants.

"The settlement has been thrown out," said Leslie Fagan, of Paul, Weiss, Rifkind, Garrison & Wharton, who represents future claimants. "Now, the parties will have to sit down again, and see if some agreement can be reached, if at all."

Trust officials and the attorney for those who might have futureclaims on the money said they were disappointed in the ruling. The attorney for those with claims currently against the trust said the ruling will protect the rights of all those who may have claims outstanding.

While the ruling was considered significant in terms of asbestos litigation, it is not expected to affect the plaintiffs in the asbestos personal-injury trial that ended in August in Baltimore because Manville was not a defendant in that suit.

Manville, formerly known as Johns-Manville Corp., was the largest producer and supplier of asbestos and asbestos-containing products in the United States. The company filed for bankruptcy protection in 1982 after it was inundated by asbestos claims.

As part of its reorganization plan, Manville created a trust to settle claims, and endowed it with $909 million cash, bonds with an aggregate value of $1.8 billion, and about 80 percent of the reorganized company's stock. The company emerged from bankruptcy in 1988 as Manville Corp., and is now a forest products and fiberglass company.

By Nov. 1990, the trust had received more than 150,000 claims, about 50 percent more than anticipated, and was running out of funds to settle the claims.

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