Firm gets OK to set up asbestos-claims trust

July 08, 2006|By STACEY HIRSH | STACEY HIRSH,SUN REPORTER

Porter Hayden Co., which sold and installed asbestos insulation, was given final approval yesterday to create a trust to pay claims from tens of thousands of people who said they were sickened by asbestos products, the Baltimore company's law firm said yesterday.

The asbestos trust is part of a reorganization plan that essentially says the trust will own Porter Hayden, which has been in Chapter 11 bankruptcy protection since 2002. Numerous bankruptcy cases involving companies involved in asbestos products have been settled in similar fashion. Asbestos was widely used in insulation and other construction materials until the 1970s, when it was linked to a number of fatal diseases in people who were exposed to it over long periods of time.

"There is money, more available now than there otherwise would have been, that will continue to come in, and there's protection for parties that act in good faith," said Paul M. Nussbaum, an attorney from Whiteford, Taylor & Preston LLP in Baltimore who represents Porter Hayden.

Creation of the trust was approved yesterday by Judge Andre M. Davis of the U.S. District Court in Baltimore and this week by Judge E. Stephen Derby of the U.S. Bankruptcy Court for Maryland. Funds will be used to pay existing and future asbestos claimants.

Phillip Milch of Campbell & Levine LLC in Pittsburgh, who represented unsecured creditors in the negotiations, could not be reached for comment. Edwin Harron of Young, Conaway, Stargatt & Taylor LLC in Wilmington, Del., which represented the interests of future asbestos claimants, declined to comment.

The trust will take on Porter Hayden's injury liabilities. It will manage the company's assets and allocate those assets to asbestos claimants. Almost 60,000 known plaintiffs have asbestos claims against Porter Hayden, Nussbaum said. Claims against the company had been estimated at $550 million, according to the trade newspaper, the Daily Deal.

The reorganization plan also protects insurance companies that reach a settlement with the trust, saying existing or future claimants can only recover payments from the trust and cannot sue Porter Hayden or the insurance companies it has settled with.

Nussbaum said the trust creates a comprehensive mechanism to pay claims and insures protection of future claimants' interest. It also encourages insurance companies to settle their asbestos disputes, he said.

"We're very pleased with the outcome," Nussbaum said, " and I believe all constituents were."

stacey.hirsh@baltsun.com

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.