Lloyd’s run-off vehicle, Equitas and Halliburton Company announced that they have reached a comprehensive agreement to settle Halliburton’s insurance claims against certain Underwriters at Lloyd’s for $575 million.
Halliburton said in a statement that “The settlement will resolve all asbestos-related claims made against Lloyd’s Underwriters by Halliburton and by each of Halliburton’s subsidiary and affiliated companies, including DII Industries, Kellogg Brown & Root and others that have filed chapter 11 bankruptcy proceedings as part of Halliburton’s global asbestos settlement. Halliburton’s claims against its London Market Company Insurers are not affected by this settlement.”
As the statement indicates, the plan still requires the approval of the bankruptcy courts as far as Halliburton’s subsidiaries in Chapter 11 are concerned. Unless the federal government steps in with legislation to settle asbestos claims (which appears unlikely), Equitas will initially pay $500 million when the settlement is approved. It will make an additional $75 million payment on January 5, 2005 or “at the same time as DII and other Halliburton affiliates will be obligated to pay asbestos claimants as part of Halliburton’s global asbestos settlement,” the bulletin indicated.
Simon Wright, Equitas’ Head of Asbestos Pollution and Health Hazard Claims, commented: “The settlement with Halliburton caps what is, by far, the largest single direct liability faced by Equitas. This major settlement is yet another example of Equitas’ commitment to resolving claims with all Lloyd’s policyholders as expeditiously as is reasonably possible and at fair values. Both we and Halliburton will continue to review the underlying asbestos claims that will be paid on confirmation of the bankruptcy plan as part of Halliburton’s global asbestos settlement.”
With completion of this settlement, Equitas has now resolved 5 of its 10 largest asbestos exposures. Glenn Brace, Equitas’ Claims Director, stated: “We were able to settle them after tough negotiations in which both sides looked very carefully at their assets and liabilities before settlement was reached. We have had some of the most sophisticated businesses in the world on the other side of the negotiation table. We are willing to have similar discussions with any of our policyholders, large or small, so long as they are sincerely interested in reaching a realistic settlement.”
Dave Lesar, Halliburton’s Chairman, President and CEO noted that the “settlement demonstrates the strength and scope of our insurance asset. Even with this settlement we do not foresee a reduction in our insurance receivable. We are very pleased that this portion of our insurance asset has recognized the potential risk of our claims and moved in a responsible manner to resolve them. We hope other insurers will respond in a similar manner, so that those who will benefit from the Trust will be able to receive payment and move forward with their lives.”
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