Halliburton announced this week that on Dec. 1, 2004, the Honorable Terrence McVerry of the United States District Court for the Western District of Pennsylvania signed an order that will resolve the company’s asbestos liability after a 30 day waiting period ending on Dec. 31, 2004.
Also, Halliburton is clarifying that the Third Circuit Court of Appeals
decision in the Combustion Engineering (CE) bankruptcy case has no impact on the bankruptcy of DII Industries, Kellogg Brown & Root and various other Halliburton subsidiaries (DII/KBR) for a number of significant reasons.
First, the primary reason is that the structure of the DII/KBR bankruptcy is significantly different than the structure utilized in the CE bankruptcy. Specifically, in the DII/KBR bankruptcy, unlike in CE (in relation to ABB Lummus Global and Basic Inc.), there are no asbestos-related liabilities being channeled to the trust that are not the liability of the Debtors or derivative of the Debtors’ liabilities.
Second, in the DII/KBR bankruptcy, unlike in CE, there is not even an allegation or a suggestion of disparity of treatment between the settled claimants and the unsettled claimants, including the
future claimants. Moreover, to the extent that there are insurance-related matters at issue, in the DII/KBR bankruptcy, unlike in the CE bankruptcy, there is no assignment of any insurance rights and the so-called “insurance neutrality” provision in the DII/KBR bankruptcy is more protective of insurers’ rights than is the insurance neutrality provision in CE.
Finally, unlike in CE, there are no objections at all in the DII/KBR bankruptcy as all matters with the insurers have been resolved and, unlike in CE, no asbestos claimants or law firms’ representing asbestos claimants objected to any portion of the DII/KBR Plan.
For all of the above reasons, the CE decision reportedly has no impact on the DII/KBR bankruptcy and Halliburton anticipates concluding the bankruptcy by year-end with funding of the trusts by the end of January 2005.
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