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NEW YORK (Bloomberg)—Pfizer Inc. and its bankrupt Quigley Co. unit are close to a settlement with a group of alleged asbestos victims as the companies said the drugmaker may contribute hundreds of millions more to cover asbestos claims.
Edward Weisfelner, an attorney for the ad hoc committee of asbestos claimants in Quigley's bankruptcy, told U.S. Bankruptcy Judge Stuart M. Bernstein in Manhattan Thursday that the details couldn't yet be disclosed and the deal may take another 10 to 14 days to complete. Quigley, which made heat shields for the steel industry, was bought by Pfizer in 1968 and filed for bankruptcy in 2004.
“The parties are dangerously close to a resolution,” Mr. Weisfelner said. Judge Bernstein adjourned a hearing on Thursday's motion to dismiss the case in light of the settlement talks.
While the bankruptcy has been pending, creditors with alleged asbestos-related health problems have been unable to sue New York-based Pfizer and many have died, lawyers for the U.S. Trustee said in their request to dismiss the case. The U.S. Trustee is an arm of the Justice Department that monitors bankruptcy cases.
In September, Judge Bernstein denied Quigley permission to exit bankruptcy under a fourth proposed Chapter 11 plan, saying Pfizer had manipulated the bankruptcy process to benefit itself. The judge said the plan was filed in bad faith, citing testimony that asbestos claims against Quigley could total $4.45 billion over the next 42 years.
‘Hundreds of millions'
“Pfizer has committed to funding hundreds of millions of dollars more for an improved reorganization plan,” Quigley said in a motion to stay in bankruptcy.
Under the prior proposal, Pfizer had agreed to pay about $450 million to satisfy claims about products for which it allegedly had derivative liability.
Pfizer also said that it would give Quigley a viable business to reorganize. The ad hoc committee said the case should be dismissed in part because it has had no operation other than claims processing, funded by Pfizer.
“Quigley and Pfizer have promptly begun the process of considering and identifying further business opportunities for Quigley to undertake in excess of five years to satisfy the court's concerns regarding plan feasibility,” Pfizer said.
Pfizer reported in November a $701 million third-quarter charge for asbestos litigation for Quigley. The ad hoc committee, representing 43,100 individual asbestos claimants, asked the court to lift an injunction that has barred them from bringing claims against Pfizer since 2004.
Christopher Loder, a Pfizer spokesman, didn't immediately return a call for comment.
“Quigley and Pfizer have enjoyed an exceedingly valuable reprieve from defending asbestos claims in the tort system for that entire time, and accordingly have, at numerous junctures throughout this case, been content to let the bankruptcy proceedings languish,” the committee wrote in a court filing.
Pfizer challenged Bernstein’s statement that it should put into trust an amount of money equal to the purported value of present and future claims. The company said it hadn’t been allowed to show evidence that it didn’t have any liability from asbestos-containing products.
Lifting the injunction would deplete Quigley’s “most significant asset—rights under insurance policies it shares with Pfizer and the proceeds from various settlements of those policies,” Quigley wrote.
Under the prior proposed plan, all future claims for asbestos-related illness would be channeled to a trust, covering death and personal injury claims over Insulag, Panelag and Damit, asbestos-containing Quigley products for the steel industry made from World War II to the 1970s.
The plan barred future actions against Pfizer. Pfizer was a defendant in 280,343 of the 411,100 claims served against Quigley, Judge Bernstein noted in his ruling.
The case is In re Quigley Co., 04-15739, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Copyright 2011 Bloomberg