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Asbestos -- Is This the Beginning of the End?
Bloomberg.com -- 6/26/03
A U.S. Senate committee agreed to add as much as $45 billion to a compensation fund for asbestos- exposure victims. The proposed legislation is designed to stem lawsuits that have bankrupted more than 60 companies since 1982.
The Senate Judiciary Committee voted to boost the fund to as much as $153 billion in contributions by asbestos manufacturers and insurers and establish a mechanism to extend the fund's life if it runs out of cash. The panel has yet to agree on how much the fund would pay individual workers who suffer from asbestos-related diseases such as cancer.
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The panel moved a step closer to compromise today when it approved the amendment by Senator Dianne Feinstein, a California Democrat, by a voice vote that boosted funding to the trust and created a mechanism to extend the fund's life if it runs out of cash after 27 years.
The trust would be financed by manufacturers such as USG Corp. and Owens Illinois Inc., which made products that used asbestos, and insurers including Travelers Property Casualty Corp., Ace Ltd. and Hartford Financial Services Group Inc., which have reserved billions of dollars to pay asbestos claims. The compromise leaves the amounts of compensation to individual investors as the biggest remaining stumbling block.
`Can It Happen?'
``I think it will happen,'' Nick Redfield, who helps manage about $150 million at Bank One Investment Advisors, said of the asbestos legislation. ``The big question is: Can they make it happen this year? Companies that stand to gain most are the ones just entering or teetering on bankruptcy that would start building reserves for settlements.''
Redfield said companies that would be helped by the legislation include Owens Illinois, Georgia-Pacific Corp. and W.R. Grace & Co.
The legislation would end the flood of lawsuits against companies that used asbestos in their products and cap the costs of settling claims. (emphasis supplied)
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Julie Rochman, a spokeswoman for the American Insurance Association, said the Feinstein amendment raises hopes for a compromise that can pass the full Senate.
``Two days ago we saw bipartisan agreement on medical criteria,'' Rochman said. ``Today we're seeing bipartisan agreement on short-term and long-term funding shortages. The one big piece that is outstanding is the amount of money that sick people who present themselves to the trust fund will receive. Those things move in tandem.
``If we can resolve that third piece to everybody's satisfaction, this bill will move forward.''