Printer Friendly

JUDGE APPOINTS EXPERT TO DETERMINE AMOUNT OF KEENE'S FUNDS; FIRST STEP TAKEN AS KEENE SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT

 NEW YORK, May 19 /PRNewswire/ -- U.S. District Judge Jack B. Weinstein today appointed a special master, Judge Marvin E. Frankel, to conduct the initial hearings on whether Keene Corporation (NASDAQ: KEEN) does, in fact, have claims too numerous to satisfy with its available funds, the company announced. This first, tentative step is necessary to determine if Keene has only limited funds available to resolve numerous asbestos-related claims against it. Once this question is resolved, it will permit all parties to allocate these remaining funds fairly by settlement among all those who may make claims against Keene.
 Keene filed the lawsuit on May 13 in an effort to fairly allocate, by settlement, Keene's remaining funds among all competing claimants, including people suing Keene for injuries said to be caused by asbestos, suits alleging property damage for use of asbestos-containing building products and other asbestos-related claims, while maintaining Keene's viability.
 Stuart Rickerson, Keene's general counsel, said, "Today's decision was an important first step towards the resolution of these claims. Once Special Master Frankel decides that Keene's assets are too limited to resolve all potential claims that might be brought against it, and how much Keene's total assets amount to, we can proceed with settlement negotiations." He added, "If successful, this settlement class action would end all asbestos-related litigation against Keene for all time, would maximize the amount of Keene's remaining assets that can go to sick claimants, would minimize transaction costs that drain the funds available, and would avoid yet another asbestos-related bankruptcy filing. The jobs of Keene's employees and some of the investment of its shareholders would also be preserved."
 This type of class action is a recognized procedure under federal law, but has never before been successfully used to maximize funds available for asbestos claimants. At least 17 U.S. companies involved in the asbestos litigation have already sought bankruptcy law protection so far, with a consequent loss of tens of thousands of jobs, millions of dollars of lost investment savings along with the delay and uncertainty on payment of current and future claims.
 Rickerson added that Keene was disappointed that Judge Weinstein did not also enter a temporary stay of the individual lawsuits at this time. "A stay would have assured that money is not drained from the funds Keene has available by those in the front of the line at the expense of those who are a little farther back." The only other solvent company to attempt to resolve its asbestos liability with this procedure (Eagle Picher in 1990) was forced to file bankruptcy before it could complete the process. "We don't want to repeat the mistakes of the past," Rickerson said.
 Keene is seeking this relief because more than 98,000 claims are pending against its assets (roughly $100 million) and new cases are still being filed at a rate of about 2,000 per month. "As a practical matter, Keene does not have enough money to continue to resolve all these claims, one at a time, on a haphazard, first-in, first-out basis," Rickerson said. "Resolving all asbestos-related claims, as permitted under this federal limited fund mandatory settlement class action procedure, is the best and most equitable alternative available for all claimants (now and in the future), as well as Keene's employees and its shareholders.
 "The experience in the other asbestos-related bankruptcy filings prove that the limited fund, mandatory settlement class action procedure would be preferable to bankruptcy for all concerned," said Rickerson. In bankruptcy, substantial transaction costs continue to drain assets, claimant compensation is severely delayed, reduced or cut off, workers lose their jobs, creditors lose money and shareholders' investments are wiped out. Under this class action approach, transaction costs will drop significantly, more money can be made available to claimants and creditors, jobs can be preserved and some small part of shareholder equity will be preserved.
 Keene is currently spending $1 million per week in settlements and defense costs in asbestos litigation. "We would prefer that this money be allocated to everyone, not just a handful of people who make a run on Keene's treasury," Rickerson observed. He called on judges and lawyers for claimants to allow the process before Judge Weinstein to take its course. "We hope judges will put trials Keene is involved in on hold temporarily, since any trial or combination of trials can significantly drain Keene's assets and might spell Keene's doom."
 Rickerson added that "the steps Keene is taking in this suit are consistent with Keene's long-standing commitment to provide fair compensation to claimants with asbestos-associated impairments. History shows that no company has done more than Keene," he added, "to make the largest possible amount of money available for people sick with asbestos-associated illnesses."
 Mr. Rickerson pointed to several examples:
 -- Keene's landmark insurance coverage case (Keene v. INA) made over $400 million available for Keene to pay claims and which, when followed by other courts in cases involving other companies, released billions of dollars of insurance coverage to pay the claims of hundreds of thousands of Americans with asbestos-associated conditions.
 -- Keene has also been pushing for fair asbestos compensation legislation in Congress, funded by the companies involved, for more than a decade.
 -- Keene has pushed for deferred trial dockets for those claimants who are not now sick, just worried they might become sick later, so that money will continue to be available to pay claims in the future and not deprive or delay compensation to sick claimants today.
 -- Keene has sought to eliminate further windfall awards of punitive damages, since those monies will be unavailable to pay future claims.
 -- Keene has asked courts to supervise attorneys' fees to make sure they are reasonable. One study reported that asbestos lawyers routinely make $1,000 to $5,000 per hour. Another reported that two lawyers last year charged fees equalling $1 million per day. Yet another report said that the lawyers involved in asbestos litigation still take 30 percent, 40 percent or even 50 percent of the recovery that is intended to compensate sick people.
 "Remember," Rickerson added, "Keene is involved in asbestos cases only because in 1968 it made a brief and unprofitable $8 million investment in a tiny company." A very small portion of that company's products contained very small amounts of asbestos. "Yet Keene has already paid out over $430 million in indemnity and legal fees and expenses. As this case goes forward, whatever the participants agree is a fair allocation of the remaining assets of Keene, the money that goes to the claimants will be on top of the money Keene already has paid, bringing the total close to one-half billion dollars."
 -0- 5/19/93
 /CONTACT: Stuart E. Rickerson, vice president-general counsel, 212-557-1900, ext. 16, or Rose Marshall or Pat Pellerin, 202-337-5990, all for Keene/
 (KEEN)


CO: Keene Corporation ST: New York IN: SU:

GK-PO -- NY059 -- 0338 05/19/93 13:33 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 19, 1993
Words:1147
Previous Article:NUVEEN REPORTS RECORD REVENUES, EARNINGS AT FIRST ANNUAL MEETING
Next Article:INTERVOICE PLATFORM TO PROVIDE NETWORK SERVICES TO PACTEL CELLULAR
Topics:


Related Articles
KEENE SHAREHOLDERS RATIFY SALE OF OPERATING COMPANY TO FUND GOAL OF FINDING ASBESTOS-LITIGATION SOLUTION
KEENE SUIT SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT; LIMITED FUND CLASS ACTION FILED IN NEW YORK
KEENE SUIT SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT; LIMITED FUND CLASS ACTION FILED IN NEW YORK
JUDGE ISSUES TEMPORARY RESTRAINING ORDER IN LIMITED FUND, MANDATORY SETTLEMENT CLASS-ACTION SUIT FILED BY KEENE
JUDGE ISSUES TEMPORARY RESTRAINING ORDER IN LIMITED FUND, MANDATORY SETTLEMENT CLASS-ACTION SUIT FILED BY KEENE
ASBESTOS CLAIMS AGAINST KEENE CORP. HALTED
JUDGE HALTS LAWSUITS AGAINST KEENE CORP.; KEENE LIMITED FUND CLASS ACTION SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT
JUDGE ISSUES TEMPORARY RESTRAINING ORDER IN KEENE BANKRUPTCY
KEENE SUES 27 LAW FIRMS TO RECOVER $400 MILLION
KEENE CORPORATION PLAN OF REORGANIZATION CONFIRMED

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters