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JUDGE HALTS LAWSUITS AGAINST KEENE CORP.; KEENE LIMITED FUND CLASS ACTION SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT

 NEW YORK, July 1 /PRNewswire/ -- U.S. District Judge Jack B. Weinstein today issued a sweeping injunction to halt all federal and state lawsuits and other claims against Keene Corporation (NASDAQ: KEEN) nationwide. This stay is designed to preserve Keene's assets and to permit the court, Keene and all current and potential claimants to attempt to allocate these remaining funds fairly by settlement among all those who may make claims against Keene. Judge Weinstein excepted only "trials actually underway and appeals."
 In a related decision, Judge Weinstein also adopted the report of Special Master Marvin E. Frankel in its entirety. Judge Frankel conducted hearings in June and concluded that Keene does, in fact, have claims too numerous to satisfy with its available funds. Judge Weinstein also today appointed a Special Master to supervise the settlement negotiations. He is David I. Shapiro, a lawyer with the Washington based law firm, Dickstein & Shapiro.
 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 claims, while maintaining the viability of the company. On June 18, 1993, Judge Weinstein entered an order stopping virtually all indemnity payments (court judgments and settlements) by Keene to prevent further drain on Keene's limited funds. He continued this stay today for the indefinite future. Only "asbestos claims involving extreme hardship and exigent health condition," on recommendation of the Special Master and approved by the court, are excepted.
 Stuart Rickerson, Keene's general counsel, said that "Today's decision is a significant step towards the resolution of these claims, and putting asbestos litigation behind Keene. The stay of the individual lawsuits will assure that money is not drained from the fund by those in the front of the line at the expense of those who are a little farther back." 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."
 Rickerson said, "Keene hopes that all parties will cooperate with Judge Weinstein until a final resolution of this class action can be achieved. Judges around the country can now defer the normal processing of cases to avoid unnecessary expenditure of judicial resources and unneeded spending of Keene's limited fund."
 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. The only other solvent company to attempt to resolve its asbestos-related liability with this procedure (Eagle-Picher in 1990) was forced to file bankruptcy before it could complete the process. At least 17 U.S. companies that were 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 delay and uncertainty on the payment of current and future claims. "We don't want to repeat the mistakes of the past,' Rickerson said. "We must learn from the past, avoid the known pitfalls, and work toward solutions."
 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 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 class action procedure is preferable to bankruptcy for all concerned," he added. 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 a small part of shareholder equity will be preserved.
 Rickerson added that "the steps Keene is taking today 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 vs. 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 claims of hundreds of thousands of Americans with asbestos-associated conditions.
 -- Keene has also been pushing for fair asbestos compensation legislation, funded by the companies involved, in Congress 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 deprived or delay sick claimants today.
 -- Keene has sought to eliminate further windfall awards of punitive damages, since those moneys will be unavailable to pay future claims.
 -- Keene has asked courts to supervise attorney's fees to make sure they are reasonable. One study reported that asbestos contingent fee lawyers routinely make $1000 to $5000 per hour. 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. In June, a fourth report showed that one lawyer made at least $226 million in fees in the last 12 months from settlements in asbestos lawsuits, or more than $2 million for each day of trial.
 In other related developments today, Judge Weinstein provisionally certified five subclasses of claims against Keene's funds and provisionally appointed class representatives for each of the conditional classes.
 "Remember, Rickerson added, "Keene is involved in asbestos cases only because in 1968 it made an 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 $447 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 Keene's total contribution to one-half billion dollars or more."
 -0- 7/1/93
 /CONTACT: Stuart E. Rickerson, vice president - general counsel, 212-557-1900, ext. 16, or Pat Pellerin, 202-337-5990, both of Keene/
 (KEEN)


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

MP-WB -- NY086 -- 7902 07/01/93 16:12 EDT
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