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KEENE SUIT SEEKS TO PUT ASBESTOS LITIGATION BEHIND IT; LIMITED FUND CLASS ACTION FILED IN NEW YORK

 NEW YORK, May 13 /PRNewswire/ -- Keene Corporation (NASDAQ: KEEN) today filed a lawsuit in federal court in New York seeking a declaration that it has only limited funds available to resolve numerous asbestos- related claims against it, including claims that might be filed in the future. The purpose of the filing is 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 the viability of the company.
 Stuart Rickerson, Keene's general counsel, said that "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 another asbestos-related bankruptcy filing. The jobs of Keene's employees and some of the investment of its shareholders would also be preserved."
 The filing of this class action, a recognized procedure under federal law, was before Senior Judge Jack B. Weinstein today.
 Keene is seeking this equitable relief because more than 98,000 claims are currently pending against its total 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.
 As demonstrated by the Manville and the 16 other asbestos-related bankruptcy filings, this procedure is preferable to bankruptcy for all concerned. In bankruptcy, substantial transaction costs continue to drain assets, claimant compensation is severely 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. (KEEN 52-week trading range is $1.00 to 5/32. It closed yesterday unchanged at 3/16, or 18-3/4 cents per share.)
 Rickerson added that "the steps Keene is taking today are consistent with Keene's long-standing commitment to compensate claimants with asbestos-associated impairments fairly. 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." Rickerson pointed to Keene's landmark insurance coverage case (Keene v. INA) which 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. "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 $430 million in indemnity and legal fees and expenses. Whatever this case determines 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's already paid, bringing the total to close to one-half billion dollars."
 Keene's chairman, Glenn W. Bailey, described the move as "one designed to make the most money available for those sick people who deserve it." He urges widespread cooperation with Keene's program. "This is the only solution which will virtually eliminate legal fees and other transaction costs, thus delivering the money saved, along with a fair share of Keene's remaining funds, to those who deserve it, while preserving Keene as an ongoing business able to retain and create jobs."
 -0- 5/13/93
 /CONTACT: Stuart E. Rickerson, vice president-general counsel of Keene, 212-557-1900, ext. 16; or Rose Marshall or Pat Pellerin, 202-337-5990, for Keene/
 (KEEN)


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

GK-OS -- NY038 -- 8075 05/13/93 11:51 EDT
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Date:May 13, 1993
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