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NATIONAL GYPSUM RECEIVES FAVORABLE COURT RULING REGARDING ASBESTOS-RELATED BODILY INJURY INSURANCE COVERAGE

 DALLAS, Texas, Dec. 23 /PRNewswire/ -- The United States District Court for the Southern District of New York yesterday issued a ruling regarding a number of issues related to National Gypsum's insurance coverage litigation concerning asbestos bodily injury claims. The decision involves nine of the Company's insurers and approximately $190 million face amount of insurance coverage. The litigation began in 1986 regarding insurance coverage for property damage cases. However, in 1991, National Gypsum amended its pleadings to assert claims for insurance coverage for asbestos disease claims against those of its insurance companies which had not signed the Wellington Agreement, which among other things, resolved insurance disputes between the Company and signatory carriers.
 In its Dec. 22 ruling, the Court found that with respect to these nine non-Wellington signatory insurers, the Company neither expected nor intended the occurrences of injuries from the sale of asbestos- containing products, and the Company had not obtained insurance for a "known loss" at the time it purchased any of its asbestos coverage and, consequently, the insurers could not deny coverage on those grounds. The Court also ruled that the Company's use of the Asbestos Claims Facility, established as part of the Asbestos Claims Facility, and its successor, the Center for Claims Resolution, as a means of resolving bodily injury cases was reasonable.
 Finally, regarding which policies are required to respond to certain claims, the Court ruled that with respect to claims for cancer, bodily injury, sickness or disease sufficient to trigger insurance coverage occurs throughout the time of exposure to asbestos ("Exposure Trigger"); with respect to claims for asbestosis and other non-malignant diseases, bodily injury, sickness or disease sufficient to trigger insurance coverage occurs from the time of first exposure to asbestos continually to the time of diagnosis, and probably thereafter ("Continuous Trigger"); and for insurance policies in effect from 1983 through 1985, an Exposure Trigger must be applied, regardless of the claimant's alleged disease.
 Approximately $48 million, face amount, of the Company's insurance is affected by the Court's ruling regarding policies in affect from 1983 to 1985. Because the Company ceased manufacturing the majority of its asbestos-related products by the mid- to late 1970's, the court's ruling, if upheld, might make it difficult to access certain of this coverage.
 Similarly, the Exposure Trigger applicable to cancer claims might tend to concentrate such claims on the older policies and make it more difficult to access some coverage in later years. The court's previous ruling of an "Installation Date Trigger" for completed construction claims would also concentrate those claims in approximately the same period, potentially compounding this result.
 At this time, the Company cannot fully assess the effects of the Dec. 22 Ruling. However, it is likely that some or all of the decisions made in the Dec. 22 Ruling will be appealed by the Company or by the affected insurers.
 The Dec. 22 Ruling does not affect coverage available to National Gypsum Company by insurers who are signatories of the Wellington Agreement, which represents approximately $190 million face amount of insurance as of Oct. 31, 1992. Additionally, as previously reported, the Company obtained a favorable jury verdict against Commercial Union Insurance Company in October 1992 which included a finding that that insurer was responsible for payment of bodily injury claims on the basis of a "continuous trigger." Commercial Union has filed motions for judgement notwithstanding the verdict and for a new trial, on which the Court has not yet ruled. Commercial Union, and its affiliates, issued excess general liability insurance policies to the Company during the period 1965 through 1976, with an aggregate face amount of approximately $100 million. The Company has also arrived at agreements to settle coverage with other non-signatory insurers aggregating approximately $105 million face amount of insurance. The Company believes that it presently has approximately $595 million face amount of historical insurance coverage for the satisfaction of asbestos-related cases.
 -0- 12/23/92
 /CONTACT: E.A. Porter, Vice President-Administration General Counsel and Secretary, 214-969-3450/


CO: National Gypsum Company ST: Texas IN: CST SU:

SB-MM -- CH006 -- 9686 12/23/92 16:10 EST
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Date:Dec 23, 1992
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