Federal-Mogul Corporation Files Chapter 11

Federal-Mogul Files Chapter 11 Petition to Resolve Asbestos Liability

SOUTHFIELD, Mich./Oct. 1 Auto-parts maker Federal-Mogul Corp. has filed a voluntary petition for Chapter 11 bankruptcy citing the overwhelming financial burden of asbestos claims as its reason for seeking protection.

The Detroit-based company filed the petition early Monday morning in the U.S. Bankruptcy Court for the District of Delaware, and becomes one of more than 30 companies involved in asbestos-related litigation to file for Chapter 11 since 1982.

In addition, Federal-Mogul subsidiaries in the United Kingdom have filed jointly for Chapter 11 in the High Court of Justice, Chancery Division in London, England.

"Today's action provides a means for effectively separating our company's acquired asbestos liabilities from our true operating potential," said Federal-Mogul Chairman and Chief Executive Officer Frank Macher in a statement released by the company. "We remain committed in our efforts to bring about a legislative solution for managing asbestos claims."

Federal-Mogul¹s liability stems from several late-1990s corporate acquisitions, including its purchase of T&N plc, a U.K.-based gasket maker it bought in 1998. In its most recent quarterly report filed with the

Securities and Exchange Commission, Federal-Mogul noted that T&N¹s U.K. and U.S. subsidiaries were named in nearly 200,000 pending asbestos personal injury complaints.

Federal-Mogul also acquired Fel-Pro Inc., a gasket and package products maker, in 1998. As of earlier this year, Fel-Pro was named in approximately 34,000 asbestos personal injury suits, according to SEC documents.

Just prior to filing for protection under Chapter 11 of the U.S. Bankruptcy Code, Federal-Mogul officials informed employees that it would no longer be able to make investments in Federal-Mogul common stock through their individual 401(k) plans. That decision, the company said, was the result of current market conditions and the "significantly depressed" and "highly volatile" value of its common stock, which had plunged significantly over the past year. It¹s currently trading at about 65 cents a share.

Company officials noted that the stock had struggled significantly in the month that followed USG Corp.¹s bankruptcy filing on June 25. Since then, U.S. Mineral Products Co. has filed for Chapter 11 protection in Delaware, citing similar concerns.

More on Federal-Mogul¹s bankruptcy filing, including a copy of the petition, will be available at www.harrismartin.com throughout the day and will be published in the November issue of HarrisMartin¹s COLUMNS-Asbestos, a national publication that covers asbestos litigation. For more information, or to obtain a copy of the petition by fax or e-mail, call (800) 496-4319.

HarrisMartin publishes COLUMNS-Asbestos and Special ReportSV40, and is the sponsor of the upcoming HarrisMartin¹s Asbestos Law & Medicine Conference, scheduled for Feb. 21-22, 2002, in Coronado, Calif. For more information, visit http://www.harrismartin.com/conferences.cfm

*** POSTED OCTOBER 1, 2001 ***