Hatch Asbestos Bill Gets Halliburton Out of Jail Free!
Note: Connect the dots on this story of asbestos death, broken promises, stiffed widows, an attempted corporate bail out that will result in a huge economic windfall by the evildoers, and a big payday for Vice President Dick Cheney's former employer and beneficiary of Uncle Sam's largesse in Iraq, Halliburton. A quick summary
In late November, 2001, Harbison Walker Refractories (HW) agreed to settle an asbestos personal injury claim with my client, Tom Hazen, of San Clemente, California, for over $1 million. (see http://www.mesothel.com/pages/hazen.htm ). Tom, a CFO of a medical devices company, had worked his way through UCLA MBA school while toiling by day in the powerhouses of the notoriously dirty Kaiser Steel Mill in Fontana, where he worked with HW's asbestos refractory cement. Tom signed the HW release on his death bed -- he underwent the radical EPP with Dr. Sugarbaker but the tumor invaded his abdominal linings -- and he died 23 days later. A few months later, HW files chapter 11, and the court enters an injunction that protects Dresser from lawsuits. Harbison Walker had merged with Dresser Industries, which is a Division of Halliburton.
Hazen and other widows who had been stiffed by Dresser sued Dresser in Dallas, Texas on a breach of contract theory. For several months, Halliburton promised to honor the settlements entered into between HW/Dresser and the Hazens, among other meso victims. Halliburton entered into a global deal with asbestos victims all over the country to take Dresser and Kellogg Brown & Root into bankruptcy in exchange for which Halliburton would settle about 200,000 lawsuits for cash and stocks worth $4 billion. After forcing the Hazens to reprove their case, Halliburton's lawyers finally if not begrudgingly agreed to pay the Hazens, subject to various contingencies (such as obtaining approval for its pre-bankrupcty filing trust distribution plan and reorganization plan from 75% of all asbestos claimants).
Now, enter the Hatch Asbestos Trust Fund, which contains language that will void agreements like the one Halliburton reached and shift a far lower amount of their insurance covered debt into the proposed federal asbestos trust. Under the Hatch act, instead of $4 billion, HAL would according to the article below pay only $450 million over 27 years. That's about $8 million per year over 27 years instead of $4 billion in a lump sum now. And because the Hatch Act imposes a one size fits all $750,000 cap on damages for mesothelioma victims -- a number which must be reduced by insurance coverage for medical bills, disability, medicare and other prior compensation -- companies like Halliburton would wind up walking away from their debt to the Hazens. The Hazens would receive zero under the Hatch Bill.
Tom Hazen suffered horribly before dying from mesothelioma. His wife Sandy and his sons David and K.T. stood by him and witnessed the horror of his suffering and death. Harbison-Walker and Dresser Industries, subsidiaries of Halliburton, promised to compensate Tom's family for their loss. The Hatch Bill would release all three corporations from their promise and duty to compensate Tom's survivors.
Halliburton C.E.O. Cheney struck the deal by Halliburton to merge with Dresser, and thus assume its billions of dollars in asbestos liability. By all accounts, not a prescient move. Nobody would be more pleased to see the government bail out Halliburton than Dick Cheney.
Please see a letter I wrote to Dick Cheney's lawyers on September 12, 2002.
Please see a letter from my client Sandy Hazen to Senator Feinstein, protesting the asbestos defendant get out of jail free bill. Note that the LA Times reported on Halliburton's strategy to stiff the widows back on January 27, 2002.
The media is encouraged to connect the dots and investigate the reach of Halliburton's power in Washington, DC.
Asbestos Legislation May Help Halliburton
Friday June 6, 4:51 PM ET
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By Carolyn Koo
NEW YORK (Reuters) - Halliburton Co. (NYSEHAL - news) on Friday said it expects to delay the bankruptcies of two units until the third quarter, a move that could enable the company to pay less money than expected to settle asbestos lawsuits under a proposed U.S. Congressional bill.
The world's second-largest oilfield services company late last year agreed on a $4 billion cash-and-stock deal to settle 200,000 asbestos lawsuits.
The most important step in the settlement is the filing of the prepackaged bankruptcies of the company's Dresser Industries and Kellogg Brown & Root subsidiaries, which are expected to pay for much of the settlement.
The bankruptcy filings will shield Halliburton, once headed by Vice President Dick Cheney (news - web sites), from having to file for bankruptcy itself.
The company now expects to file for the bankruptcies in the third quarter. Houston-based Halliburton already delayed filing for the bankruptcies once this year, pushing them back to sometime in the second quarter from March.
The company said the delay in filing has occurred because it is taking longer than expected to complete the trust distribution procedures and the plan of reorganization.
Jim Wicklund, an analyst at Banc of America Securities, said the delay in the bankruptcy filings could benefit Halliburton by reducing the amount of money it needs to pay out to asbestos victims, to $450 million from $4 billion.
A reduced payout would result from U.S. Senator Orrin Hatch's efforts to pass asbestos legislation to set up a $108 billion trust fund to pay asbestos injury claims over the next 25 years to 30 years.
The legislation, intended to stop a flood of asbestos-related lawsuits that studies say could end up costing more than $200 billion, could very well scuttle existing settlements, like Halliburton's, that are still being negotiated.
The worst that could happen to Halliburton "if the Hatch bill doesn't pass is they settle.. They figure they're going to have to settle anyway and the stock's already reflecting that settlement," said Wicklund, who has a "buy" rating on Halliburton's shares and doesn't own any of its stock.
"It's advantageous to Halliburton under either scenario."
Indeed, the company in its statement underscored that it is still tracking legislative proposals for asbestos reform in Congress. In deciding whether to proceed with its asbestos settlement the company said it will take into account the current status of any legislative initiatives.
But as it stands now, Halliburton anticipates it will complete its ongoing review of asbestos claims in July.
So far, the company said it believes the documentation will provide an "acceptable basis" to proceed with the global settlement.
Shares of Halliburton rose 35 cents, or 1.5 percent, to close at $24.05 on the New York Stock Exchange (news - web sites).