21 January 2003
Honeywell outs asbestos albatross
New York - Honeywell said this past Friday that it has reached agreement with 90% of those who made asbestos claims against its former unit, the North American Refractories Company (NARCO). This would be a major step in putting its asbestos uncertainties behind it.
The agreement will allow Honeywell to set up a trust to pay asbestos-related settlements for its former brick and cement making entity and to cap future payments.
According to Reuters, the trust is subject to approval by the judge overseeing the Chapter 11 bankruptcy of NARCO, which was sold by Honeywell in 1986.
Honeywell, based in Morris Township, New Jersey, said in December it would set aside $900 million for NARCO asbestos liabilities.
Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases.
An avalanche of asbestos personal injury claims in the late 1980s and '90s has cost more than $54 billion in settlements so far and driven more than 50 U.S. companies into bankruptcy.
A small portion of heat-resistant bricks and cement made by NARCO contained asbestos, resulting in thousands of claims partially indemnified by Honeywell.
NARCO, which was owned by Honeywell from 1979 to 1986, filed for Chapter 11 bankruptcy protection in January 2002. There were about 116,000 asbestos-related claims pending prior to the bankruptcy filing.
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