Friday, February 4

Frivolous Asbestos Suits?

When the President mentioned that our Health Care would be better with the curbing of "Frivolous Asbestos Suits" - I have to admit to a "What the F---?" reaction.

From Reuters:

The president said the lawsuits were hurting victims of asbestos-related illness because bankruptcies by companies resulting from claims lacking merit were leaving those with valid claims nowhere to turn for compensation. The issue of asbestos lawsuits is a concern for Detroit's automobile companies, which have been sued by people who worked around brake parts with asbestos fibers.

Pardon me, but isn't the determination of whether there is a prima facie claim the job of a judge at a preliminary hearing? Oh wait, that must only refer to all the judges who don't "legislate from the bench", by doing their job of denying frivolous claims.

Why is the President making such an issue of this? Maybe it has nothing to do with keeping victims from being hurt- maybe it has more to do with Dick Cheney's pocket book.

Halliburton: Asbestos Cases Done
HOUSTON, Jan. 3, 2005

Halliburton Co.'s $4.17 billion settlement of thousands of asbestos claims has been finalized, the company announced Monday.

The Houston-based oil services conglomerate's construction and engineering subsidiary, KBR, and other subsidiaries that filed for bankruptcy protection in December 2003 as part of the settlement have emerged from Chapter 11.

The reorganization plan, which included a $2.775 billion cash payment with the rest in stock to settle 400,000 asbestos and 21,000 silica claims, received court approval in July last year and went into effect this past Friday, Dec. 31. Halliburton said the company anticipates funding trusts to pay the claims by the end of this month.

"The asbestos chapter in Halliburton's history is closed," said Dave Lesar, chairman and chief executive of Halliburton.

Halliburton inherited the claims when the company acquired Dresser Industries, Inc. for $7.7 billion in 1998, during Vice President Dick Cheney's 1995-2000 tenure as CEO. Most of the asbestos claims were filed against a former Dresser subsidiary, Pittsburgh-based Harbison-Walker Refractories Co.

Halliburton announced in September that KBR, formerly known as Kellogg, Brown & Root, may be sold or spun off if its stock performance fails to improve after the conclusion of the asbestos litigation. The unit's efforts to cut $80 million in costs include eliminating positions and re-examining project costs.

Halliburton and KBR have been criticized for multibillion-dollar contracts in Iraq and Kuwait to serve food, deliver fuel, handle mail and provide other services for U.S. troops. Several federal agencies are investigating allegations of overbilling and favoritism stemming from Cheney's past tenure as company head. Halliburton has consistently denied any wrongdoing.

You would think that proposing a legislative fix which will have a direct impact on the financies of a prominent member of the executive branch, since Dick Cheney is still receiving deferred payments from his time as CEO of Halliburton, would be a conflict of interest - wouldn't you?

Obviously not in the Bush Whitehouse.

(Technically, Cheney has insulated himself from a potential Halliburton bankruptcy by purchasing an insurance policy against his future payments from the company while he is vice president, however this policy has an escape clause that allows it not to pay if a Halliburton Bankruptcy is the result of "directly or indirectly" of changes in law or regulation)

1 comment:

Vyan said...
Halliburton Posts Loss of $201 Mln on Asbestos Costs (Update2)

Jan. 28 (Bloomberg) -- Halliburton Co., the world's largest oilfield-services company by revenue, said its fourth-quarter net loss narrowed as costs to settle asbestos claims declined and oilfield services profit rose.

The loss narrowed to $201 million, or 45 cents a share, from $947 million, or $2.17 a share, a year ago, the company said in a statement. Sales fell 5 percent to $5.2 billion as the company's KBR engineering and construction business, the biggest U.S. contractor in Iraq, got less revenue from the government.

Chief Executive David J. Lesar, 51, settled in the quarter $4.8 billion of asbestos-related health claims that were a legacy of acquisitions made by his predecessor, U.S. Vice President Dick Cheney. Profit from oilfield services rose 54 percent to $370 million on record sales, as oil demand prompted a surge in drilling.

``This is a sellers' market because the key resource is skilled people and we haven't been training people for the business in the past 25 years,'' Robert Goodof, an analyst for Loomis Sayles & Co., said before the results were announced. ``In a sellers' market, Halliburton is better able to pick and choose their business.'' Loomis Sayles manages $12 billion, including about 1.46 million Halliburton shares.

Halliburton, BJ Services Co. and other oilfield-services providers last year raised their rates for helping clients find and develop oil and gas deposits. The increases came as benchmark oil prices in New York soared to a record $55.67 a barrel and spurring more drilling and causing shortages of labor and equipment.

``Our customers are expected to continue to increase their spending,'' Lesar said in the statement.

KBR Results

Excluding one-time costs mostly related to the asbestos settlement, profit was $183 million, or 41 cents per share, Halliburton said. On that basis, the company was expected to earn 48 cents, the average estimate of 24 analysts surveyed by Thomson Financial.

KBR broke even as revenue declined and the business recorded costs of $22 million to separate the energy and chemicals unit from the government-contracting unit. Lesar said in September that KBR may be sold or spun off to shareholders because it is dragging down profit. At the time, KBR announced firing of more than half of its 94 vice presidents.

Profit on Iraq-related work was $13 million, on $1.7 billion in revenue, Halliburton said.

The company released its results before exchanges opened. Halliburton shares rose 77 cents to a three-year high of $43.51 in New York Stock Exchange composite trading yesterday. Halliburton shares have gained 59 percent since August, helped by settlement of asbestos claims.

A U.S. District Court order ended the company's asbestos liability Dec. 31 after Halliburton and its insurers agreed to create a $4.8 billion trust fund by Jan. 31.

The company's higher share price raised the cost of the stock that is going to the fund, contributing to the loss reported today. In the year-earlier period, Halliburton set aside $1.1 billion to settle asbestos claims.

(Halliburton executives will discuss fourth-quarter results in a conference call at 10 a.m. New York time, accessible at (1) (719) 457-2728 or at .)

To contact the reporter on this story:
Jim Polson in New York

To contact the editor responsible for this story:
Robert Dieterich at

Last Updated: January 28, 2005 08:33 EST