NEARLY THREE-QUARTERS of a million asbestos claims have been filed in US state and federal courts. About 100,000 were filed in 2003 alone, though as many as half of all new claimants have yet to suffer significant illness as a result of exposure to asbestos.
Lobbying group Asbestos Alliance says claims and costs have bankrupted more than 70 US companies. The total costs of settlements could reach $265 billion.
One case, which is winding its way through the English High Court in London and the US Bankruptcy Court in Delaware, shows what happens when the labyrinthine complexities of asbestos litigation combine with clashes of bankruptcy law and procedure. Precedents are being set for corporates, bondholders, banks, pension schemes, and insolvency professionals that find themselves tangled up in future cross-border insolvencies. And, according to one adviser, the case is burning around $10 million a month in fees.
In Delaware, New York Stock Exchange-listed Federal-Mogul Corporation and 22 US subsidiaries are subject to Chapter 11 bankruptcy proceedings. In the UK, 134 companies are in administration. Many are members of the Turner & Newall (T&N) Group, which Federal-Mogul bought in 1998.