Fast forward:
Hopes of asbestos compensation deal rise [FT]
By Patti Waldmeir in Washington
Published: April 12 2005 03:00 | Last updated: April 12 2005 03:00
Prospects for the creation of a $140bn asbestos compensation fund appeared to improve yesterday after a key US Senate Democrat indicated the plan might have attained bipartisan support in the Senate judiciary committee.
Arlen Specter, the committee's Republican chairman and the main force behind the bill, said he expected to introduce legislation within the next few days.
Dianne Feinstein, a prominent Democrat on the committee, said yesterday that she anticipated supporting the legislation, but wanted to see the written version. The California senator said she thought other Democrats would back it, including Patrick Leahy of Vermont, the Judiciary Committee's ranking Democrat.
Ms Feinstein said she was inclined to support the measure based on what she heard during a 90-minute meeting with Mr Specter and Edward Becker, a US appeals court judge who was recruited to help mediate differences between those interested in the proposed fund. She was the only Democrat to support the legislation two years ago when it passed the Judiciary committee.
But it remained unclear yesterday whether a bill rewritten to satisfy Democrats could also garner enough Republican support on the committee to guarantee swift passage to the Senate floor for a vote. Mr Specter, a Pennsylvania Republican, said he hoped for Republican support and planned to meet judiciary committee Republicans today.
"There may be bipartisan support to get the bill out of the committee, but that does not necessarily mean that it will become law," said one lobbyist close to the negotiations, adding that both parties may be motivated by the desire to avoid blame if the bill eventually fails.
The trust fund would pay asbestos claimants on a no-fault basis, but keep cases out of court under most circumstances. The fund would be managed by the federal government but privately financed by asbestos defendants and insurers.
Negotiations between affected groups - from businesses to insurers to trade unions and victim groups - have been debating for more than two years over key issues such as the size of the fund, and what should happen if it runs dry before legitimate asbestos claims have been paid.
_______
W.R. Grace, USG Surge on Prospects for Asbestos Fund (Update3)
April 12 (Bloomberg) -- Shares and bonds of U.S. companies hardest hit by asbestos-liability claims, including USG Corp. and W.R. Grace & Co., rallied on improved prospects for legislation to create a $140 billion fund to compensate victims.
Chicago-based USG, which mixed asbestos into wall products, rose $3.60, or 10 percent, to $38.87 at 11:35 a.m. in New York Stock Exchange composite trading. Columbia, Maryland-based Grace, which sold asbestos-tainted insulation, rose 92 cents, or 11 percent, to $8.96. Both companies filed for bankruptcy in 2001.
Republicans have drafted a bill to create a fund for asbestos victims, ending lawsuits that sent more than 70 companies into bankruptcy because they were unable to pay the potential liabilities. Some Democrats are prepared to support the bill, California Senator Dianne Feinstein said yesterday.
``I am very hopeful I will'' support the bill, Feinstein, a Democrat, told reporters in Washington. ``I want to look at the bill before I make any decision.''
Shares of Toledo, Ohio-based Owens-Corning, which faces at least 200,000 claims by people who say asbestos in the company's products made them sick, soared $1.10, or almost 44 percent, to $3.63 in over-the-counter trading.
Owens-Corning bonds rose 16 percent. The company's 7 1/2 percent notes maturing in August 2018 rose 10.5 cents on the dollar to 76 cents on the dollar, according to Trace, the bond price reporting system of the National Association of Securities Dealers. The yield fell to 10.6 percent from 12.6 percent.
`Positive' Support
Senator Arlen Specter of Pennsylvania, the Judiciary Committee's Republican chairman, said his meeting with Democrats yesterday was ``positive'' and that some may support the measure, which would finance payments to victims with contributions from the targeted companies and their insurers.
Specter plans to introduce a bill in the next ``one or two or three days'' and hopes to send it to the Senate floor by the end of April, he said yesterday.
Democrats ``are very much interested in getting a bill,'' Specter said. ``We are still working up a couple of loose ends.'' In response to a question, he said, ``I wouldn't use the word deal until we are a little bit further along.'' He also said he is ``working hard'' to win the backing of all 10 Republicans on the Judiciary Committee.
Senate Republican Leader Bill Frist plans to meet later today with Republican lawmakers to discuss the latest draft, which he has not yet seen.
`Need Finality'
``I am doing everything I can'' as leader ``to pull together a bipartisan bill,'' Frist said today in an interview in the Capitol. The Tennessee senator said he hoped the bill would get Republican support in the Judiciary Committee. ``I want it to be strongly bipartisan.''
The bill probably won't gain the support of conservative Republicans and defendants if it still allows future plaintiffs to return to court should the fund run out of money, Deutsche Bank fixed-income analyst Joseph Princiotta said in a telephone interview. The provision was added more than a year ago to appease Democrats and labor groups, he said.
``What companies need is finality and certainty, and a backdoor to the courthouse doesn't provide this,'' Princiotta said. ``This is a complex problem that doesn't have a clear solution at this point.''
Feinstein said she is inclined to support the measure based on what she heard during the 90-minute meeting with Specter and U.S. Appeals Court Judge Edward Becker, who was recruited to help mediate differences between those interested in the proposed fund.
Democrats Meet
Democrats probably will support the bill, including Senator Patrick Leahy of Vermont, the top representative of his party on the Judiciary Committee, Feinstein said. Leahy is scheduled to brief fellow Democrats on the panel later today, lawmakers said.
Asbestos, a heat-resistant material used in insulation, auto parts and construction products since the early 1900s, can cause respiratory illness and has been linked to a rare and particularly lethal form of cancer that can surface years after exposure.
Shares of Armstrong Holdings Inc., North America's largest maker of vinyl flooring, jumped 70 cents, or 37 percent, to $2.60. Lancaster, Pennsylvania-based Armstrong, which filed for bankruptcy in 2000, manufactured and installed asbestos insulation and used the mineral in some flooring products and gasket materials.
Tainted Insulation
Owens Corning began selling its Kaylo insulation containing asbestos for use in pipes and around boilers in 1953 and stopped making asbestos products in 1972. The company inherited more asbestos liability when it purchased building-products maker Fibreboard Corp. in 1997.
Grace used asbestos in fireproofing materials, and it mined and processed asbestos-tainted vermiculite, a mineral used in insulation, potting soil and fertilizer. The U.S. indicted seven current and former Grace executives in February for allegedly conspiring to release asbestos at a vermiculite mine near Libby, Montana.
USG makes sheetrock wallboard and is the largest U.S. wallboard producer. Its joint compounds for sealing walls contained asbestos. |
