Court Approval of Asbestos Settlement Sought by Pfizer, Quigley
Tiffany Kary, Bloomberg News - Pfizer Inc. (PFE), the world's largest drugmaker, reached a settlement with asbestos claimants that may bring an end to its Quigley unit's seven-year-old bankruptcy case.
U.S. Bankruptcy Judge Stuart Bernstein refused to allow Quigley to exit Chapter 11 court protection in September, saying Pfizer had manipulated the bankruptcy process to benefit itself. Pfizer and a committee of asbestos claimants entered into an agreement on March 20 that may resolve their dispute over claims, according to court papers filed yesterday in Manhattan.
The accord "resolves the legal and equitable issues that existed under that plan, including enhancing distributions for current claimants and future demand holders, improving reorganized Quigley's long-term feasibility, and rectifying concerns regarding good faith," lawyers for Quigley wrote.
Asbestos claims against Quigley may total $4.45 billion during the next 42 years, according to testimony cited by Bernstein in September. Under the deal, which requires court approval, asbestos claimants would vote in favor of Quigley's bankruptcy plan and waive all rights to a jury trial.
In exchange, Pfizer would contribute $264.9 million in cash and all of the stock in a reorganized Quigley to a trust to pay asbestos claims. New York-based Pfizer also would forgive its own claims against the non-operating unit, according to a draft of the plan.
"Once Quigley's reorganization plan is presented to and confirmed by the U.S. Bankruptcy Court, asbestos-related liability arising from Quigley will be resolved through a fund established as part of the bankruptcy reorganization," Pfizer spokesman Christopher Loder said in a statement. The agreement is "in the best interests of the company," he said.
Pfizer in November reported a $701 million third-quarter charge for asbestos litigation for Quigley. The ad hoc committee, representing 43,100 asbestos claimants, had asked the court to lift an injunction that has barred them from bringing claims against Pfizer since 2004.
Quigley, founded in 1916, made three products for the steel industry that contained asbestos from the 1940s to the 1970s. Pfizer bought Quigley in 1968.
The case is In re Quigley Co., 04-15739, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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