Honeywell and Asbestos Trust sue over disputed $ 2.3 billion claims

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THE BHARAT EXPRESS NEWS INSURANCE NEWS
THE BHARAT EXPRESS NEWS INSURANCE NEWS

Honeywell International Inc. has sued a trust for victims of asbestos poisoning, claiming that fund managers are wrongly paying people who say they have been injured by the toxic industrial substance.

The lawsuit, filed in Pittsburgh, comes after years of acrimony between the industrial conglomerate and a trust set up to resolve the bankruptcy of Honeywell’s former subsidiary, North American Refractories Co., or Narco.

The trustees of the trust filed their own lawsuit against Honeywell, saying the company was trying to evade its obligation to pay up to $ 150 million per year to cover the claims of those harmed by Narco’s products. There is no end date for the court-ordered payments and Honeywell has estimated it could ultimately have to pay up to $ 2.3 billion, according to the trust lawsuit, also filed in Pittsburgh.

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“Honeywell has evidence of serious and abusive mismanagement of the Narco Trust, including that the Trust squandered its assets and paid claimants who failed to demonstrate exposure to any Narco product,” the company said in a statement. press release sent by email.

Long fights

For decades, businesses and asbestos victim advocates have fought over how much to pay people with substance-related respiratory illnesses. The unique lung scarring caused by asbestos is easily recognized by doctors, but lawyers often struggle for years to attribute the damage to a specific product and make sure the right company pays.

“The inappropriate purpose of Honeywell’s actions is to deny or limit compensation to critically ill asbestos victims in order to improve its own results,” Narco Trust officials said in an emailed statement.

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Honeywell owned Narco from around 1979 to 1986. Narco made a handful of products contaminated with asbestos until around 1980 when it withdrew the substance, according to court documents.

The Narco trust was formed over a decade ago after the company filed for bankruptcy to resolve multibillion-dollar asbestos claims. Due to its previous ownership, Honeywell agreed to help fund the Narco Trust. Since inception, the trust has paid out approximately $ 523 million, much of that money coming from Honeywell.

The trustees and the company began arguing over the bonds long before Honeywell made his first payment in 2019, court documents show. Honeywell has offered to make a one-time payment of around $ 506 million to terminate all of its asbestos-related liabilities related to Narco, the documents show.

In its lawsuit, Honeywell accused the trust of spending millions more on administrative costs than other similar victim assistance funds. The company also accused the trust of hiring consultants who work for one of the three administrators who control the victims’ fund.

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The Victims Fund has been forced to increase spending on legal fees after threats of litigation from Honeywell, the trust said in an emailed statement. Two directors who were not affiliated with the consultants authorized their hiring more than five years ago to Honeywell’s knowledge and in accordance with the fund’s statutes, the statement said.

The case is North American Refractories Co., 15-00204, US Bankruptcy Court for the Western District of Pennsylvania (Pittsburgh).

Copyright 2021 Bloomberg.

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