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December 13, 2018

Insurer Claims Asbestos Fraud Tainted Pittsburgh Corning Bankruptcy

An insurer that was required to help fund the $3 billion bankruptcy of Pittsburgh Corning Corning has filed court papers seeking the case to be reopened, saying “pervasive fraudulent conduct” by asbestos plaintiff lawyers tainted the proceedings.

The filing by Everest Re and its Mt. McKinley Insurance unit follows the opening of millions of pages of documents in the Garlock Sealing Technologies bankruptcy, which revealed how lawyers representing asbestos plaintiffs deliberately delayed filing claims against bankrupt companies until they had completed cases against solvent ones, in order to avoid cluttering the record with potential evidence of exposure to other firms’ products.

Everest is among the insurers ordered to pay $1.7 billion into the bankruptcy trust formed to settle claims against Pittsburgh Corning, a joint venture of PPG Industries PPG Industries and Corning that made asbestos insulation widely used in ships, refineries and other industrial settings. A judge approved the bankruptcy plan in 2013 and last year a federal district court judge rejected Everest’s challenge to the plan.

Everest’s claims mirror the findings of the bankruptcy judge who slashed Garlock’s estimated asbestos liability from $1.3 billion to $125 million last year after a detailed examination of 15 claims by several different law firms revealed every single one had withheld information about alternative exposures in order to mount a stronger case against Garlock. In that case, Judge George R. Hodges said the evidence suggested a process “infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”

In its filing, Everest accuses several law firms by name of manipulating or hiding evidence including Waters Waters & Kraus of Dallas, New York’s Belluck & Fox Fox, and Motley Rice, the South Carolina firm most famous for helping to engineer the $200 billion master tobacco settlement with state attorneys general in 1998. Some of those same firms are being sued by Garlock for civil racketeering for allegedly withholding evidence to drive up settlement values.

The lawyers say the accusations against them are baseless. Under the terms of most bankruptcy trusts, which are set up and overseen by plaintiff lawyers, evidence of asbestos exposure can be as simple as a work history at a site where asbestos was known to be used. They say companies like Garlock made a business decision to settle lawsuits, frequently in bulk, in order to avoid the cost of litigation. It’s not the job of plaintiff lawyers to help them obtain evidence to reduce the value of those claims, those lawyers say; if manufacturers wanted evidence of other exposures, they could have questioned coworkers or used shipping records and other documents to show the presence of insulation, for example, which most independent medical experts say is far more dangerous than other forms of the mineral.

Garlock was able to question some of the lawyers under oath, however, and got revealing admissions about how lawyers delayed filing trust claims until after they’d concluded cases against solvent companies. In its filing, Everest cites a few examples, including that of Robert Treggett, a Waters & Kraus client who won a $24 million jury verdict against Garlock after a trial in which his attorneys repeatedly deflected questions about whether Treggett had been exposed to dangerous Unibestos insulation.

Garlock “didn’t bring proof that there was Unibestos on that ship. They couldn’t. It’s not true,” Treggett’s attorney said in closing arguments, and he was able to keep Unibestos off the jury form. Yet Treggett filed a claim in the PPG bankruptcy, attesting to the same exposure he’d denied at trial.

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Insurer Claims Asbestos Fraud Tainted Pittsburgh Corning Bankruptcy

Taxpayers to cover James Hardie asbestos shortfall

Taxpayers to cover James Hardie asbestos shortfall

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Tim Binsted

The NSW government will extend funding to asbestos victims in case of a shortfall in funds from James Hardie

The NSW government will extend funding to asbestos victims in case of a shortfall in funds from James Hardie Photo: Bloomberg

The New South Wales government will extend further credit to the Asbestos Injuries Compensation Fund to prevent victims being paid in instalments in the event payments from James Hardie Industries are insufficient to cover claims.

On Friday the NSW government said it has agreed to amend the terms of its loan facility with the AICF. The changes extend the term of the loan and allow the fund to draw down the full $320 million of the facility rather than $214 million previously stipulated.

The AICF warned last year that a spike in mesothelioma claims, the most expensive asbestos victims claims category, could force it to enter an “approved payment scheme” as of July 1.

The scheme, which would have allowed compensation to be paid to some victims in instalments rather than upfront due to a lack of funds, sparked outrage among victims groups.

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Taxpayers to cover James Hardie asbestos shortfall

2 companies fined $380,000 over asbestos exposure

OLYMPIA — After state regulators cited and decertified Partners Construction for exposing its workers to asbestos at a Seattle apartment project, a family member from the company started a new business to take its place on the same project.

That business, Asbestos Construction Management, shared workers and equipment used by Partners Construction.

Together, the businesses are being fined about $380,000, according to the state Department of Labor & Industries (L&I).

The violations occurred during the demolition of an apartment building in the Fremont neighborhood where the companies were supposed to remove asbestos before the building was torn down. A three-story building with five units, it featured “popcorn” ceilings and vinyl floors that both contained asbestos.

An L&I investigation between February and May revealed nearly 19 “willful and serious” safety and health violations between work done by the two companies. Workers were exposed to asbestos, and hazardous debris was left on site, according to a statement Friday from L&I.

Donald Murray, listed in state documents as the owner of Asbestos Construction Management, did not return a call or email seeking comment.

Asbestos, a mineral fiber found in soil and rocks, has been used in buildings and automobiles, among other things, and today is used in small amounts in a few products. It can cause mesothelioma and lung cancer, and even has its own potentially fatal disease named after it: asbestosis.

The state fined Partners Construction, which was based in Federal Way, for $291,950 for 14 violations. Asbestos Construction Management, of Bonney Lake, was fined $87,150 for five violations.

Before Partners Construction was decertified to handle asbestos and went out of business, it provided the apartment building’s owner in March with a letter stating that all asbestos had been removed.

But when L&I inspectors responded to a worker complaint, they found the site “grossly contaminated,” with about 5,400 square feet of popcorn ceiling and some vinyl flooring remaining in the building.

The companies have 15 business days to appeal the citations. Money paid toward the citations are put in a workers’ compensation pension fund to help injured workers, as well as families of workers who have died.

And L&I is pursuing further action against Asbestos Construction Management.

“We are taking steps to decertify that company,” said Elaine Fischer, spokeswoman for L&I. “We’ve begun the process; they’ve been notified.”

Joseph O’Sullivan: 360-236-8268



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2 companies fined $380,000 over asbestos exposure

India's thriving $2B asbestos industry

“These are huge numbers. We’re talking about millions of people,” Shankar said. “So there is a lot of latent demand.”

Yet there are some poor Indians trying to keep asbestos out of their communities, even as the government supports the industry by lowering import duties and using asbestos in construction of subsidized housing.

“People outside of India, they must be wondering what kind of fools we are,” said Ajit Kumar Singh from the Indian Red Cross Society. “They don’t use it. They must wonder why we would.”

In the ancient farming village of Vaishali, in impoverished Bihar state, the first word about the dangers of asbestos came from chemistry and biology textbooks that a boy in a neighboring town brought home from school, according to villagers interviewed by The Associated Press.

A company was proposing an asbestos plant in the village of 1,500 people located about 1,000 kilometers (620 miles) east of New Delhi.

The villagers worried that asbestos fibers could blow from the factory across their wheat, rice and potato fields and into their tiny mud-and-thatch homes. Their children, they said, could contract lung diseases most Indian doctors would never test for, let alone treat. Neither India nor any of its 29 states keep statistics on how many people might be affected by asbestos.

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The people of Vaishali began protesting in January 2011. They objected that the structure would be closer to their homes than the legal limit of 500 meters (1,640 feet). Still, bricks were laid, temporary management offices were built and a hulking skeleton of steel beams went up across the tree-studded landscape.

The villagers circulated a petition demanding the factory be halted. But in December 2012, its permit was renewed, inciting more than 6,000 people from the region to rally on a main road, blocking traffic for 11 hours. They gave speeches and chanted “Asbestos causes cancer.”

Amid the chaos, a few dozen villagers took matters into their own hands, pulling down the partially built factory, brick by brick.

“It was a moment of desperation. No one was listening to us,” said a villager involved in the demolition, a teacher who spoke on condition of anonymity for fear of retribution from the company. “There was no other way for us to express our outrage.”

Within four hours, the factory and offices were demolished: bricks, beams, pipes and asbestos roofing, all torn down. The steel frame was the only remnant left standing.

“Still, we did not feel triumphant,” the teacher said. “We knew it wasn’t over.”

Read MoreCanada to donate its own Ebola vaccine to WHO

They were right. The company filed lawsuits, still pending, against several villagers, alleging vandalism and theft.

Durable and heat-resistant, asbestos was long a favorite insulation material in the West, but has also been used in everything from shoes and dental fillings to fireproofing sprays, brake linings and ceiling tiles.

Scientists and medical experts overwhelmingly agree that inhaling any form of asbestos can lead to deadly diseases including mesothelioma, lung cancer and asbestosis, or the scarring of the lungs. Exposure may also lead to other debilitating ailments, including asthma and chronic obstructive pulmonary disease.

About 125 million people worldwide are exposed to asbestos at work each year, the WHO says. Because the disease typically takes 20 to 40 years to manifest, workers can go through their careers without realizing they are getting sick.

Dozens of countries including Japan, South Korea, Argentina, Saudi Arabia and all European Union nations have banned asbestos entirely. Others including the United States have severely curtailed its use.

Most asbestos on the world market today comes from Russia. Brazil, Kazakhstan and China also export, though some have been reviewing their positions.

Canada’s Quebec province was the world’s biggest asbestos producer for much of the 20th century. It got out of the business in 2012, after a new provincial government questioned why it was mining and exporting a material its own citizens shunned.

Asia is the biggest market. India last year imported $235 million worth of the stuff, or about half of the global trade.

The global asbestos lobby says the mineral has been unfairly maligned by Western nations that used it irresponsibly. It also says one of the six forms of asbestos is safe: chrysotile, or white asbestos, which accounts for more than 95 percent of all asbestos used since 1900, and all of what’s used today.

“Chrysotile you can eat for breakfast, lunch and dinner!” said Kanat Kapbayel of Kazakhstan’s United Minerals and a board member of the International Chrysotile Association.

Chrysotile is a serpentine mineral, meaning its fibers are curly and more flexible than the other more jagged and sharp forms called amphiboles. The lobby and its supporters say this distinction makes all the difference.

Read MoreFDA approves first DNA-based test for colon cancer

A vast majority of experts in science and medicine reject this.

“A rigorous review of the epidemiological evidence confirms that all types of asbestos fiber are causally implicated in the development of various diseases and premature death,” the Joint Policy Committee of the Societies of Epidemiology said in a 2012 position statement.

Squeezed out of the industrialized world, the asbestos industry is trying to build up new markets and has created lobbying organizations to help it sell asbestos to poor countries, particularly in Asia, it said.

Developed nations are still reckoning with health and economic consequences from past asbestos use.

American businesses have paid out at least $1.3 billion in the largest and longest-running collection of personal injury lawsuits in U.S. legal history, according to a 2012 report by the California-based Rand research corporation. Two years ago, an Italian court sentenced two businessmen from Swiss building material maker Eternit AG to 16 years in prison for negligence leading to more than 2,000 asbestos-related deaths. Billions of dollars have been spent stripping asbestos from buildings in the U.S. and Europe.

Arun Saraf, the Indian asbestos association’s chairman, said India has learned from the West’s mistakes.

He said the lobby’s 15 member companies maintain the strictest safety standards in their factories. That includes limiting airborne dust, properly disposing of waste and insisting employees wear safety masks, gloves and protective clothing.

The vast majority of asbestos used in India is mixed with cement and poured into molds for corrugated roof sheets, wall panels or pipes. Fibers can be released when the sheets are sawed or hammered, and when wear and weather break them down. Scientists say those released fibers are just as dangerous as the raw mineral.

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AP journalists who visited a working factory and a shuttered one in Bihar found both had dumped broken sheets and raw material in fields or uncovered pits within the factory premises. Workers without any safety gear were seen handling the broken sheets at both factories. The working factory was operated by Ramco Industries Ltd., while the other owned by Nibhi Industries Pvt. Ltd. was supplying materials to UAL Industries Ltd.

Saraf, who is also UAL’s managing director, said the materials left strewn across the factory grounds were meant to be pulverized and recycled into new roofing sheets, and were no more dangerous than the final product as the asbestos had already been mixed with cement.

He said Nibhi was not an association member, but “I have been informed that Nibhi workers are provided with all the personal protective equipment.”

Some employees of Ramco’s working factory said they were satisfied that asbestos was safe, and were delighted by the benefits of steady work. But several former employees of both factories said they were given masks only on inspection days, and rarely if ever had medical checkups. None was aware that going home with asbestos fibers on their clothing or hair could put their families at risk.

Ramco CEO Prem Shanker said all employees working in areas where asbestos was kept unmixed were given safety equipment and regular medical checkups that were reviewed by government authorities. “Ramco has consistently gone the extra mile to ensure a safe working environment,” he said. AP was not given permission to visit these indoor areas.

Indian customers like the asbestos sheets because they’re sturdy, heat resistant and quieter in the rain than tin or fiberglass. But most of all, they’re cheap.

Umesh Kumar, a roadside vendor in Bihar’s capital of Patna, sells precut 3-by-1 meter (10-by-3 foot) asbestos cement sheets for 600 rupees ($10) each. A tin or a fiberglass sheet of similar strength costs 800 rupees.

“I’ve known it’s a health hazard for about 10 years, but what can we do? This is a country of poor people, and for less money they can have a roof over their heads,” Kumar said.

“These people are not aware” of the health risks, he said. But as sellers of asbestos sheets wanting to stay in business, “we’re not able to tell them much.”

The two-day asbestos conference in December was billed as scientific. But organizers said they had no new research.

One could say they’ve gone back in time to defend their products.

The Indian asbestos lobby’s website refers to 1998 WHO guidelines for controlled use of chrysotile, but skips updated WHO advice from 2007 suggesting that all asbestos be banned. The lobby also ignores the ILO’s 2006 recommendation to ban asbestos, and refers only to its 1996 suggestion of strict regulations.

When asked why the association ignored the most recent advice, its executive director, John Nicodemus, waved his hand dismissively. “The WHO is scaremongering,” he said.

Many of the speakers are regulars at asbestos conferences around the world, including in Brazil, Thailand, Malaysia, Ukraine and Indonesia.

American Robert Nolan, who heads a New York-based organization called Environmental Studies International, told the Indian delegates that “a ban is a little like a taboo in a primitive society,” and that those who ban asbestos are “not looking at the facts.”

David Bernstein, an American-born toxicologist based in Geneva, said that although chrysotile can cause disease if inhaled in large quantities or for prolonged periods, so could any tiny particle. He has published dozens of chrysotile-friendly studies and consulted for the Quebec-based Chrysotile Institute, which lost its Canadian government funding and shut down in 2012.

When asked by an audience member about funding for his research, he said some has come from chrysotile interests without elaborating on how much. A short-term study generally costs about $500,000, he said, and a long-term research project can cost up to about $4 million.

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India's thriving $2B asbestos industry

Former James Hardie boss thought asbestos health concern was 'a beat-up'

Former James Hardie boss thought asbestos health concern was ‘a beat-up’

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David MacFarlane, former managing director of James Hardie Industries, outside the hearing.

David MacFarlane, former managing director of James Hardie Industries, outside the hearing. Photo: Anthony Johnson A

The man credited with deciding in 1978 to eliminate asbestos from James Hardie products said he thought at the time that widespread health concern about its use in building materials was a “media beat-up”.

David MacFarlane was the managing director of James Hardie Industries between 1978 and 1989 and has never before given evidence about his role in the company, which manufactured and distributed building and other products containing asbestos.

He told the Dust Diseases Tribunal in Sydney on Tuesday that on taking the top job he received a brief from the Hardie board.

Stephen Wickham, who is suing James Hardie, with his wife Wendy outside the James Hardie ( Amaca Pty Ltd ) hearing.

Stephen Wickham, who is suing James Hardie, with his wife Wendy outside the hearing. Photo: Anthony Johnson

“My job was to get rid of asbestos … just to do it as quickly as possible,” he said.

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Former James Hardie boss thought asbestos health concern was 'a beat-up'

Other Asbestos Trusts Should Consider Copying a Share Sale and Capital Raise

The carryover effect of asbestos and the death and damages from mesothelioma are both still many years away from coming to an end. In fact, some of the new mesothelioma cases may still not even be discovered for another decade or more. Armstrong World Industries Inc. (AWI) has been a public company since after its bankruptcy in late 2006. The Armstrong World Industries Asbestos Personal Injury Settlement Trust and Armor TPG Holdings, under the private equity firm TPG, had more than 50% controlling interest and they are lightening up on the position.

24/7 Wall St. does not view this as a localized or single-entity issue. Our belief is that other asbestos trusts around the country should consider copycat offerings like we have just seen. The company makes and sells flooring products and ceiling systems, and it is still living under the control of its post-bankruptcy under its former employees’ asbestos trust and private equity.

Shares were within striking distance of a 52-week high of $58.48, and the chart reads differently than the actual all-time highs because of three one-time dividends of around $27 per share in total since 2006.

What we find interesting about this offering is that it was upsized to 12,057,382 common shares. The previous amount was to be an offering of 10,057,382 shares, an indication of strong demand. One thing helping the demand was that the company stepped up to the plate and bought about half of the offering. Another reason that asbestos trusts might want to consider doing copycat offerings for their mesothelioma patients and future claims is that the $51.75 offering price was never even seen on the downside, and the stock is up from a week earlier and is back at the highest level in months.

Wall Street often makes for a strange partner when it comes to finances. It seems that the investment community is happy to have this much less influence from the former Armstrong World employees and dependents asbestos trust out from the daily workings of the new Armstrong World.

As of December 12, 2013, the Armstrong World Industries Asbestos Trust held more than 25.3 million shares of common stock. The pre-offering control by the trust came to more than 40% of the value of the more than $3 billion market cap of Armstrong World Industries. In short, there are still many shares here that can be sold in the future, and it was refreshing to see a secondary offering this well received by Wall Street.

Also note that Moody’s recently issued a negative outlook on Armstrong World’s corporate credit rating to reflect that the controlling shareholders are negatively affecting Armstrong’s liquidity profile in an effort to enrich themselves. Still, the stock went above its offering price.

You could almost make the argument that asbestos trusts around the country might even be able to use Wall Street to their advantage in this strong stock market. If you run an asbestos trust or are in a mesothelioma class holding many shares of recapitalized post-bankruptcy stocks, you might want to consider looking to see if the Armstrong World situation is applicable to you.

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Other Asbestos Trusts Should Consider Copying a Share Sale and Capital Raise