Travelers Insurance Donates $449 Million for Asbestos Settlements
Friday, July 6th, 2007
Travelers Insurance, one of the largest property and casualty insurance companies in America, announced earlier this week that they will contribute $449 million to a bankruptcy trust in order to put an end to several years of asbestos-related litigation faced by one of its clients.
An article in Reuters states that the trust will be established as part of a reorganization plan for AC and S Company, a subsidiary of Armstrong World Industries, best known for the production of flooring. AC and S was an insulation installing unit of the company. Faced with 270,000 asbestos claims, AC and S filed bankruptcy several years ago and has been looking to its insurers to help settle the claims.
A statement issued by Travelers said the settlement will resolve “all current and future asbestos-related coverage claims related to AC and S.†The funds will be taken from existing reserves and Travelers does not expect any impact on earnings.
“AC and S has been one of our most significant and longest-standing asbestos exposures,” said Jay Fishman, the Travelers chief executive, in a statement. “Eliminating the uncertainty inherent in this litigation makes this a very good outcome.”
The plan will require bankruptcy court approval before it goes into effect.
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