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September 08, 2004
Asbestos: Pfizer's Quigley bankrupt
Latest in the endless succession: the Pfizer Corp.'s Quigley Co. subsidiary, which once made coatings for steelmaking equipment, filed for bankruptcy protection in federal court in Manhattan. As part of a deal, Pfizer "agreed to contribute $405 million over 40 years to a trust that will pay remaining and future claims against Quigley"; the parent company has been named in some of the 171,611 lawsuits against its subsidiary claiming injury from asbestos, silica or mixed dust. (Bloomberg; AP; Reuters; The Deal). According to Bloomberg, "Pfizer continues to face about 139,100 claims against American Optical Corp., a business Warner-Lambert bought in 1967 and sold in 1982. Pfizer inherited the liabilities when it acquired Warner-Lambert in June 2000. The unit made respiratory devices and safety clothing to shield against asbestos exposure." Those liabilities have so far been covered by insurance.
Meanwhile, Roger Parloff has a must-read article in the latest Fortune (subscriber-only, alas) on the "scandal" of prepackaged asbestos bankruptcies, also much explored in this space (see Aug. 3 and our asbestos page generally). It should be noted that early news reports on the Quigley bankruptcy do not indicate whether or not it shares some of the aspects of prepacks often considered most objectionable, such as side payments to the organizing plaintiff's lawyers, unfavorable treatment for claimants with the most severe ailments, and carve-ups of insurance proceeds that make it hard for insurers to contest liabilities.
Posted by Walter Olson at 10:08 AM
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