Settlement Approved for McDermott International

Article Added January 17th, 2006 - Print This Story - Bookmark This Story

A Louisiana judge has approved the settlement of more than 300,000 claimants against McDermott International Inc., a settlement that could exceed $900 million in costs to the company.

U.S. District Judge Sarah Vance approved the plan for McDermott International to settle over 300,00 claims against the company for asbestos related illness. The payout could range anywhere from $375 million to $955 million. The settlement included a bankruptcy reorganization plan for Babcock & Wilcox Co., a unit of McDermott that is the focus of all the asbestos claims. The company used to produce insulation for boilers with asbestos, a material that can lead to lung cancer and emphysema.

McDermott removed the unit of Babcock & Wilcox after writing off more than $224.7 million for its investment. The new settlement calls for $1.1 billion in insurance payments and a $350 million payout to a trust for the lawsuits. The trust will be established regardless of the findings for the Bill before Senate for a group trust fund for similar cases. If the federal bill is not passed before November 30th, McDermott will pay an additional $350 million with a $250 million note along with it. If the bill is passed, the amount will be dropped to $25 million, since funds would be allocated to the federal trust. McDermott plans to keep B&W after the reorganization.

Article Added January 17th, 2006 - Print This Story - Bookmark This Story