Halliburton Completes Hearings On DII Industries' Bankruptcy
|Tuesday, May 11, 2004
Halliburton reports that the bankruptcy court completed hearings on confirmation of DII Industries' proposed plan of reorganization. The company expects that the necessary bankruptcy court and district court orders confirming DII Industries' proposed plan of reorganization will be entered by the end of the summer 2004. Consistent with earlier rulings, the bankruptcy court announced it intends to issue a final order denying standing to the insurance carriers' objections to confirmation of DII Industries' proposed plan of reorganization, other than relating to insurance neutrality. Certain insurers have reserved the right to appeal the final order denying standing. The appeals will be withdrawn if all of the company's insurance settlements, including those discussed below, become effective.
Halliburton announced today that DII Industries has entered into a non-binding agreement in principle with the leaders of the London Market insurance companies that, if implemented, would settle insurance disputes between DII Industries and substantially all the solvent London Market insurance companies. The agreement in principle is subject to board of directors' approval of all parties and agreement by all remaining London Market insurers.
Halliburton also announced that DII Industries expects to shortly enter into a non-binding agreement in principle with its solvent domestic insurance carriers that, if implemented, would settle remaining insurance disputes with those carriers. The agreement in principle would be subject to board of directors' approval of all parties, agreement by Federal-Mogul Products, Inc. and approval by the Federal-Mogul bankruptcy court.
Halliburton expects that, if implemented, these and previously announced proposed insurance settlements would result in the receipt of an aggregate of approximately $1.6 billion in cash (with a present value of $1.4 billion) for all DII Industries' insurance receivables. Of this amount, Halliburton expects to collect over $1 billion by the middle of 2006. These proposed settlements are subject to numerous conditions, including the conditions of the previously announced Equitas settlement, which include the condition that Congress does not pass national asbestos litigation reform legislation before January 5, 2005. Although Halliburton and DII Industries are working toward implementation of these proposed settlements, there can be no assurance that the transactions contemplated by these agreements in principle can be completed on the terms announced.
"I am pleased that we have reached these significant milestones toward resolving our asbestos liability," said Dave Lesar, chairman, president and chief executive officer of Halliburton. "These insurance settlements, if consummated, will resolve disputes between us and our carriers, forestall further appeals, and allow the bankruptcy proceedings to be completed expeditiously."