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Since July 2002, Bert Cornelison Jr. has worked at a feverish pace. Most weeks, the Halliburton Co. general counsel says, he tried to take off Sundays. But that was it. Monday through Saturday, Cornelison and his team of outside lawyers negotiated or hammered out the details of a settlement. The focus of Cornelison’s activity was disclosed on Dec. 18, 2002, when the nation’s second-largest oil services company announced that it had reached a tentative global settlement, worth some $4 billion in cash and stock, to resolve some 300,000 asbestos-related claims. The settlement was reached with more than 40 plaintiffs’ firms representing substantially more than the required 75 percent of the known present asbestos claimants needed to achieve resolution on all the cases, says Donald Godwin, a partner in Dallas’ Godwin Gruber, who represented Halliburton in the negotiations. The agreement covers all pending and future personal-injury asbestos claims against Halliburton and its subsidiaries, the company stated. In June 2002, the Halliburton board approved Cornelison’s strategy to rid the company of the asbestos litigation, which had weighed down the company’s stock price. Two Halliburton outside lawyers and one plaintiffs lawyer say Cornelison personally had conceived of the novel idea of creating a prepackaged and negotiated bankruptcy plan as a vehicle for settling with asbestos plaintiffs. In the past, corporate asbestos litigation defendants have negotiated global settlements only after they already have declared bankruptcy. Cornelison devised the strategy of working out the negotiations before the subsidiaries filed. With Cornelison’s plan, Halliburton will place only two of it subsidiaries, Dresser Industries Inc. and Kellogg Brown & Root Inc., under bankruptcy protection. Halliburton itself will remain solvent and will be excluded from the bankruptcy filing. The deal is contingent on banks agreeing to finance the settlement. To meet the requirements of the federal bankruptcy code and effect that deal, Halliburton had to assure the court that it had reached settlement with at least 75 percent of the existing claimants. Halliburton, at the same time, had to make a deal that was acceptable to a guardian, who had been appointed by the court, for future claimants. SEEMINGLY IMPOSSIBLE In early July 2002, with the understanding that Halliburton subsidiaries would go into bankruptcy to finance the settlement, Cornelison and a team of lawyers led by Godwin began the arduous task of negotiating with dozens of lawyers representing the thousands of alleged asbestos victims. “Our goal was to start over the summer and finish at the end of the year. Other lawyers thought that was impossible,” Cornelison recalls. Largely because of Cornelison, Halliburton achieved the seemingly impossible, say two outside defense counsel and one plaintiffs lawyer. “This was a puzzle, an incredibly complex puzzle, and an incredible general counsel was required to put all the pieces together,” Godwin says. “Bert was the key player, the author of the plan and the one who originated everything.” says Andrew Baker, a partner in the Dallas office of Houston’s Baker Botts, who represents Halliburton. “The deal could not have been done without him. He could not have been replaced. He knows asbestos backwards and forwards.” “He was the most knowledgeable person about asbestos litigation at the company. He also had a good relationship with the plaintiffs lawyers,” says Fred Baron, founder of Dallas’ Baron & Budd, who represented asbestos litigants settling their claims against Halliburton with this deal. Cornelison says he cannot pinpoint when he conceived of the prepackaged bankruptcy plan but recalls that he and Halliburton’s CEO David Lesar began discussing such a proposal in March 2002. That was two months before Cornelison assumed the general counsel post. Before moving to the top legal job at Halliburton, Cornelison had been at its subsidiary Dresser as an assistant general counsel. He moved to Dresser in 1994 after stints in-house at EDS Corp. in Dallas and at Howrey Simon Arnold & White in Washington, D.C. At Halliburton, Cornelison oversees a 90-employee legal department. Initially, Halliburton’s management had reservations about going down the settlement road. “We have never viewed these cases as something you couldn’t fight. From a management point of view, it was difficult to consider settlement,” Cornelison says. On the other hand, Halliburton’s stock price had taken a beating because of the perception that the company could lose the litigation. “There was an unrealistic interest in the litigation in the investment community and therefore an unrealistic view of our share price,” Cornelison says. By July, Cornelison says, he had some advantages going forward. For starters, he got along well with plaintiffs lawyers, he says. “I’ve always had a good relationship with the plaintiffs bar. I treat them as the professionals they are. I have a lot of respect for them. They are the people who know what’s in their best interests,” Cornelison says. Cornelison contends the plaintiffs’ lawyers needed to show public policymakers that they could act responsibly and not force a company into bankruptcy. Baron agrees. “I think there was an effort by the plaintiffs bar to show that way through the thicket,” Baron says. After he and Godwin negotiated with the plaintiffs firms, Cornelison says, Jack Kinsie, a partner in the Dallas office of Baker Botts, helped structure the deal for bankruptcy purposes, and lawyers from Pittsburgh’s Kirkpatrick & Lockhart handled the insurance issues. Godwin and Cornelison say as a rule they tried to forbid the plaintiffs lawyers from engaging in too much horse trading vis-�-vis each other’s deals. “We had lots of discussions. But we never shared our matrices,” Cornelison says. Godwin says there were few attempts on the part of plaintiffs firms to retrade their deals because of what other claimants had received. Godwin says the Halliburton negotiators based their offers on what a particular firm’s jury verdicts had been, the strength of their particular cases, the trends in their regions, as well as other factors.

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