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The Senate Judiciary Committee on Tuesday released a draft of an asbestos reform bill that revisits creating a privately financed, publicly administered trust to pay off corporate asbestos liabilities. However, the 273-page draft does not include the size of the proposed trust fund. Committee Chairman Arlen Specter, R-Pa., said Tuesday the trust might end up near $140 billion, the amount Democrats and Republicans agreed on in 2004. The Asbestos Alliance, a group of companies seeking reform, said it supports the $140 billion figure. But labor groups prefer a trust fund closer to $149 billion. The bill would require the fund to be financed by companies with asbestos liabilities, their insurers and some settlements. About 8,400 companies have been named in asbestos lawsuits, a fraction of which have ended up in bankruptcy because of their liabilities. Based on the $140 billion estimate, companies facing asbestos liabilities would pay $90 billion, insurers $46 billion and existing trusts would chip in $4 billion. The U.S. Department of Labor would manage the fund, along with an administrator who would be appointed by the president. Congress would also have some say in appointing an advisory committee. While those with a stake in the bill — companies with asbestos liabilities, insurance companies, labor unions and trial lawyers — appear closer to agreement on more provisions in the bill now than in 2004, there are still some lingering issues. Along with the exact size of the fund, there is little agreement on what happens if the fund collapses. Can asbestos claims then revert back to the court system? If so, would they revert back to state court or federal court? Despite the unanswered questions, Specter said he wants to send a bipartisan bill to the floor in February. As for those issues where a consensus has not been reached, Congress would make the hard choices, the senator said. “The economy of this country is at risk” without a bill, Specter said. Patrick Leahy, D-Vt., lead Democrat on the Judiciary Committee said the draft bill is a good start. “We’re not going to have a perfect bill. It would be a shame to let this fall apart,” he said. Only a few companies that have filed for bankruptcy due to their asbestos woes have exited Chapter 11 since Johns Manville Corp. managed the feat in 1988. On Jan. 4, Houston oil services giant Halliburton Co. announced that its Dresser Industries and Kellogg, Brown & Root subsidiaries became the most recent to emerge from bankruptcy as part of its $4.17 billion settlement of thousands of asbestos claims. The two units had filed for bankruptcy protection in December 2003. However, several more corporations still face billions of claims, such as floormaker Armstrong World Industries Inc. which filed on Dec. 6, 2000. When Manville filed for bankruptcy in 1982, it faced about 16,000 asbestos claims. By comparison, today it is common for some companies to have more than 100,000 cases pending against them, according to the American Bar Association. “This is the greatest litigation crisis in the history of the court system,” testified Judge Edward Becker of the 3rd U.S. Circuit Court of Appeals in Philadelphia, who has been mediating the asbestos issues among the stakeholders. “And it has taken an enormous toll on the bankruptcy system,” the jurist said. Copyright �2005 TDD, LLC. All rights reserved.

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