(Bloomberg) — Travelers Cos. must pay more than $500 million to victims of asbestos-related diseases under settlement proposal first approved by a judge in 2004, a federal appeals court in New York ruled.
Travelers was ordered to pay the amount under settlements stemming from the bankruptcy of Johns Manville Corp., once the largest supplier of asbestos and asbestos-containing products. Travelers, based in New York, had been the primary insurer of the company, which sought bankruptcy protection in the 1980s while facing claims related to asbestos exposure.
The appeals court ruling today is the latest of back-and- forth decisions over the proposed payout. The case had wound its way to the U.S. Supreme Court, which in 2009 overturned a ruling allowing suits against Travelers units by people harmed by asbestos exposure and revived the $500 million settlement.
U.S. Bankruptcy Judge Burton Lifland in Manhattan ruled in 2011 the insurer had to abide by the settlement and pay the victims, saying the dispute had dragged out for too long.
A year later, a federal district court found that certain disputed conditions involving the settlement agreement hadn't been met and reversed the lower court ruling. The appeals court today disagreed, also finding that Travelers “did not timely raise its arguments,” regarding those settlement conditions.
Patrick Linehan, a spokesman for Travelers, didn't immediately respond to a phone call seeking comment on today's ruling.
Misrepresenting knowledge
Claimants who sought funds from Travelers alleged that the insurer engaged in wrongdoing by misrepresenting Johns Manville's knowledge of asbestos hazards and failed to disclose what it knew about the hazards, according to the opinion issued today.
“Because we conclude that the relevant conditions precedent were satisfied, we vacate the district court's order and remand with instructions to reinstate the bankruptcy court's final judgment,” the appeals court said in its opinion today.
The case is In Re: Johns-Manville Corp., 12-1094, U.S. Court of Appeals, Second Circuit (Manhattan).
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