PITTSBURGH — In a deal that would settle about 300,000 current and future asbestos cases nationwide, Halliburton Co. has agreed to pay about $4 billion in cash and stock.
The Houston-based industrial giant once led by Vice President Dick Cheney announced the deal Wednesday in U.S. Bankruptcy Court in Pittsburgh.
The lawsuits mostly involve people exposed to asbestos while working at plants that produced the material or in places where asbestos was used, such as steel mills.
"This settlement is the kind of model that other companies and asbestos attorneys should be looking at to resolve company liability in the future," said Perry Weitz, the lead negotiator for the plaintiffs. "The settlement shows that companies can quantify their asbestos exposure and conduct business without a cloud of asbestos liability to provide compensation sooner than later."
Halliburton inherited most of the claims four years ago when the oilfield services, engineering and construction conglomerate acquired Dresser Industries Inc. for $7.7 billion.
The settlement was outlined in Pittsburgh because most of the asbestos claims were filed against a former Dresser subsidiary, Pittsburgh-based Harbison-Walker Refractories Co., that filed for Chapter 11 bankruptcy last February.
The settlement includes about $2.8 billion in cash and 59.5 million shares currently worth about $1.2 billion. The amount paid to individual claimants and their families would vary according to the injuries suffered.
Asbestos is used for fireproofing and insulation. Inhaling asbestos fibers can cause lung cancer and other deadly respiratory ailments, sometimes decades later.
More than 75 percent of the plaintiffs agreed to the deal, which was required for a settlement.
Dave Lesar, Halliburton chairman, president and chief executive, said: "This agreement in principle represents good news for our shareholders, customers, vendors, employees and everyone else with whom we do business. If this transaction is completed, it will resolve a major issue that has been clouding our future."
For years, Halliburton managed to settle cases for relatively modest sums. But last year, verdicts in Texas, Mississippi and Maryland totaled $152 million. Investors noticed, and, in a single day following one of those verdicts, Halliburton's stock fell 40 percent.
The Dresser acquisition was overseen by Cheney before he left in 2000 to become President Bush's running mate. Harbison-Walker Refractories was spun off by Dresser in 1992, before the Halliburton deal.
Halliburton has claimed that Harbison-Walker promised to bear the liability for any asbestos claims filed against it after 1992 and did so for several years — until 2001, when it said it would no longer do so. Halliburton is suing Harbison-Walker over the liability issue.
Harbison-Walker made construction products containing asbestos for many years and was part of a Baltimore case in which a jury awarded five people who claimed asbestos exposure $40 million.
In the second quarter of this year, Halliburton said it lost $498 million — its first loss in four years — as it took charges against earnings, in part for asbestos-related claims.
Diane Sullivan, a lawyer unconnected to the case, said two factors may have pressured both sides toward settlement.
"Halliburton had to take note of recent jury awards in the tobacco lawsuits," said Sullivan, who has been involved in tobacco and breast-implant litigation. "On the other hand, there has been a change in Congress, and attorneys for the plaintiffs are probably aware that tort reform could be on the way."