Pfizer to Take $369 Million Asbestos Charge
Reuters, September 3, 2004
Pfizer Inc. on Friday said it would take a third-quarter pretax charge of $369 million for a settlement with plaintiffs who allege they were harmed by products containing asbestos and other minerals once sold by a Pfizer subsidiary.
Paul Fitzhenry, a Pfizer spokesman, said the charge and Pfizer’s insurance coverage should cover all asbestos-related liabilities of the company and its wholly owned Quigley subsidiary. Fitzhenry said the proposed settlement was reached with attorneys representing most claimants in the 25-year battle.
Breathing asbestos dust can cause scarring of the lungs and a form of cancer in the lining of the lungs called mesothelioma, which typically develops 30 to 40 years after exposure, even to trace amounts of the mineral.
Pfizer in 1968 acquired Quigley, which sold insulation materials and products containing asbestos until the early 1970s.
Pfizer in subsequent decades has sold off companies unrelated to its main business of developing and selling prescription medicines, becoming through a series of mergers the world’s biggest drugmaker.
Under a reorganization plan meant to settle all claims, Pfizer said Quigley will file for federal Chapter 11 bankruptcy protection in New York, if approved by 75 percent of the claimants. Pfizer said Quigley will survive solely to manage asbestos-related claims.
As part of the bankruptcy petition, Pfizer said it reached settlement agreements with lawyers representing more than 80 percent of existing asbestos claimants that provide for a total of $430 million in payments.
Moreover, the reorganization plan will create a trust to pay out all remaining pending claims and any future claims. Pfizer said it will contribute $405 million to the trust over 40 years through a note as well as approximately $100 million in insurance and will forgive a $30 million loan to Quigley.
Pfizer said it and Quigley are named, along with numerous other defendants, in over 171,000 lawsuits claiming personal injury allegedly caused by exposure to asbestos, silica or mixed dust.