ASBESTOS LITIGATION: ACandS Sues Insurer for Asbestos Coverage
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Published November 7, 2003


ACandS, Inc., filed a case on October 30 challenging an 
arbitration award issued on July 31 limiting the Company right 
to future insurance coverage for asbestos-related bodily injury 
claims.

The former insulation contractor, forced into bankruptcy by 
asbestos-related bodily injury claims, filed the case in the 
U.S. District Court for the Eastern District of Pennsylvania 
against Travelers Casualty and Surety Company, a subsidiary of 
Travelers Property Casualty Corp. 

The ACandS lawsuit alleges that the arbitrators had no authority 
under the parties' contract and federal bankruptcy law to 
discharge Travelers from its future obligations to provide 
coverage for asbestos claims. 

According to ACandS, the arbitration decision did not relieve 
Travelers of its obligation to pay 45% of the approximately 
$2,800,000,000 in claims incurred prior to ACandS' bankruptcy 
filing. But, if permitted to stand, the decision would relieve 
Travelers of substantially all of its future coverage 
obligations to ACandS. 

James E. Hipolit, ACandS's President and General Counsel 
declared, "As insurers' asbestos-related liabilities grew in the 
late 1990s, Travelers developed new theories to try to deny 
coverage to ACandS and our claimants."

Hipolit further said, "Although these new theories were 
completely at odds with the way Travelers has handled claims for 
fifteen years, Travelers convinced the arbitration panel to 
accept one of its new theories and discharge it from its future 
obligations. The arbitrators had no power to do this, and we are 
asking the court to set aside the award." 

ACandS is optimistic about the outcome of the current lawsuit, 
especially since the arbitration panel issued a split 2-to-1 
decision and the dissenting arbitrator issued a strong opinion 
in favor of ACandS. The arbitration decisions are confidential, 
but have been filed with the court under seal. 

ACandS estimates that Travelers already owes $1,260,000,000 for 
the pre-bankruptcy claims not affected by the arbitration award. 
If ACandS prevails in its action to vacate the arbitration 
award, ACandS would once again be entitled to coverage not only 
for 45% of the $2,800,000,000 in existing settlements, but also 
for 45% of the over 100,000 claims still pending against ACandS 
and of virtually all claims filed against ACandS in the future.
  
For more details, contact Carrie Conko of AcandS by Phone: 
202-973-1308


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