ABB's Deal Still on Track Even if Motion Not Heard 
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Published April 11, 2003


The Swiss engineering group's $1,200,000,000 settlement of asbestos 
injury claims is still on track, according to asbestos legal experts 
after a motion to change the members of the creditors committee of a 
bankrupt ABB unit was not heard on April 7.

Along with its bankrupt unit Combustion Engineering Inc., ABB Ltd. 
(NYSE: ABB), wants to close the settlement in order to allay lingering 
fears about possible spiraling liabilities.  The company said that it 
was confident the deal would go on as planned.

"The settlement is still on track. Though I am not part of these 
discussions, I know progress has been made between the creditors and 
the company," said David Austern, who has been appointed to represent 
future Combustion Engineering claimants.  Austern is also general 
counsel to the Manville Personal Injury Settlement Trust, an asbestos 
bankruptcy trust.

David Bernick, a lawyer for ABB, said the hearing scheduled was 
continued, not because of delay, but because of progress made between 
Combustion Engineering and the creditors committee.  "The anticipation 
is that the motion will not have to be heard because of progress made," 
said Mr. Bernick, who would not provide any details on the discussions.

The US Bankruptcy Court for the District of Wilmington was scheduled to 
hear the motion on Monday.  A hearing will be held on April 18 to 
discuss certain issues of the confirmation plan.  The principal 
confirmation hearing will be held April 24, Mr. Bernick said.

Combustion Engineering, which made industrial boilers insulated with 
asbestos, filed for bankruptcy Feb. 17, along with a pre-negotiated 
reorganization plan to deal with millions of dollars in asbestos-
related personal injury claims.

The company had asked the bankruptcy court to reconfigure the 
committee, saying the bulk of the members did not reflect the wishes of 
the majority of the creditors.  The committee had wanted more time to 
investigate whether settlement agreements between Combustion 
Engineering and certain claimants tainted the voting process on the 
reorganization plan.  It also wanted to probe the transfer of some of 
the unit's assets to affiliates in 1999.

Under Combustion Engineering's proposed plan, parent company ABB would 
put up the unit's assets of $800,000,000, as well as $350,000,000 in 
cash and $50,000,000 in stock to settle more than 100,000 personal 
injury claims.  Combustion Engineering has no current operations, but 
has real estate assets.

ABB bought Combustion Engineering in 1990 during an acquisition spree 
that caused many of its current debt problems.  ABB is now focusing on 
power and automation technologies in an effort to return to 
profitability after a $787,000,000 loss last year and wants to cut its 
total debt to $6,500,000,000 by the end of 2003 from close to 
$8,000,000,000 at the end of 2002.

Asbestos was widely used for fireproofing and insulation until the 
1970s, when scientists concluded that inhaled fibers could be linked to 
cancer and other diseases.

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