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March 13, 2009 |
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ASBESTOS LITIGATION: Coca-Cola Still Disputes Aqua-Chem Demands The Coca-Cola Company still disputes former subsidiary Aqua- Chem, Inc.'s (n/k/a Cleaver-Brooks, Inc.) claims over Aqua- Chem's demands for about US$10 million for out-of-pocket asbestos litigation-related expenses. During the period from 1970 to 1981, the Company owned Aqua- Chem. A division of Aqua-Chem manufactured certain boilers that contained gaskets that Aqua-Chem purchased from outside suppliers. Several years after the Company sold this entity, Aqua-Chem received its first lawsuit relating to asbestos, a component of some of the gaskets. In September 2002, Aqua-Chem notified the Company that it believed the Company was obligated for certain costs and expenses associated with its asbestos litigations. Aqua-Chem demanded that the Company reimburse it for about US$10 million for out-of-pocket litigation-related expenses. Aqua-Chem also demanded that the Company acknowledge a continuing obligation to Aqua-Chem for any future liabilities and expenses that are excluded from coverage under the applicable insurance or for which there is no insurance. The parties entered into litigation in Georgia to resolve this dispute, which was stayed by agreement of the parties pending the outcome of litigation filed in Wisconsin by certain insurers of Aqua-Chem. In that case, five plaintiff insurance companies filed a declaratory judgment action against Aqua-Chem, the Company and 16 defendant insurance companies seeking a determination of the parties' rights and liabilities under policies issued by the insurers and reimbursement for amounts paid by plaintiffs in excess of their obligations. During the course of the Wisconsin coverage litigation, Aqua- Chem and the Company reached settlements with several of the insurers, including plaintiffs, who have or will pay funds into an escrow account for payment of costs arising from the asbestos claims against Aqua-Chem. On July 24, 2007, the Wisconsin trial court entered a final declaratory judgment regarding the rights and obligations of the parties under the insurance policies issued by the remaining defendant insurers, which judgment was not appealed. The judgment directs that each insurer whose policy is triggered is jointly and severally liable for one-hundred percent of Aqua- Chem's losses up to policy limits. The Georgia litigation remains subject to the stay agreement. Headquartered in Atlanta, The Coca-Cola Company manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups in the world. The Company markets four of the world's top five nonalcoholic sparkling brands, including Diet Coke, Fanta and Sprite. |
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