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March 13, 2009 |
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ASBESTOS LITIGATION: Crown Cork Still Has 50T Claims at Dec. 31 Crown Holdings, Inc.'s subsidiary, Crown Cork & Seal Company, Inc., still faces 50,000 outstanding asbestos-related claims at Dec. 31, 2008, according to the Company's 2008 annual report filed with the Securities and Exchange Commission. Crown Cork & Seal, at Sept. 30, 2008, faced about 50,000 open asbestos claims, which excludes about 19,000 inactive claims. (Class Action Reporter, Oct. 31, 2008) Crown Cork is one of many defendants in a substantial number of lawsuits filed throughout the United States by persons alleging bodily injury as a result of exposure to asbestos. These claims arose from the insulation operations of a U.S. company, the majority of whose stock Crown Cork purchased in 1963. About 90 days after the stock purchase, this U.S. company sold its insulation assets and was later merged into Crown Cork. Prior to 1998, amounts paid to asbestos claimants were covered by a fund made available to Crown Cork under a 1985 settlement with carriers insuring Crown Cork through 1976, when Crown Cork became self-insured. The fund was depleted in 1998 and the Company has no remaining coverage for asbestos-related costs. During 2008, Crown Cork received 3,000 new claims and settled or dismissed 3,000 claims. During 2007, Crown Cork received 4,000 new claims and settled or dismissed 4,000 claims. During 2006, Crown Cork received 5,000 new claims and settled or dismissed 5,000 claims. The outstanding claims at Dec. 31, 2008 exclude 33,000 pending claims involving plaintiffs who allege that they are, or were, maritime workers subject to exposure to asbestos. The outstanding claims at Dec. 31, 2008 also exclude about 19,000 inactive claims. During 2008, the Company recorded pre-tax charges of US$25 million to increase its accrual, made asbestos-related payments of US$25 million, settled claims totaling US$15 million, including amounts to be committed to be paid in future periods, and had outstanding accrual of US$201 million at the end of the year. During 2007, the Company recorded pre-tax charges of US$29 million to increase its accrual, made asbestos-related payments of US$26 million, settled claims totaling US$15 million, including amounts to be committed to be paid in future periods, and had outstanding accrual of US$201 million at the end of the year. The Company estimates that its probable and estimable asbestos liability for pending and future asbestos claims and related legal costs is US$201 million at the end of 2008, including US$137 million for unasserted claims and US$1 million for committed settlements that will be paid in 2009. Historically (1977-2008), Crown Cork estimates that about one- quarter of all asbestos-related claims made against it have been asserted by claimants who claim first exposure to asbestos after 1964. However, because of Crown Cork's settlement experience to date and the increased difficulty of establishing identification of the subsidiary's insulation products as the cause of injury by persons alleging first exposure to asbestos after 1964, the Company has not included in its accrual any amounts for settlements by persons alleging first exposure to asbestos after 1964. Headquartered in Philadelphia, Crown Holdings, Inc. designs, manufactures, and sells packaging products for consumer goods. Products include steel and aluminum cans for food, beverage, household, and other consumer products and metal vacuum closures and caps. At Dec. 31, 2008, the Company operated 139 plants along with sales and service facilities throughout 41 countries and had about 21,300 employees. |
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