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March 13, 2009 |
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ASBESTOS LITIGATION: M&F Worldwide Incurs No Material Amounts M & F Worldwide Corp., as of Dec. 31, 2008, has not incurred and does not expect to incur material amounts related to asbestos- related claims not subject certain arrangements (Remaining Claims). The Company's non-operating contingent claims are generally associated with its indirect, wholly owned, non-operating subsidiary, Pneumo Abex LLC. Substantially all of these contingent claims are the financial responsibility of third parties and include various environmental and asbestos-related claims. As a result, the Company has not since 1995 paid and does not expect to pay on its own behalf material amounts related to these matters. In 1988, a predecessor of PepsiAmericas, Inc. (Original Indemnitor) sold to Pneumo Abex various operating businesses, all of which Pneumo Abex re-sold by 1996. Prior to the 1988 sale, those businesses had manufactured certain asbestos- containing friction products. Pneumo Abex has been named, typically along with 10 to as many as 100 or more other companies, as a defendant in various personal injury lawsuits claiming damages relating to exposure to asbestos. Under indemnification agreements, the Original Indemnitor has ultimate responsibility for all the remaining asbestos-related claims asserted against Pneumo Abex through August 1998 and for certain asbestos-related claims asserted thereafter. In connection with the sale by Pneumo Abex in December 1994 of its Friction Products Division, a subsidiary (Friction Buyer) of Cooper Industries, Inc. (now Cooper Industries, LLC, the "Friction Guarantor") assumed all liability for substantially all asbestos-related claims asserted against Pneumo Abex after August 1998 and not indemnified by the Original Indemnitor. In 1995, MCG Intermediate Holdings Inc. (MCGI), the Company and two of its subsidiaries entered into a transfer agreement (Transfer Agreement). The Transfer Agreement also requires MCGI to undertake certain administrative and funding obligations with respect to certain categories of asbestos-related claims and other liabilities, including environmental claims that Pneumo Abex did not transfer. Pneumo Abex's former subsidiary maintained product liability insurance covering substantially all of the period during which it manufactured or distributed asbestos-containing products. The subsidiary commenced litigation in 1982 against a portion of these insurers in order to confirm the availability of this coverage. As a result of settlements in that litigation, other coverage agreements with other carriers, payments by the Original Indemnitor and funding payments under the Transfer Agreement, all of Pneumo Abex's monthly expenditures for asbestos-related claims are managed and paid by others. New York-based M & F Worldwide Corp.'s Harland Clarke business makes checks and related products, forms, treasury supplies and related delivery and fraud-prevention services. Harland Financial Solutions provides lending and mortgage origination and servicing applications, business intelligence solutions, and customer management software for community banks and credit unions. Mafco Worldwide makes licorice extract, used for flavoring candy and tobacco products. |
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