(Corrects headline and first paragraph to show Travelers won reversal of an order to pay asbestos claims.)
March 1 (Bloomberg) -- Travelers Cos.’ appeal of a 2011 ruling in the bankruptcy case of Johns Manville Corp., seeking reversal of an order to pay asbestos victims about $500 million, was granted in federal court in New York.
“It was error to require Travelers to make the settlement payments,” U.S. District Judge John Koeltl wrote. “The judgment must be reversed.”
U.S. Bankruptcy Judge Burton Lifland in Manhattan said in his 2011 ruling that the dispute had gone on too long, “especially for those asbestos victims who have yet to be fully compensated.”
Johns Manville, once the nation’s largest asbestos maker, filed for bankruptcy in 1982. In June 2009, the Supreme Court overturned a ruling that allowed suits against units of Travelers by people harmed by exposure to asbestos.
“Just as the Supreme Court has barred parties from bringing suit against Travelers based on the plain language of the 1986 orders, Travelers should likewise be bound by the plain language of the settlements, and should be compelled to comply with its payment obligations,” Lifland wrote.
Travelers said an unmet condition of the agreements was that settlement lawyers in Hawaii show that the plaintiffs had dismissed all claims against the insurer. The company also said the bankruptcy court made a mistake in calculating interest.
The bankruptcy case is In re Johns Manville Corp., 82-11656, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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