The US Senate dealt a blow to the hopes of companies suffering from compensation claims for asbestos-related health problems when it voted late on 14 February 2006 to block legislation that would crea…
The US Senate dealt a blow to the hopes of companies suffering from compensation claims for asbestos-related health problems when it voted late on 14 February 2006 to block legislation that would create a USD 140 billion compensation fund for asbestos victims. Owens Corning and W.R. Grace led a group of industrials shares which fell on 15 February 2006 as the market reacted to the news. The proposal for a government plan to help companies cope with asbestos liabilities follows years of litigation that has cost US industry an estimated USD 80 billion and driven nearly 100 companies, including Owens Corning, into bankruptcy. “Failure to waive the budget point of order against the legislation … will be perceived as a negative for asbestos-exposed companies, although the hope that the legislation would reconsider based on comments from Senator Frist and bill sponsors may linger,” said Susquehanna Financial Group analyst Crystal Skinner. Any hope that the bill could eventually pass was not reflected in the share prices of bankrupt companies with the most exposure. Owens Corning plummeted 35% to USD 2.59.