The Travelers Companies, Inc. has announced a settlement with ACandS Inc. to resolve all current and future asbestos-related coverage claims. ACandS, an insulation contractor, has been undergoing Chapter 11 reorganization since 2002, and its bankruptcy counsel has described the Travelers insurance coverage as “the most important asset of ACandS’s bankruptcy estate.”
The settlement plan, which is subject to final court approval, would end uncertainty about the extent of “one of [Travelers’] most significant and longest-standing asbestos exposures,” according to Jay S. Fishman, the insurer’s Chairman and CEO. In January 2006, Justice Samuel Alito, then a Judge on the Third Circuit Court of Appeals, described that exposure as “potentially unlimited.”
The plan involves a contribution of $449 million to a trust established pursuant to ACandS’s plan of reorganization. Travelers reportedly expects to cede about $84 million of that to its reinsurers.