March 28th, 2005

Swedish electrical giant, ABB, has revealed that two of its subsidiaries are to be rearranged in order to try and resolve the asbestos claims that are filed against it. ABB revealed the news on Monday, and plans to pay over $230 million into a trust fund in order to try and resolve claims. The plan put forward by the company aims to reorganize the Combustion Engineering and Lummus subsidiaries of the firm.

The compensation claims against ABB have been filed by those exposed to asbestos through its products, and the compensation battle has been going on for around ten years. ABB had previously petitioned to have the two subsidiaries in question included in an overall settlement plan of $1.2 billion, but this had been rejected by the appellate court.

The president of ABB, Fred Kindle, stated: "I am pleased that the cooperative efforts of the parties involved have resulted in a commonly agreed proposal for an amended plan in this short period of time. This agreement is a vital step towards a final resolution of our asbestos issue."

The sale of assets from the subsidiaries is to be used as part of the additional funding being injected in to the claim settlement kitty by ABB. Although the rising numbers of asbestos cases against the company nearly saw it face bankruptcy a couple of years ago, share prices have recently risen.