December 14th, 2004

The Third Circuit Court of Appeals in Philadelphia has rejected the $1.2 billion settlement proposal put forward by an engineering group for asbestos settlements. The proposal was put forward by ABB on Friday, and the court’s decision to reject the figure came as a complete shock to both ABB company officials and to others. The court in Philadelphia has now stated that lower courts will have to renegotiate the figure.

Following the rejection of the settlement figure, ABB shares have plummeted by eleven percent, and the ruling is thought to have really set the company back. Claude Zehnder from Zurich Cantonal Bank said: “It is a harsh blow for ABB. We waited so long and now it has not been approved.” Mr Zehnder added that practically nobody had been expecting anything other than approval from the courts with regards to the proposed settlement figure.

Following the court’s ruling, ABB claims that all asbestos related claims will still be settled as quickly as possible, although a company official has stated that ABB cannot be any more precise than this. The settlement figure – when it is approves – will be making settlement payouts to 100,000 people that were affected by asbestos from the industrial boilers made by Combustions Engineering, which was then bought by ABB.