CGM , AIG ,,, Congoleum Reaches Asbestos-Related Deal
Thursday May 12, 5:52 pm ET
Congoleum Reaches $103 Million Asbestos-Related Payout Deal With AIG Insurers
MERCERVILLE, N.J. (AP) -- Congoleum Corp., a maker of flooring products for residential and commercial use, on Thursday said it reached a settlement agreement with one of its insurance carriers over coverage for $114 million of asbestos-related claims.
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The company -- which in 2003 filed for bankruptcy to resolve claims related to the use of asbestos in its products decades ago -- said it reached a settlement with certain American International Group Inc. companies. The agreement calls for the insurers to pay $103 million over 10 years to a trust to be formed when Congoleum's proposed reorganization plan is confirmed.
The settlement resolves coverage obligations of policies with a total of $114 million in liability limits for asbestos bodily injury claims, and is subject to final court approval.
"This agreement, together with a previously announced $15 million settlement and the expected contribution from Congoleum, will provide the resources to pursue insurance coverage from other carriers through litigation where necessary and will permit the trust to be formed upon Congoleum's reorganization to begin the payment of allowed claims immediately upon confirmation," said Congoleum Chairman Roger S. Marcus in a statement. "We believe this represents another major step forward in our journey to put our asbestos exposure behind us."
Shares of Congoleum fell 20 cents, or 5.3 percent, to close at $3.60 on the American Stock Exchange.
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