One of the world’s largest pharmaceutical companies is trying to shake its liability for billions of dollars worth of asbestos injury claims.
Our Boston mesothelioma attorneys know that the claims stem from Pfizer’s subsidiary, Quigley Co., which has been long-defunct, yet is seeking protection from further liabilities through a federal Chapter 11 bankruptcy plan, which has already been confirmed by a New York bankruptcy judge.
That judge overruled objections from a host of personal injury plaintiffs who say that this effort is just the latest in a litany of efforts by Pfizer to shield itself from having to pay for damages its subsidiary caused.
Pfizer has said it can’t be held accountable for damages caused by Quigley products, primarily asbestos-laden insulation that was used in steelmaking and blast furnaces. Pfizer acquired the company in 1968 under its now-defunct minerals, pigments and metals division and Quigley continued to make asbestos-containing products through the 1970s.
In the early 1990s, asbestos litigation against Quigley began to mount. As a result, Quigley sold all of its assets in 1992 in order to focus on its liabilities, meaning it was no longer a functioning company. Some 160,000 cases were pending at that time, and the number has continued to grow.
In 2004, both Pfizer and Quigley resurrected the company for the sole purpose of filing for a Chapter 11 bankruptcy that would establish a trust and protect them both from future claims. Pfizer initially agreed to pay a total $430 million to those claimants who were willing to settle. That amounted to about 80 percent of those claimants. Half of that was to be paid in 2005 and the rest once Quigley’s plan was formally confirmed.
However, that confirmation has continued to drag on. Part of the problem is that asbestos plaintiffs say that amount is not enough to satisfy all the pending and future claims against the company. What’s more, Quigley’s bankruptcy, they say, is being improperly used by Pfizer to avoid its own liability.
The New York judge’s decision would have Pfizer paying upwards of $964 million. About $100 million of that would come from insurance.
However, by some estimates, Quigley could face liability claims of nearly $4.5 billion over the next 40 years. What that means is that asbestos claimants would have fared far better on the whole had they chosen to sue the company individually through civil tort law. Once the trust is established, the company can no longer be sued for those claims, which are all subsequently directed to the trust.
Pfizer has paid some $1.25 billion to groups of asbestos plaintiffs outside of the bankruptcy process.
All of this may sound like a great deal of money. But for a company like Pfizer, it is truly a drop in the bucket. While we don’t have exact figures for its total annual revenues, consider that in 2009, Pfizer purchased a rival drug company for $68 billion. It invested $8.1 billion in research and development in 2007 alone. It’s total assets are believed to be in the neighborhood of $186 billion.
If you or a loved one is diagnosed with mesothelioma in Boston, call for a free and confidential appointment at (617) 777-7777.
The Daily Docket: Pfizer on Track to Shake Quigley Asbestos Claims, July 15, 2013, By Melanie Cohen, The Wall Street Journal
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Garlock and Asbestos Creditors Prepare for Liability Trial, July 10, 2013, Boston Mesothelioma Lawyer Blog