Halliburton Still Haunted About Misrepresenting Asbestos Liability
A group of past and present Halliburton shareholders filed a legal brief this week with the 5th Circuit Court of Appeals in Texas, asking that the company’s latest efforts to minimize its asbestos liabilities be rejected.
The brief, according to a Reuters News & Insight Report, stems from an original federal securities class action suit brought by a group of shareholders who purchased common stock of the Halliburton Company from June 3, 1999 through Dec. 7, 2001. They contend that Halliburton intentionally misrepresented its exposure to future asbestos liability.
Halliburton repeatedly has tried to block the certification of the asbestos class action, contending that shareholders have not proved the subsequent drop in stock price was tied directly to the misrepresentation of asbestos. Its latest attempt came earlier this month.
Halliburton’s stock price dipped dramatically several years ago when the company made disclosures to correct its previous statements about asbestos, but after the shareholders of the suit had made their purchases.
Halliburton Paid $5 Billion
Halliburton paid almost $5 billion in 2005, according to the Washington Post, as part of a reorganization plan to settle an estimated 400,000 asbestos and silica liability claims, most stemming from its earlier and ill-fated purchase of Dresser Industries, Inc. for $7.7 billion in 1998.
The purchase of Dresser came under CEO Dick Cheney, who later was elected Vice President under George H.W. Bush. It was during Cheney’s tenure as VP that Halliburton won multi-billion contracts in Kuwait and Iraq to provide a variety of services for U.S. troops, later attracting an investigation of alleged over-billing and favoritism because of Cheney’s past.
Halliburton is a multi-billion dollar energy services conglomerate with operations in more than 70 countries. It has hundreds of divisions and subsidiaries worldwide. It is based in both Houston, where it is incorporated in the U.S., and in Dubai.
The shareholder brief contends Halliburton already has had its asbestos efforts rejected five times in court, twice before a U.S. District judge, twice at the 5th Circuit Court in Texas and once by the United States Supreme Court.
Halliburton: No Distortion
Halliburton contends that in previous appeals it produced evidence that the alleged misrepresentation of asbestos did not distort market price of the stock, which would have rebutted the class certification.
Those contentions were rejected. Shareholders still contend that they were misled about Halliburton’s financial state at the time of purchase, which constitutes a violation of the Securities Exchange Act.
The case still is pending.
“Halliburton has every right to try to take another bite out of the apple,” attorney Neil Rothstein, who represents the plaintiffs, told Reuters News & Insight. “But perhaps they’re just trying to postpone the inevitable a trial on the merits of our claim.”
Asbestos is the cause of a myriad of respiratory illnesses, including asbestosis and mesothelioma cancer. It is the subject of the largest class-action tort in U.S. history.
There is an estimated $36 billion in a combined 60 asbestos-liability trusts from companies that are no longer in existence.