[LETTERHEAD OF L'ABBATE & BALKAN]
February 3, 1994
VIA TELECOPIER
Herbert W. Solomon, Esq. Mr. Frank Kellerman
Hollenberg, Levin, Solomon, Public Service Mutual
Ross & Belsky Liability Claims, 13th Floor
585 Stewart Avenue 132 West 31st St.
Garden City, NY 11530 New York, NY 10001
Mr. William Hattings Mr. Ray Gerapka
The Hartford Insurance American International
SEICO Claims Adjustment Company, Inc.
Hartford Plaza Toxic Tort Dept.
Hartford, CT 06115 6th Floor
80 Pine St.
Mr. Karl Zemgals New York, NY 10005
Home Insurance Company
4801 NW Loop 410 Ste 525 CNA Insurance Companies
San Antonio, TX 78229-5356 CNA Plaza
Chicago, IL 60685
Attn: Mr. Raymond Morrisroe
Re: Eastco Industrial Safety Corporation
Global Settlement - Amended Letter
-------------------------------------
Gentlemen:
As you know, we have been negotiating a settlement with the Wilentz,
Goldman & Spitzer ("Wilentz") firm for all pending cases and all future
filings against Eastco. Outlined below are the terms of the settlement for
both pending and future cases.
PENDING CASES
Currently, Wilentz has 1343 claims pending against Eastco. Wilentz has
agreed to dismiss 195 cases, without payment, where there is no powerhouse
exposure. The remaining 1148 cases involve claimants who have worked in
powerhouses where Wilentz asserts they can implicate Eastco. Under the terms
of the settlement, Eastco would pay $100 for each of the 1105 non-malignancy
cases and $300 for each of the 43 malignancy cases. Thus, the payments would
be as follows:
1105 non-malignancy cases at $100/case = $110,500
43 malignancy cases at $300/case = 12,900
--------
Total Payment = $123,400
========
FUTURE FILINGS
All future filings by the Wilentz firm can be settled within the same
parameters. Wilentz would continue to serve complaints upon Eastco in the same
manner. Eastco, however, would not have to attend any depositions which would
provide a substantial cost savings. Wilentz would then discontinue all cases
where the claimant had no powerhouse exposure. Eastco would pay $100 for each
non-malignancy filed and $300 for each malignancy filed.
We highly recommend this settlement proposal for both pending and future
cases. This is an especially advantageous settlement for future cases as we
can expect Wilentz to focus more and more attention on "small" defendants such
as Eastco, as the larger, more traditional defendants file for bankruptcy or
otherwise leave the forefront of litigation. By resolving the future filings
now, we can maintain Eastco's position as a peripheral defendant in the
litigation.
Mr. Morrisroe from CNA has already approved of the terms of this
settlement. We request that each of you notify us within ten days if you do
not wish to go forward with this proposal. If we do not hear from you, we will
assume there are no objections to the terms of the settlement and we will
finalize the settlement.
If you would like more information or would like to discuss this matter
further, please feel free to contact us.
Very truly yours,
L'ABBATE & BALKAN
/s/ Anna M. DiLonardo
--------------------------------
Anna M. DiLonardo
AMD:kk
[LETTERHEAD OF WILENTZ, GOLDMAN & SPITZER]
March 14, 1994
Donald L'Abbate, Esq.
L'Abbate & Balkan
1050 Franklin Ave.
Garden City, NY 11530
Re: New York Asbestos Cases
Eastco Industrial Safety Corp. Settlement
-----------------------------------------------
Dear Mr. L'Abbate:
This will confirm settlement with Eastco Industrial Safety Corp. Of 1,191
asbestos related personal injury claims for the total sum of $128,900.
Set forth on the attached Exhibit A is a list of the cases which are the
subject of this agreement, the diseases of each individual claimant and the
amount of each claimant's settlement with Eastco. Also set forth are those
claims in which we will be dismissing Eastco.
It is understood that your obligation to forward settlement proceeds for
any claimant is subject to receipt of medical confirmation that said claimant
has a diagnosis of mesothelioma, lung cancer, GI cancer, pulmonary asbestosis,
pleural thickening or pleural scarring. If for some reason we cannot
substantiate disease as to a particular claimant, settlement proceeds relating
to the claimant as set forth on the attached Exhibit A will be deducted from the
$128,900 total settlement sum. Similarly, if the disease turns out to be other
than as set forth on Exhibit A (i.e., someone listed
[LETTERHEAD OF WILENTZ, GOLDMAN & SPITZER -- 2ND PAGE]
Donald L'Abbate, Esq.
March 14, 1994
Page 2
as having cancer really has pleural thickening, and someone listed as having
pleural thickening really has cancer) the settlement amount for that person will
be adjusted to be in harmony with the amounts being paid to others with the same
disease.
Regarding Releases, our clients will execute the form of the Releases
attached hereto as Exhibit B.
We fully expect all plaintiffs to approve their settlement and to execute
Releases. It is understood, however, that if any plaintiff refuses to accept,
the total settlement amount will be reduced by the sum of money which was
negotiated for that claimant, as set forth in the attached Exhibit A. Again, we
anticipate no problems in this regard.
We plan to forward signed Releases and Stipulations of Dismissal by the end
of 1994. It is understood that we will expect to receive payment in full for
these cases within sixty days thereafter.
Regarding future cases in New York. In the event Wilentz is retained by
individuals who have a similar work exposure history to the plaintiffs in this
settlement, suit will be filed against Eastco but formal service of the
Complaint will not be made. Instead, we will mail a copy of the New York
Complaint to you. It is agreed that this will constitute full service upon
Eastco; however, no answer need be filed and no default will be entered.
Instead, on a six month basis, we shall confer and plaintiff shall present proof
of medical disease and resolve any questions regarding employment history.
Assuming similar work histories to current plaintiffs, and assuming further
that general conditions in asbestos litigation remain relatively static in terms
of bankruptcies and the like, Eastco agrees to offer and we agree to recommend
to plaintiffs acceptance of the sums listed on Exhibit A for a particular
disease and worksite. In the event a settlement is not consummated as to a
particular plaintiff, it is agreed that Eastco would then answer the Complaint,
raising no Statute of Limitations defense that could not have been raised at the
time the Complaint was filed with the Court.
[LETTERHEAD OF WILENTZ, GOLDMAN & SPITZER -- 2ND PAGE]
Donald L'Abbate, Esq.
March 14, 1994
Page 3
Unless I hear from you within five days, I will assume you have no problem
with the foregoing.
Thank you for your cooperation and courtesy in helping to bring about an
amicable resolution of these matters.
Sincerely,
/s/ Philip A. Pahigian
----------------------------
Philip A. Pahigian
PAP/mjc/aws/sfg/kd/mbd
Enclosures