General Motors, Ford and DaimlerChrysler have filed a lawsuit to block Honeywell International Inc. from selling its Bendex brake unit to bankrupt Federal Mogul Corporation. The automakers accuse “Honeywell of trying to avoid its asbestos-related obligations,” Reuters reported.
Honeywell is attempting to avoid its asbestos-related liabilities by selling its Bendix brake unit, which faces about 47,000 asbestos cases. Federal-Mogul filed for Chapter 11 protection in October 2001 to resolve about 360,000 asbestos lawsuits and future asbestos claims, by establishing a trust to pay victims. Federal-Mogul is expected to “emerge from bankruptcy free of asbestos liabilities,” Reuters reported.
“Bankruptcy protection cannot be bought and sold. Federal-Mogul’s and Honeywell’s unprecedented attempt to do so would violate federal and state law, be unfair to thousands of asbestos claimants and inappropriately shift litigation costs to the automakers,” David Sykes, attorney with Duane Morris, which is representing the carmakers, said in a statement.
(via Reuters)
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