Pfizer Inc and its wholly owned subsidiary, Quigley Company Inc have decided to resolve all pending and future claims against the companies.
Pfizer and Quigley has been named, along with numerous other defendants, in 171,611 lawsuits claiming personal injury allegedly caused by exposure to asbestos, silica or mixed dust.
Pfizer informed that it would take a third quarter pre-tax charge of $369 million ($229 million after-tax) in the in connection with these matters.
Under the reorganization plan, Quigley would file a Chapter 11 reorganization plan in the US Bankruptcy Court for the Southern District of New York that must be approved by the court and confirmed by a vote of 75 percent of the claimants. In connection with that filing, Pfizer has entered into settlement agreements with lawyers representing more than 80 percent of the individuals with claims against the two companies that provide for a total of $430 million in payments, an official release sates.
The reorganization plan will establish a trust for the payment of all remaining pending claims as well as any future claims alleging injury from exposure to Quigley products. Pfizer will contribute $405 million to the Trust over 40 years through a note, as well as approximately $100 million in insurance. Pfizer will also forgive a $30 million loan to Quigley.
If approved by the court, the reorganization plan will result in a permanent injunction directing all future claims alleging personal injury from exposure to Quigley products to the Trust.
"The steps we announced will, with court approval, establish a responsible and orderly process for the fair payment of these claims, while at the same time minimizing the costs, risks, and distractions of litigation that has spanned several decades," said Jeff Kindler, executive vice president and General Counsel, Pfizer.
Quigley was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s.