Pfizer to settle asbestos claims for $430 Million

NEW YORK Sept. 3, 2004

Pfizer Inc. Friday said it has agreed to pay $430 million to settle all lawsuits against it alleging injury from insulation products made by a subsidiary. Pfizer and its Quigley Co. subsidiary were named, along with several other defendants, in 171,611 lawsuits claiming personal injury caused by exposure to asbestos, silica or mixed dust.

Pfizer acquired Quigley Co. in 1968. It sold some products containing asbestos until the early 1970s.Pfizer will establish a trust for the payment of pending claims as well as any future claims. It will contribute $405 million to the trust over 40 years through a note, and about $100 million in insurance. Pfizer will also forgive a $30 million loan to Quigley.

Since 1982, Quigley's main business has been to manage the asbestos lawsuits.

As part of the settlement, Quigley will file for Chapter 11 bankruptcy. Its reorganization plan must be approved by the bankruptcy court and confirmed by a vote of 75 percent of the claimants. Pfizer will take a $229 million charge in the third quarter for the settlement.

Analysts polled by Thomson First Call had expected the company to earn $4.08 billion, or 54 cents a share, in the third quarter. According to the Pfizer's report for the June quarter, its Warner Lambert unit still faced around 139,100 asbestos suits related to its former unit American Optical.

Pfizer spokesman Paul Fitzhenry said the American Optical claims haven't been financially significant so far, adding that Warner Lambert has substantial insurance.

"We continue to aggressively litigate the American Optical Claims while at the same time looking at options to resolve the litigation," Fitzhenry said.