Document gnX4yE5YXKyyNkdJ0v2qxJjq

PLAINTIFF'S EXHIBIT B4 THE WALL STREET JOURNAL LAW - ...............- -- - -- Asbestos Victims Claim Buy-Out ~t V, Of Jim Walter Was Fraud Scheme $ Suit Says KKR Pact in '88 Was Designed to Shield Firm From Litigation By Wayne E. Green Stall Reporter s/Tiir WallSthret Jou*nal A group of asbestos victims filed suit al leging that the $2.44 billion leveraged buy out of Jim Walter Oo. was a fraudulent scheme designed largely to shield the com pany from mounting asbestos litigation. The suit filed In state court In Beau mont, Texas, names as defendants execu tives of Jim Walter and an Investment group led by Kohlberg Kravis Roberts & Co. The KKR group, which Includes Drexel Burnham Lambert Inc., completed the buy-out In January 1988. According to the lawsuit, the defendants devised the buy-out as a way to redlstribute Jim Walter's assets Into different companies in an attempt to protect the asyts fmm ashestns claims piling up against C Celotex Coral a Jim Walter unit that made asbestos products. The suit asks the court to declare the defendants responsible for some 80,000 claims alleging health damage or death from exposure to asbestos products made by Celotex. It contends the claims could exceed $3 billion. In addition, the plaintiffs are seeking an injunction to stop the sale of Jim Walter assets by Hillsborough Hold ings Corp., a new concern organized by the KKR group in connection with the Jim Walter buy-out. In a leveraged buy-out, a group of In vestors acquires a company In a transac tion financed largely by borrowing. Ulti mately, the debt is paid with funds gener ated by the acquired company's operations or sale of its assets. A spokesman for Hillsborough Holdings said the lawsuit Is similar to one filed in Texas by a different set of asbestos vic tims last January. That pending suit didn't specifically name KKR or Drexel, he said, but the allegations regarding the buy-out were essentially the same. Both the Hills borough spokesman and a spokesman for KKR said the accusations were without merit and would be fought. A Drexel spokesman said he hadn't seen the current complaint and couldn't comment. The plaintiffs In the latest lawsuit In clude two Individuals who say they have health problems from exposure to as bestos. A third plaintiff Is suing for the es tate of a person who died, the suit alleges, from problems caused by exposure. The plaintiffs are asking the court to certify the suit as a class action on behalf of the peo ple involved in 80,000 claims of personal in jury or wrongful death aealnst Celotex or yer who most recently defended former House Speaker Jim Wright against eithics charges in Congressional hearings. A part ner In the firm of Snsman Godfrey, be also has defended Nelson Bunker Hunt and Her bert Hunt In their highly publicized battles with major bank lenders several years ago. And he has won several big damage awards for plaintiffs in antitrust cases. Mr. Susman said he feels the lawsuit "will prove to be a landmark case." Companies that made asbestos, a min eral once widely used in piping and insula tion, have been battling damage litigation for years through a variety of legal strate gies. Manville Corp. tried to avoid mount ing suits by filing for protection from cred itors under Chapter IX of the U.S. Bank ruptcy Code, a controversial move that froze pending suits until a plan lor reor ganizing the company was worked out. Lone Star Unit to Fight Suit GREENWICH, Conn. -Lone Star Trans portation Co., a unit of Lone Star Indus tries Inc., said it will vigorously defend it self against a lawsuit brought by CSX Corp. In the suit, filed in federal court In Maryland, a unit of CSX, the Richmond, Va., transportation company, charged that concrete ties that Lone Star sold to CSX several years ago were aging prematurely. The suit requested damages of $7.5 mil lion. Lone Star, a maker of cement and other construction materials, said It believes that If it loses the suit. Its Insurance cover age Is adequate to protect it from any ma terial loss. Federal Election Agency Clears Gore's Use of Loans By o WallSthket JoukxalSIq// Reporter WASHINGTON-The Federal Elec tion Commission found nothing wrong with Sen. Albert Gore's use of largely uncollateralized bank loans totaling $1.6 million for his unsuccessful 1988 presi dential campaign. The Tennessee Democrat's borrow ings were questioned at the time by offi cials In the presidential campaign of Rep. Richard Gephardt (D.. Mo.). The loans helped finance Sen. Gore's vic tories In five so-called Super Tuesday primaries in March 1988. Federal elec tion law requires that bank loans to can didates be made only "on a basis which assures repayment," but Sen. Gore bor rowed mainly on the strength of pro jected contributions. The FEC sued the 1984 presidential campaign of Sen. John Glenn (D.. Ohio) after he was unable to repay bank loans. 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