Document npjZKYjaqjy2Vg6N3Jm2V7J32

3 r>, 1977 Cooper:; < Lybrand 23 9 C Prudential Plaza Denver, Colorado 1:0 20 2 Gen i i om-e:.; : 5 :i ; - i' c.f January 31 , 1977 and A; ril 19, i- ` _ p;: -..-..t li litigation and contingent liabil ities or affecting Johns-?'.aaville Corporation and its consolidated Lnitc-d States subsidiaries 'the "Company"). I have examined the files of the Ge leral Counsel's office as to the matters refcried to in such .etters and as to matters of a similar nature occurring since April 19, 1977. Dis cussed below, in sumary form, arc (i) material changes occurring to the date hereof in thoso matters set forth in the above described letters and (ii) those matters arising sinco April 19, 1977, and containing claims of 5500,000 or more. A, C.nimr> Ar.d Actions f.'ccupatio:irt L Health Cases - As of July 12, 1977, the Conpanv was a defendant or a co-defendant in 392 cases a ioging damage to the health of in sulation wo;hers or other persons exposed to asbestos fiber or asbestos-containing products manufactured or sold by the Company and in most rases, cert'in other defendants. The cases di s.:ribed ii sub-paragraph (a) below are included m u;e 39 2. bince April 19, 1977, the following occupational health caaer have been disposed of: ') T 7) V'V t 6 2 t> IJagu 2 Coopers fc Lybrand Case 1977 Lt'ava Amount of Settlement or Verdict J-M's Share $36,000 $4,000 (a) Dr. Kent t'iso and Dr. David wine Cases - As reflected in my letters of January 3l, 1977 and April 19, 1977, the Trial Court had nustained the Company's demurrer to the plaintiff Browner'b complaint as to all of his causes of action against .Tohnn-Manville. Tne plaintiff thereafter filed an amondod roinpLilnt. naming Johna-Munvll.lo Sales Cor poration and Canadian Johna-M mvll le ns defendants. His theory in the amended complaint was that Johns-Manvillo Products Corporation is entitled to the worker's compensation defense but the fiber supplier, Johna-Manville Soles Corporation and Canadian Johns-Manville are not. The Company chal lenged this theory on the grounds that the defense applies to the entire corporate structure of Johns-Manvillo. The trial sustained- tills general demurror to the amended complaint. It is uncertain at this time whothor the Court will allow the plain tiff to amend his complaint a aecond time. Klextran - Customer Claims - Since my letter of April 19, l'.'1)'}, two additional ricxtran customer claims have been settled. These two claims arc Nassau Bay, Texas and Quail Valley Utility Dis trict, houston, Texas. Each of those cases was included In the second category of claims which were tho subject of pending litigation at that time. Those cases have now beer settled, Nassau Bay for $20?,300 and Quail Valley for $245,000. Accordingly each should be moved from the "Second Category" to the "Pirst Category". T; is raises tho total paid out of the losa contingency to $1,435,000 ^caving a balanco of $2,665,000. It is ny opinion *;hat the original i.ose contingency of $4, 100,000.;J0 as established veroains appropriate and sufficient. 1\ <! II li "O' I -i A 7 I'm go 3 } Coopers u Lybrand 3. Polychrome Corporation vs. JohnG Kanvlllc - 'This is a new case arising in Yonkers, New York and allegedly involving a defective built-up roof. The plaintiff alleges damages in the amount of v1, bOO, 000. It is expected that any damage for which the Company might be found liable will be adequately covered by insurance maintained by the Company. 4. Tucker vs. Jaffe Insulation et al - This is a new case arising in Now York ;.n which the plaintiff was allegedly injured whon the scaffold on which ho was standing collapsed. The plaintiff is nooking damages of 51,100,000 and alleges the collapse was duo to negligence cf the defendants including tic Company. It is expected that any damages for which the Company might be found liable will bo adequately covered by insurance maintained by the Company. I,. Ccramlte, Inc, and Iion-Ketallic Metals Corporation PN of America vs. Johns-Many: lie r.ale3~Corporation e~t al This is a now case in htato Court i.i Los Angeles, California *md arising out of negotiations between the plaintiffs and J-M for the sale of J-M's Western Talc- business. After approximately one year of work, negotiations were suspended. The plaintiffs l avo sued J-M for specific performance and tor $000,000 damages. The Company believes it has substantial defenses to all claims by the plaintiffs and thus the suit will not materially adversely at feet its financial position. 0. First Mational C-tate Think of Mow Jersey v. Johnr>-"arville Corporation- This is a new case'filed in The Superior Coif:t for Essex County, l.'ow Jersey and arising out of the lease by the Company of certain communication equipment from Wiltok Leasing, Inc. The claim by the Hank is for the Company's failure to make lease pay ments to the hank as assignee of the Lease in volved. The equipment involved was either never received by the Company or never installed. The hank claims the position of a good faith holder of tho Lease not subjoct to such defenses. The Hank seeks damages totaling approximately 5600,000. Tho case is in the very early stigec with no {F* discovery completed to dato. ii) v; 'i TJur? 4 Coopers i LybranJ ii. Ii.iijrar.co Coverage 1 . w;, l1, 1977, the Company rrviBod ita insurance oovi.t.v-: . A ', of that date, with respect to claims .lil'Mlini liability for products and completed operat: oi.s the Company increased its self-assumption of losses from ?3.5 million to 9>.0 million per year.. Above this level, insurance is provided by an umLiolla policy. Cor::ain other changes in tho Co::pane's insurance program were also mado. Further information on tho insurance coverago may ;. obta ir-od from the flanager of insurance. c. ether flatters - There are no .egal proceedings ponding or to the best of my knowledge, threatened against Cohns-Kanville 1971 executive Incentive Plnnor the i-mployoa Thrift Stock Plan. Very truly yours, !>.. n. Vcn bald Ar.sintart General Counsel P.LWJ/cgp