U.S. Water News Online
WASHINGTON -- A unit of American International Group Inc., the world's largest insurer, has agreed to pay $42.5 million to clean up hazardous waste sites in three states.
The American International Specialty Lines Insurance Co. Inc. agreed to pay an initial $30 million payment and 10 annual payments of $1.25 million to the Fruit of the Loom trusts to clean up contamination at four sites in Michigan, New Jersey and Tennessee.
The sites were owned by Fruit of the Loom, which filed for bankruptcy in 1999 and was acquired in 2002 by billionaire Warren Buffett's Berkshire Hathaway Inc. The court set up two trusts to receive and distribute the company's remaining assets, including its environmental insurance policies. The trusts tried to collect environmental cleanup costs from the AIG unit under an insurance policy that covered response costs and natural resource damages.
But American International Specialty Lines Insurance denied coverage and then filed suit seeking to confirm that it was not obligated to pay the trusts, according to the Justice Department, which intervened in the case on behalf of the Environmental Protection Agency and other agencies.
"Insurers should take note that they may be liable for the cost of cleaning up their bankrupt clients' environmental messes," Granta Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance, said in a release.
Michael Arcaro, a spokesman for New York-based AIG, said the company was "pleased to bring this matter to a conclusion on terms that are mutually agreeable to all the parties involved."
The three largest sites in St. Louis, Mich., Bergen County, N.J., and Toone, Tenn., each will receive more than $12.5 million for environmental cleanup and restoration activities. The Breckenridge, Mich., site will receive $2.1 million.
The settlement, which is subject to a 30-day public comment period, resolves the 2005 lawsuit between American International Specialty Lines Insurance and the two bankruptcy trusts.
Shares of AIG rose 93 cents, or 1.7 percent, to $56.4.
Return to the U.S. Water News Archives page Or Return to the U.S. Water News Homepage
Editor@uswaternews.com
*Your Name:
*Your Email:
*Friend's Email:
Use a comma to separate e-mail addresses:
*Your Comments:
Hi, I thought you might like to read this article.
*Required Fields