Investors who purchased Halliburton stock between 1999 and 2001 filed a lawsuit in Federal Court seeking money damages. The complaint alleges that Halliburton’s CEO fraudulently underestimated Halliburton’s asbestos liabilities, overstated revenues and further overestimated the benefits of its1998 merger with Dresser Industries, Halliburton’s rival and a corporation with known asbestos related liabilities.
Asbestos, a naturally occurring mineral that includes chrysotile, crocidolite, tremolite, amosite, anthophyllite, and actinolite asbestos, causes serious diseases, such as mesothelioma, asbestosis, and lung cancer. People who have experienced an asbestos related injury can file a claim or lawsuit against manufacturers and companies responsible for the exposure to asbestos and sue for recovery of damages. The corporation that manufactured and supplied the asbestos or asbestos containing products then assumes “asbestos-related liabilities” related to such claims. Successors who purchase these companies often assume responsibility for these liabilities.
The Plaintiffs allege that when Halliburton finally corrected its estimates of their liabilities as well as benefits, the stock price dropped and lost nearly 80% of its value. Halliburton’s split off the Dresser division in 2001 forming Dresser, Inc. Dresser, Inc. purchased its equity back from Halliburton’s management and is now a separate entity. The plaintiff shareholders sought to have the case certified as a class action in federal court. Defendant Halliburton appealed the lower court’s certification.
In a blow to plaintiffs, the Appellate Court ruled in favor of Halliburton finding that plaintiffs could only get class action certification if they first proved by a preponderance of the evidence, that the alleged misrepresentations caused the stock price to fall, resulting in investor losses.” A very high standard. The Plaintiffs petitioned the U.S. Supreme Court to review Appellate Court’s decision.
Before deciding to review the plaintiffs’ petition, the Supreme Court had asked the United State’s Solicitors’ office last October to file a brief expressing the views of the U.S. Government. The Obama Administration agreed and filed a brief urging the court to review the case. The Administration believes that Plaintiffs should have the benefit of full discovery of the facts before the court requires them to prove an important element of their case at the class certification stage of the case.
Oral arguments are expected in May 2011 and a decision on the standard for class certification is expected as early June. The case is Erica P. John Fund, Inc. v. Halliburton Co., et al., Docketed May 19, 2010, Lower Court United States Court of Appeals for the Fifth Circuit Case No. (08-11195) Current docket No. 09-1403.
This entry was posted on Sunday, January 16th, 2011 at 6:51 am and is filed under Asbestos. You can follow any responses to this entry through the RSS 2.0 feed.
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