McDermott Gets Lifeline in Asbestos Verdict

Energy services firm McDermott International(MDR Quote) dodged more than a technical bullet this weekend when a court ruled it didn't have to return more than a half-billion dollars to a subsidiary facing huge asbestos liabilities, analysts said.

The ruling, by a federal court in New Orleans, suggests the company may be able to isolate the liability within its subsidiary, Babcock & Wilcox. Babcock, which used asbestos as an insulator in its industrial boilers, faces at least $1 billion in present and future claims, and filed for Chapter 11 protection in February 2000.

In an ongoing case, the court ruled Friday that McDermott did not have to return $622 million in assets to Babcock & Wilcox. The plaintiffs claimed that when B&W transferred the assets to its parent company in the summer of 1998, it was insolvent, making the transfer fraudulent. The court ruled otherwise. ...