There will be no deal Friday between

Halliburton

(HAL) - Get Report

and the thousands of individuals who've filed asbestos-related claims against the big oil-services company.

Speculation was rife that a deal to resolve more than 300,000 pending claims would be announced at a bankruptcy court hearing. But the hearing, at Halliburton's request, was postponed to next Wednesday to give the company and trial lawyers more time to negotiate.

Shares of Halliburton were largely unchanged on the news of the delay. The stock was recently down 25 cents, or 1.25%, to $19.75. A year ago, the company's stock fell as low as $12 a share after a jury ordered the company to pay $30 million in damages in an asbestos case.

The rough parameters of the deal are well known and have been confirmed by Halliburton and some of the trial lawyers. Among other things, a $4 billion trust would be set up to pay the claims, with Halliburton contributing $2.8 billion in cash and 60 million shares of company stock.

It's not known exactly what's causing the delay, but the deal is complex and might require Halliburton putting its engineering and construction units into a prepackaged bankruptcy proceeding. The deal, however, would enable Dallas-based Halliburton to avoid filing for bankruptcy and resolve a thorny litigation issue that has been a major drag on its stock.

One potential stumbling block in the negotiations could be a potential split in the ranks of the trial lawyers bringing the suits against the company.

Most of the pending claims against the company have been filed by former employees of Halliburton's Harbison-Walker unit, who have not yet developed any symptoms of asbestos-related cancer but fear they might in the future. And it's lawyers for that group of litigants who have been leading the negotiations with the company.

But lawyers who represent a smaller group of people who already have contracted mesothelioma--a particularly deadly form of asbestos-related cancer -- are not happy with the direction of the negotiations.

One of those lawyers, Peter Kraus, said he's pulled out of the negotiations and is considering opposing the settlement unless it provides better payment for his clients. He said the deal being discussed now is substantially different than a more generous plan that was being discussed during the summer.

Any deal would have to approved by the judge overseeing the Harbison-Walker bankruptcy proceeding and it could be subject to challenge by individuals who object to the terms.

Halliburton's asbestos headaches are a leftover curse from the days when Vice President Dick Cheney was at the helm. At one time, Cheney's ability to steer a Halliburton merger with Dresser Industries was considered the high point of his career. But since then, Dresser has become something of an albatross, carrying with it huge asbestos-liability exposure from Harbison-Walker.

It's in Halliburton's interest to reach a deal with the plaintiffs because its insurers will be responsible for much of the cash payout.

It's not known which property and casualty firms issued coverage to Halliburton. But commercial insurers such as,

American International Group

(AIG) - Get Report

and

Travelers Property & Casualty

(TAPA)

, previously have reported having potential exposure to asbestos cases against their corporate customers.

However, insurance experts say a settlement in the Halliburton cases probably will have little impact on the earnings of the insurers that are forced to fund the trust. That's because many of the insurers have been building up their reserves to pay for the claims.

"This is not new news to any of the insurers,'' said Todd Bault, an insurance analyst with Sanford Bernstein. "They have been involved in the negotiations. Settlements like these are expected.''

The potential deal in the Halliburton cases, meanwhile, comes at a time that other companies are looking to settle other asbestos cases. Earlier this week,

Honeywell

(HON) - Get Report

reported it is close to deal that would resolve some 190,000 pending claims.