Halliburton ( HAL), the oilfield services giant formerly run by Vice President Dick Cheney, is reportedly negotiating a strategy to settle its asbestos liability by putting its engineering and construction units into a prepackaged bankruptcy proceeding. Such a move would represent an extension of other companies' use of Chapter 11 proceedings to resolve asbestos litigation and could set a precedent for other big firms with potential liabilities, including Honeywell ( HON) and Dow Chemical ( DOW). Under the plan, the subsidiary would enter bankruptcy protection then be used to fund a trust that would pay asbestos claims, while the parent company would still control the unit, possibly by buying back assets, according to The Wall Street Journal. A deal could be announced as early as Friday. Halliburton is in separate negotiations to channel asbestos lawsuits through a trust created by Harbison Walker, a former unit that filed for Chapter 11 in February. The new strategy would cover claims inherited from other businesses. The newspaper said it wasn't clear if the entire engineering and construction unit, which made up about $4 billion of the parent's $9.2 billion in revenue over 2002's first nine months, would be put in bankruptcy. Halliburton put the unit into a limited liability company in March in a possible prelude to its separation, however.