Updated from 1:44 p.m. ESTHalliburton ( HAL) agreed to settle all pending and future asbestos claims against it by funding a trust with cash, stock and notes worth more than $4 billion. Halliburton's engineering and construction units, DII Industries and Kellogg, Brown & Root, will make a prepackaged Chapter 11 bankruptcy filing and the company will fund a trust that would cover the roughly 300,000 asbestos claims Halliburton faces. Halliburton Co., Halliburton Energy Services and most other subsidiaries will remain out of bankruptcy and continue to control DII and KBR. The plan envisions establishment of a trust under the so-called 524(g) provision of the bankruptcy code. That section lets a bankruptcy court issue an injunction barring future plaintiffs from filing asbestos suits against the reorganized company. Such trusts must generally be vested with more than half the company's total assets. The units covered by the bankruptcy filing will retain rights to the first $2.3 billion of any insurance proceeds Halliburton receives. Most of Halliburton's asbestos liability stems from the 1998 acquisition of Dresser Industries for $7.7 billion. Vice President Dick Cheney ran Halliburton at the time of the purchase. Plaintiffs will have to approve the chapter 11 reorganization plan and the final court ruling must be non-appealable, Halliburton said. Halliburton said that upon receiving final court approval and sufficient financing, up to $2.8 billion in cash, 59.5 million Halliburton shares and $100 million in notes will be paid to benefit all current and future claimants. All existing contracts and obligations with customers, vendors and employees will be honored and creditors will be paid in full. Halliburton shares were recently trading on the New York Stock Exchange at $20.80. "The agreement will allow Halliburton and KBR to remain financially strong and maintain their competitive position," said Dave Lesar, the company's president, chairman and chief executive, in a prepared statement. "Outside of the global asbestos settlement, it will be business as usual while the plan is implemented." The company expects to file the plan in the first quarter of 2003.