Court confirms Halliburton's DII Industries' reorganization plan

By Jeff Pines

Washington, July 19 - The reorganization plan for DII Industries, LLC, Kellogg Brown and Root Inc. and six other Halliburton Co. subsidiaries was confirmed Friday by the U.S. Bankruptcy Court for the Western District of Pennsylvania, Halliburton said in a Monday filing with the Securities and Exchange Commission.

The proposed plan calls for up to $2.3 billion in cash and 59.5 million Halliburton shares, valued at $1.7 billion, and notes for $500 million will go to trusts for asbestos and silica personal injury claimants.

The trust for asbestos claimants will get any additional insurance recoveries over $2.3 billion with a cap of $3 billion. Halliburton, however, does not expect to recover $2.3 billion from its insurers.

DII paid $311 million to asbestos and silica claimants in December 2003 to limit the cash needed to settle $2.775 billion in claims. Halliburton also agreed to pay $123 million in June. Halliburton said it expects to pay another $50 million in pending claims 30 days after the reorganization plan becomes final.

Halliburton has non-binding agreements with its insurers and expects to get $1.4 billion for its insurance receivables.

DII Industries and Kellogg Brown & Root filed for bankruptcy last December as part of a plan to resolve their asbestos- and silica-related liabilities.

Houston-based Halliburton provides services and products to the petroleum and energy industries.

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