Court Approves $535 Million Berkshire Deal Over Talc Asbestos Claims

what happened

Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, has signed off on a $535 million agreement that resolves asbestos-injury liabilities linked to a former Berkshire Hathaway affiliate and its ex-talc supplier Whittaker Clark & Daniels, according to the Wall Street Journal. Representatives of injured claimants argued the amount was too low and that the independent directors who negotiated it had ties to Kirkland & Ellis, the law firm handling Whittaker's bankruptcy. The judge rejected those objections and found no proof of undue influence over the directors.

In a separate decision, the court also cleared a $16.5 million environmental accord that Whittaker reached with federal and state regulators. The step removes a final regulatory obstacle to the company's chapter 11 reorganization plan. National Indemnity is funding the payment, and the accord covers legacy pollution at five sites in California and Montana, including a Superfund location in Billings.

why it matters

For Berkshire, the ruling reduces uncertainty around talc-related asbestos lawsuits that have multiplied in recent years and strained its insurance business, where premiums are meant to cover future payouts. The settlement is far below the up-to-$5.3 billion value claimants' experts placed on the claims, so investors may watch for appeals.

market impact

Berkshire Hathaway: less uncertainty over asbestos suits, supporting confidence in its insurance business

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