In the discussion thread: Rand Paul: Dick Cheney used 9/11 as excuse to invade Iraq for the benefit of Halliburton [View all]
Response to marble falls (Original post)
Mon Apr 7, 2014, 11:57 AM
JDPriestly (51,458 posts)
10. I disagree with Rand Paul on economic and other issues, but I think he is right about
Cheney's motive for going into Iraq -- Halliburton. Please note that this is just a possible theory. Not even Cheney can go back and reconstruct his thoughts or the range of his thoughts when considering attacking Iraq. But the war did produce a lot of revenue for Halliburton at a time when the company needed it.
Here is what may have been one part of Cheney's motive: While at Halliburton, Cheney had the company purchase or complete the purchase of Dresser Ind. which had huge liability for asbestos damages. Here are some articles on how that purchase imposed a lot of debt on Halliburton.
"Back in 1998, when he was CEO of oil-services giant Halliburton Co. (HAL), Vice-President Dick Cheney bought smaller rival Dresser Industries Inc. On Dec. 7, the deal exploded on his former company. When a little-known former Dresser subsidiary suffered defeat in a key asbestos litigation case, worried investors sent shares plunging 42%, to $12.
Halliburton was already well off its 52-week high of $45 because of falling energy prices. Now investors are scared the company is about to get eaten by the asbestos monster--the same one that bankrupted Johns Manville and Owens Corning. With their coffers empty, asbestos lawyers are now going after other companies such as Halliburton, Viacom (VIA), and Pfizer (PFE). Although none of them produced the flame retardant, all sold products containing it or bought companies with asbestos exposure.
. . . .
Halliburton is laying the blame for its woes on a predictable target: the runaway jury. The company says that from 1976 until this year, it settled 194,000 claims for an average of about $200 apiece after insurers chipped in their share. Then, this fall former Dresser unit Harbison-Walker, which marketed a variety of products containing asbestos, suffered four big losses in a row whose awards totalled $152 million.FEWER DEFENDANTS. These cases, for complex reasons, were not originally handled by Halliburton's litigation team. As a result, Lesar argues, they're anomalies. Over the long run, he says, the cost of the company's lawsuits will return to its long-term average. "There has been a huge overreaction to these events," explains the embattled chief.
Problem is, that's not the way asbestos litigation works. Pointing to earlier damage awards is all but useless because the liability keeps expanding. As more companies go bankrupt, the number of defendants left to make payments decreases. And under legal rules that are more concerned with compensating victims than protecting shareholders, a company with partial responsibility for a person's injuries can be held responsible for all of the damages. "Halliburton has been able to go under the radar without making big payments because we were focused on the other defendants," says Karl E. Novak, an attorney in Mount Pleasant, S.C., who brought one of the Texas cases. "Now that some of those other companies are bankrupt, people are starting to look more closely at Halliburton."ACE CARD? That's not the only reason attorneys will be looking at Halliburton in a different light. Trials are like focus groups: Opposing lawyers get to tell their stories and see which one jurors like better. Now that plaintiffs' attorneys have been successful at trial, others bringing suit won't accept cheap settlements.
Had he still been Halliburton's chief executive, Wall Street might have forced him to take responsibility for the asbestos problem he imported to his company. But because he wasn't around -- and because his successor, Dave Lesar, was a stand-up guy -- Cheney has largely escaped scrutiny for this fiasco.
Now that Halliburton has managed to extract itself from its asbestos liability by paying a ton of cash and stock to trusts that will compensate victims and their lawyers, we can get a handle on how much Dresser's piece of the problem cost Halliburton. It turns out to be almost as much as Halliburton paid for the company.
While Halliburton's all-stock takeover of Dresser was valued at $7.7 billion when it was announced in February 1998, it was worth only $5.3 billion when it was completed seven months later. The bankruptcy settlement is costing Halliburton just about that much: around $2.8 billion in cash, Halliburton stock with a market value of $2.3 billion the day before Dresser's bankruptcy was resolved and miscellaneous odds and ends and potential payments.
The bankruptcy resolution, which became final on Jan. 3, covered both the Dresser problems and the smaller asbestos problems that Halliburton already had.
Worth reading all of the Washington Post article if you are interested in this.
Recent news on this:
Halliburton Co. suffered a legal setback Monday when the U.S. Supreme Court refused to make it harder for shareholders to proceed with some class-action securities-fraud lawsuits against publicly traded companies.
The justices unanimously ruled that a U.S. appeals court erred in rejecting class certification in a securities fraud lawsuit filed in 2002 on behalf of all buyers of Halliburton stock between June 1999 and December 2001.
The high court reinstated a lawsuit by a group of mutual and pension fund investors who claimed the oilfield services company understated its asbestos liabilities while overstating revenues in its engineering and construction business and the benefits of its merger with Dresser Industries.
The alleged misstatements artificially pumped up Halliburtonís stock price, the lawsuit said, adding that the Houston-based company eventually made corrective disclosures that caused its stock price to fall.
. . . .
Dick Cheney and the giant energy company he will leave to run for vice president have contributed more than $150,000 to members of Congress who sponsored legislation that would limit the ability of workers to sue companies for asbestos exposure.
The Halliburton Co., an oil-field services company based in Dallas, and its subsidiaries have had about 273,300 suits filed against them since 1976 by workers suffering from asbestos-related disease. Many of those suits were filed before Cheney became chairman of the board and chief executive officer in 1995.
At the end of 1999, 107,650 suits for damages were still pending, including 46,400 new suits filed against the corporation last year, according to the firm's annual report filed with the Securities and Exchange Commission.
Cheney, 59, says he will resign Aug. 16 to concentrate on the Republican campaign.
We'll never know the truth about the motivations for going into Iraq, but they may have been more complex than we generally realize and may have included the "noble cause" of bailing out Halliburton and its investors.
Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
|marble falls||Apr 2014||OP|
|marble falls||Apr 2014||#11|
|marble falls||Apr 2014||#24|
|marble falls||Apr 2014||#21|
|Roy Rolling||Apr 2014||#20|
|marble falls||Apr 2014||#5|
|mountain grammy||Apr 2014||#6|
I disagree with Rand Paul on economic and other issues, but I think he is right about
|marble falls||Apr 2014||#15|
|marble falls||Apr 2014||#23|
Please login to view edit histories.