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Hazardous Waste Contamination

Washington, DC: (Jan-09-08) The US Environmental Protection Agency and other agencies brought charges against a unit of American International Group Inc., the world's largest insurer, over clean up costs associated with hazardous waste sites in three states. Sources close to the case stated that the company agreed to pay $42.5 million to resolve allegations. Under the deal, American International Specialty Lines Insurance Co. Inc. agreed to pay an initial $30 million payment and 10 annual payments of $1.25 million to the Fruit of the Loom trusts to clean up contamination at four sites in Michigan, New Jersey and Tennessee.

Records show that the sites were owned by Fruit of the Loom, which filed for bankruptcy in 1999 and was acquired in 2002 by billionaire Warren Buffett's Berkshire Hathaway Inc. The court set up two trusts to receive and distribute the company's remaining assets, including its environmental insurance policies. The trusts tried to collect environmental cleanup costs from the AIG unit under an insurance policy that covered response costs and natural resource damages. Sources said that American International Specialty Lines Insurance denied coverage and then filed suit seeking to confirm that it was not obligated to pay the trusts, according to the Justice Department, which intervened in the case on behalf of the Environmental Protection Agency and other agencies. [CNN NEWS: HAZARDOUS WASTE]

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Published on Jan-10-08


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