Coming to Grips With a Legacy Of Asbestos

February 28, 1999

Reg Johnson, New York Times - In her bed at home hooked up to an oxygen tank, Edna Boston often back on the days when she worked at Raybestos-Manhattan in Stratford.

She said she remembers how dirty and dusty it was in the plant that for years made asbestos brake shoes for cars. The plant had little ventilation in the early years and no one wore masks, she recalled.

"I had to fight for a blower to be put in my area," Ms. Boston said. "I almost got fired for it."

Ms. Boston, now 57, has pleural asbestosis, a disease which causes thickening of the lung walls, and reduces oxygen intake. She has to have a supplemental oxygen with her at all times.

She said she firmly believes that her condition was triggered by the asbestos in the plant, and contends that the company was negligent for not warning people about the dangers. She plans to make a claim again Raybestos's successor company, Raytech, for workers' compensation, once that company is out of bankruptcy. She already is suing several asbestos suppliers for negligence. About Raytech, Ms. Boston minces no words. "I want them with a vengeance," she said.

Ms. Boston is not the only one who is waiting for their due from Raytech. Thousands of former workers who got sick, either Raybestos employees or workers elsewhere who used Raybestos employees or workers elsewhere who used Raybestos products on their job, have been waiting to lodge claims against the company.

This year - after 10 years of legal wrangling in bankruptcy court - the way may be finally cleared for many of those claims to be heard. The Federal Bankruptcy Court in Bridgeport is expected to take up an agreement in principle reached between Raytech and it creditors on how to address all the different claims against Raytech, which include not just the asbestos related claims, but also those by retirees for pensions and other retirement benefits, and the Federal Environmental Protection Agency.

The E.P.A. is claiming $190 million against Raytech to defray the costs of the massive environmental cleanup carried out by the Government of asbestos waste that Raybestos had dumped at its plant site and at other sites in Stratford. That cleanup, done under the E.P.A.'s Superfund program was one of the most expensive in New England history, agency officials said.

The 36-acre former plant site, visible from Interstate 95, now resembles a vast asphalt parking lot, the finished result of the cleanup and multi-layered cap put on the site to prevent any toxic waste still in the ground from leaching out. The E.P.A. has done extensive testing and has declared the site safe for development, though the government continues monitoring the groundwater.

Sometime this month or next, the Bankruptcy Court is expected to approve the sale of the land, which has been valued at about $15 million. The proceeds would go to help pay for the Federal agency's cleanup costs. Several developers have expressed interest in acquiring the property to build a shopping plaza.

The sale of the land and progress in settling the myriad legal claims signals the end of a long saga surrounding Raybestos and its successor companies.

Raybestos-Manhattan operated at the site for over 60 years, manufacturing brake linings and clutch facings, and establishing one of the top names in the automotive field. They were also one of the leading employers in the Bridgeport area, with a work force for many years of more than 1,500 people.

The company had a good public image and sponsored softball teams that routinely won national championships in the Amateur Softball Association. And for years, when few knew about the hazards of the asbestos material they were working with, it seemed a good place to work, with smooth relations between management and employees.

"It was like a big family, everybody knew each other," recalled John Varrone of Stratford, now 74, who worked at Raybestos for 38 years. "It was a great place to work. When I first started, I couldn't wait to go to work in the morning."

Mr. Varrone remembers a past president of the plant helping him get a mortgage when he bought his house and telling him "anytime you need anything, don't hesitate to ask."

There was never any talk about any dangers from asbestos, and according to Mr. Varrone and others, the company for years did not require people to wear masks for protection against dust in the air.

But in the late 1970's, publicity widened about the links between exposure to asbestos and cancer. Lawsuits by consumers and workers against major asbestos manufacturers, such as Johns Manville and Raybestos, were begun. Those suits charged that the companies were aware of the hazards of the material and failed to take adequate steps to protect employees.

The Raybestos management then instituted more strict rules on wearing masks and installed equipment to clean up the air, Mr. Varrone said. But the revelations about the dangers of asbestos left many workers disillusioned. "We felt betrayed," Mr. Varrone said. "They hadn't told us."

The lawsuits mounted, and soon the company was facing millions of dollars in litigation costs and potential liability. Mr. Varrone said things were going downhill at the plant, and the workforce was being cut back.

By the late 1980's Varrone had retired and new owners changed the company's name from Raybestos to Raymark. Assets were then sold off. Later, Raytech was created to be the parent company of Raymark and subsidiaries with a variety of corporate names. Raymark was then sold. By 1990, both Raymark and Raytech were in bankruptcy.

"Several courts have ruled that this corporate shell game was designed to escape the liability of litigation," said Peter Lockwood, a Washington lawyer who is familiar with the Raytech case. Mr. Lockwood's firm is the counsel appointed by the Bankruptcy Court to represent the unsecured creditors committee of Raytech.

Unlike Raymark, whose assets at this point only include the former plant site in Stratford and property in Pennsylvania, Raytech has active plants in Indiana, Michigan and Germany. The company is worth about $200-300 million, Mr. Lockwood said.

In recent years, Mr. Varrone and other retirees of Raymark or Raytech have faced uncertainty about whether they would continue to receive their pensions and health benefits. In the early 1990's their pensions were threatened with elimination when a California company that had invested the pension funds for Raytech was involved in a fraud case and went bankrupt. After California insurance and Connecticut Congressional officials intervened, the firm was taken over by another company, and the pensions were preserved.

Last year, because of a decision in Bankruptcy Court involving the intertwined cases of Raymark and Raytech, more than 1,300 former workers stood to lose their and life insurance. Again, with help from Representative Rosa DeLauro, Democrat of Connecticut, and from a Bridgeport law firm providing pro bono assistance, the decision was modified, and the benefits kept intact.

Mr. Varrone, who suffers from lung cancer and a heart problem, said he believed that whatever the twists and turns of the bankruptcy case are, he and his fellow workers deserved the pensions and benefits they were originally promised at Raybestos.

"Morally, they're backing out. I don't have it in writing, but it was an oral agreement. It was part of our pay," he said.

The future status of the retirees' pensions and health insurance is just one part of a large puzzle that Mr. Lockwood hopes can be resolved when Raytech's bankruptcy is settled.

Right now there are billions of dollars worth of claims by different parties against Raytech. They include the Federal Government, for costs incurred in the Superfund cleanup and damage to the environment; the state of Connecticut, for the state's costs incurred in the cleanup; the retirees, for coverage of health and pension plans; the asbestos claimants, and the future asbestos claimants.

The claims by current and future asbestos victims alone is estimated to be over $3 billion, Mr. Lockwood said. "There's clearly not enough to pay for all the liabilities," he said.

All the same, Mr. Lockwood said he hoped that a memorandum of understanding among the creditors and Raytech would be approved by the court. The agreement calls for 90 percent of the Raytech stock to be allotted for claims, and 10 percent be left with the company's shareholders. The company would set up a trust for paying the claims, similar to what a bankruptcy court had done with Johns Manville, which was also sued for billions of dollars.

James Early, a New Haven lawyer who has handled hundreds of suits against Raybestos and its successors since the 1980's said the delay in bringing cases has created widespread frustration among the workers he represents.

"I feel a sense of outrage for people that worked there, because they were exposed to an extremely hazardous material by a company that knew how dangerous the material was," he said.

In a number of court cases over the years, Raytech took the position that they were not responsible for what predecessor companies, Raybestos and Raymark, might have done.

"Our response was that we were not a successor to that liability," said LeGrande Young, vice president and general counsel of Raytech.

But a series of Federal court decisions, including a ruling by the United States Supreme Court, held that Raytech was a successor to the asbestos related liability.

"That's what generated the attempt to settle this whole thing, get out of bankruptcy and give up 90 percent of the company," Mr. Young said.

Edna Boston said she does not know whether she can get totally well again or how much she might get from Raytech. But the principle of winning something against her old company, or the successor to it, is almost more important than how much she gets, she said. Her husband, William, also used to work at Raybestos, and died of asbestosis at age 44. In some way, Ms. Boston wants the company to acknowledge the wrong that she believed it did to people like her. "If they only have to pay me a penny a month, I want it," she said.