Federal-Mogul Corporation has had only limited involvement with asbestos. The company has been overwhelmed by asbestos litigation because of the historical involvement with asbestos of companies acquired by Federal-Mogul over the years. Currently, Federal-Mogul and certain of our subsidiaries have 365,000 pending asbestos claims.

There are essentially seven different streams of asbestos liability affecting Federal-Mogul, each arising from a Federal-Mogul acquisition of a discrete company with its own unique role in the manufacture, distribution and sale of asbestos-containing materials.

In 1998, Federal-Mogul acquired all of the stock of T&N plc, an English company that had at one time been a producer of asbestos and asbestos-containing products. The vast majority of claims against T&N in the U.S. litigation are brought by persons who claim to have been exposed, decades ago, to the products of T&N (raw asbestos fiber or a sprayed-on asbestos-containing insulation and fireproofing material) or of its now-defunct U.S. subsidiary; in the United Kingdom litigation, most of the claims are brought by former T&N employees or by third parties who allege exposure to T&N products.

By acquiring T&N, Federal-Mogul also acquired all of T&N’s subsidiaries. One such subsidiary is Gasket Holdings, Inc., a company that used to be known as Flexitallic Gasket Company. Flexitallic is named in the largest number of U.S. asbestos personal injury cases against Federal-Mogul entities because it made a very popular, extremely efficient, high-quality industrial gasket for use on piping systems; the product contained a small amount of asbestos bound in a latex material and surrounded by steel in such a manner that it emits only negligible amounts of asbestos dust. Despite the inherent safety of the product, hundreds of thousands of claims have been brought against this defendant solely because of the ubiquitous presence of Flexitallic gaskets at worksites across the country.

Another T&N subsidiary that is the subject of asbestos claims in the United States is Ferodo America, Inc., a manufacturer of friction products that at one time contained asbestos as a component.

Also in 1998, Federal-Mogul acquired certain of the businesses of Cooper Industries, Inc. One of those acquisitions was Moog Automotive, Inc., formerly known as Wagner Electric Corporation, also a manufacturer of friction materials that at one time contained asbestos. Federal-Mogul has been defending thousands of claims brought by persons who claim exposure to Wagner asbestos-containing friction products. In that same transaction, Federal-Mogul acquired certain friction manufacturing assets of a company known as Abex, and assumed the obligation to defend and indemnify certain asbestos claims against Abex.

In a separate 1998 transaction, Federal-Mogul acquired all of the stock of Felt Products Manufacturing Co., formerly known as Fel-Pro Inc., a manufacturer of automotive engine gaskets and related articles. At one time, certain Fel-Pro gaskets contained asbestos, and thousands of asbestos cases are pending against this subsidiary.

The last category of asbestos cases involving Federal-Mogul arises from the company’s ownership of a division known as Vellumoid, which Federal-Mogul owned and operated between 1965 and 1981. Vellumoid made heavy-duty and aircraft engine gasket materials, some of which contained asbestos.