Travelers must pay $500 million to asbestos victims

(Bloomberg) -- Travelers Cos. must immediately pay about $500 million to asbestos victims under a settlement made six years ago in the bankruptcy of Johns Manville Corp., a judge ruled.

Travelers is a major employer in St. Paul, which was the firm's headquarters town until last year.

U.S. Bankruptcy Judge Burton Lifland in Manhattan said in an order signed Thursday that his ruling should resolve a dispute over whether a U.S. Supreme Court ruling reversed an earlier order over the settlements, among Travelers Indemnity Co. and Travelers Casualty & Surety Co., for their work as insurers to Johns Manville.

"The Court will resolve this narrow dispute that has gone on for too long, especially for those asbestos victims who have yet to be fully compensated," Lifland said.

Johns Manville, once the nation's largest maker of asbestos, filed for bankruptcy in 1982. In June 2009, the Supreme Court overturned a ruling that allowed suits against units of Travelers by people harmed by exposure to asbestos.

"Just as the Supreme Court has barred parties from bringing suit against Travelers based on the plain language of the 1986 orders, Travelers should likewise be bound by the plain language of the settlements, and should be compelled to comply with its payment obligations," Lifland wrote.

The case is In re Johns Manville Corp., 82-11656, U.S. Bankruptcy Court, Southern District of New York (Manhattan).