Much represents Velsciol Chemical, a global manufacturer with a portfolio of chemicals serving customers around the world, in a matter originating from the sale of PCBs by Monsanto in the early 1970s and the liability stemming from the use of those chemicals. Velsicol is the indemnitor of certain insurance companies as a result of complicated insurance repurchases by Fruit of the Loom approximately 20 years ago. Universal Manufacturing (a former Fruit of the Loom subsidiary, as is Velsicol) purchased PCBs from Monsanto and is now in litigation with Monsanto in New Jersey and Missouri regarding liability claimed to exceed $1 billion.
Universal is trying to shift any liability that it may have to the insurers, and Velsicol is standing in the insurers’ shoes as a result of the insurance repurchase agreements. Velsicol is in litigation with Universal in state and federal courts in Illinois regarding whether any insurance coverage exists and whether the insurers are obligated to provide any coverage.
In addition to the large dollar exposure, this matter presents complicated issues involving the scope of contractual indemnities, whether a “known loss” exists to bar insurance coverage, and the circumstances under which Monsanto obtained the undertaking from Universal. The underlying litigation is ongoing, and Much continues to explore strategies to limit the parties’ liability.
