Travelers 2010 Annual Report Download - page 246

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. CONTINGENCIES, COMMITMENTS AND GUARANTEES (Continued)
with the Supreme Court’s June 18, 2009 ruling in TPC’s favor. The Supreme Court denied the Petitions
on November 29, 2010.
The plaintiffs in the Statutory and Hawaii actions and the Common Law Claims actions filed
Motions to Compel with the bankruptcy court on September 2, 2010 and September 3, 2010,
respectively, arguing that all conditions precedent to the settlements have been met and seeking to
require TPC to pay the settlement amounts. On September 30, 2010, TPC filed an Opposition to the
plaintiffs’ Motions to Compel on the grounds that the conditions precedent to the settlements,
principally the requirement that all contribution claims be barred, have not been met in light of the
Second Circuit’s March 22, 2010 opinion. On December 16, 2010, the bankruptcy court granted the
plaintiffs’ motions and ruled that TPC was required to fund the settlements. On January 20, 2011, the
bankruptcy court entered judgment in accordance with its December 16, 2010 ruling and ordered TPC
to pay the settlement amounts plus prejudgment interest. On January 21, 2011, TPC filed an appeal
with the U.S. District Court for the Southern District of New York from the bankruptcy court’s
January 20, 2011 judgment.
SPC, which is not covered by the Manville bankruptcy court rulings or the settlements described
above, is a party to pending direct action cases in Texas state court asserting common law claims. All
such cases that are still pending and in which SPC has been served are currently on the inactive docket
in Texas state court. If any of those cases becomes active, SPC intends to litigate those cases vigorously.
SPC was previously a defendant in similar direct actions in Ohio state court. Those actions have all
been dismissed following favorable rulings by Ohio trial and appellate courts. From time to time, SPC
and/or its subsidiaries have been named in individual direct actions in other jurisdictions.
Outcome and Impact of Asbestos and Environmental Claims and Litigation. Currently, it is not
possible to predict legal outcomes and their impact on the future development of claims and litigation
relating to asbestos and environmental claims. Any such development will be affected by future court
decisions and interpretations, as well as changes in applicable legislation. Because of these
uncertainties, additional liabilities may arise for amounts in excess of the current related reserves. In
addition, the Company’s estimate of ultimate claims and claim adjustment expenses may change. These
additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated
and could result in income statement charges that could be material to the Company’s results of
operations in future periods.
Other Proceedings
Broker Anti-Trust Litigation—In 2005, four putative class action lawsuits were brought against a
number of insurance brokers and insurers, including the Company, by plaintiffs who allegedly
purchased insurance products through one or more of the defendant brokers. The plaintiffs alleged that
various insurance brokers conspired with each other and with various insurers, including the Company,
to artificially inflate premiums, allocate brokerage customers and rig bids for insurance products
offered to those customers. To the extent they were not originally filed there, the federal class actions
were transferred to the U.S. District Court for the District of New Jersey and were consolidated for
pre-trial proceedings with other class actions under the caption In re Insurance Brokerage Antitrust
Litigation. On August 1, 2005, various plaintiffs, including the four named plaintiffs in the above-
referenced class actions, filed an amended consolidated class action complaint naming various brokers
and insurers, including the Company, on behalf of a putative nationwide class of policyholders. The
234