After years of litigation, the companies accused of contaminating local waterways, floodplains, homes and people with PCBs have agreed to pay hundreds of millions of dollars in compensation. While itÃ¢e(TM)s still unknown which victims will received how much, plaintiffsÃ¢e(TM) lawyers and representatives for the defendants have explained where the money would go, where itÃ¢e(TM)s coming from and why. A settlement of roughly $700 million agreed to by Solutia, Monsanto, Pharmacia and Pfizer includes a total of $310 million for personal damages to more than 20,000 plaintiffs, and a package of community health initiatives valued at about $75 million over 20 years. The agreement Ã¢e” which must be approved by the court on Aug. 26 Ã¢e” resolves both the federal court case, Tolbert v. Monsanto co. et al., and the state court case, Abernathy v. Monsanto Co. et al. The terms call for separate $300 million cash settlements for the federal and state cases and additional funding for a health clinic and prescription drug programs. For each $300 million payment, the first $275 million must be paid within a week of the court order. Monsanto will pay $195 million to each fund and commercial insurance from Solutia, Monsanto, and Pharmacia will pay $80 million. The remaining $25 million will be paid by Solutia in equal installments over 10 years, staring in August of 2004. For both the federal case and the state case, $120 million will be taken out for lawyersÃ¢e(TM) fees. That leaves about $155 million available to be divided among the plaintiffs of each case for damages. SolutiaÃ¢e(TM)s $25 million portion will be paid over time and largely will be used to fund the health clinic. There are 3,500 plaintiffs in the state court case and 17,000 plaintiffs in the federal court case. A court-appointed special master will create a formula that decides individual awards based on the level of harm. Donald Stewart, lead plaintiffsÃ¢e(TM) attorney in the state court case, said he believes the reason his clients are receiving the same sum for a much smaller group is a combination of the success he had had and the severity of their claims. Stewart said a large number of his plaintiffs lived in the immediate vicinity of the plant for a long time. His case was filed first Ã¢e” in 1996 Ã¢e” and a jury as of last week had already decided verdicts totaling more than $100 million for about 500 plaintiffsÃ¢e(TM) property damage and mental anguish claims. Those verdicts have not been rendered final judgments and will not be if StewartÃ¢e(TM)s clients accept the settlement. The clients he had a chance to talk with Thursday were pleased with the terms. Ã¢eoeThey are going to be receiving a substantial amount of money,Ã¢e he said. The plaintiffs Ã¢e(TM)lawyers for each case would receive $120 million in lawyersÃ¢e(TM) fees. For the state case, Stewart would share payment with a New York law firm and two Louisville lawyers. Stewart said the lawyers have spent millions of dollars on the case, but he did not disclose an exact amount. For the federal case, fees will be divided among at least four law firms. PlaintiffsÃ¢e(TM) lawyer Jere Beasley said altogether they had already spent more than $10 million. Depositions alone cost $2 million, he said. Even though Monsanto produced polychlorinated biphenyls at its western Anniston plant from the 1930s to 1970s, Solutia took on the plantÃ¢e(TM)s environmental liability when it was spun off from Monsanto in 1997. Last Thursday, Solutia disclosed in a quarterly financial report that it was considering filing for bankruptcy because of economic conditions and the cost of environmental lawsuits. In the settlement, Solutia is only obligated to pay a fraction of what Monsanto agreed to pay, and has 10 years to do so. Solutia spokesman Glenn Ruskin said there was a clear realization that if Solutia had to file for Chapter 11 restructuring, all the liabilities would revert to Monsanto. Ã¢eoeThat brought them back to the table,Ã¢e he said. Ruskin said Solutia still has banking, bond and pension issues to deal with, but the agreement helps the company get back to business. Ã¢eoeThis changes the dynamic,Ã¢e he said. Ã¢eoeThe picture looks a lot different than it did last Thursday, but we will continue to keep all options on the table in dealing with other major issues.Ã¢e Solutia also agreed to issue Monsanto warrants to purchase 10 million shares of Solutia common stock. Monsanto previously was owned by Pharmacia. Pfizer, Inc. recently acquired Pharmacia. As part of the settlement, Pfizer would fund a package of health initiatives, which have an estimated value of $75 million over 20 years. Pfizer would pay $2 million to build an environmental-medical clinic and research facility in Anniston and $500,000 to provide free health screenings to uninsured plaintiffs. Over 20 years, the company would pay $1 million a year to provide free prescription drugs to low-income and uninsured patients. The company also will market and make its Pfizer Share Drug Program more readily available in Calhoun County. According to Ruskin, about 4,000 residents are eligible for the program locally. If 80 percent of those persons enroll, the savings they receive would total about $50 million over 20 years.
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