Free Answering Brief in Opposition - District Court of Delaware - Delaware

Case 1:04-cv—01294-JJF Document 81-6 Filed 04/18/2006 Page1 013
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Case 1:04-cv—01294-JJF Document 81a6 Filed 04/18/2006 Page 2 of 3
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February 17, 2006
Edward Mueller
Nisen & Elliott LLC
200 W. Adams Street #2500 _
Chicago, IL 60606
Re: Flowserve vs. Bums
Court No. 04-1294 JJF
Our File No. 7955.301
Dear Ed:
l have been instructed by my client to provide you with the following letter. As
you are aware from ln: Faber's letter of February 8, 2006, CNA has informed F lowsenre
of certain "unilateral acti0n" that it intends to take against the Insureds in connection
with the defense of the underlying asbestos lawsuits.
The purpose of this letter is to notify you that if by 5:00 p.m. CST on February 22,
2006, Burns has not notified Flowsenre in writing that Bums has fully accepted defense
and indemnity obligations pursuant to §9.04 of the 1987 Stock Purchase Agreement,
Flowserve intends to take certain actions in an effort to ensure that its interests in the
underlying asbestos lawsuits are fully protected. Flowserve intends to seek all costs
and expenses associated with this action from Burns.
First. based on CNA‘s actions, Flowserve will be advising CNA‘s chosen defense
counsel that on or before March 1, 2006, they must forward to Flowserve’s National
Coordinating Counsel for asbestos claims their complete tiles for all lawsuits in which
said counsel has entered an appearance, whether properly or improperly, on behalf of
Flowsewe or any Flowsenre heritage entity in said lawsuit (collectively "BW/lP“).
Second, with respect to all current and future lawsuits brought against BWIIP for
alleged injuries arising out of asbestos-containing products manufactured or sold by
Borg Warner prior to 1987, BW/IP will assert all defenses necessary to fully protect its
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Case 1:04-cv—01294-JJF Document 81-6 Filed 04/18/2006 Page 3 of 3
Edward Mueller
Nisen & Elliott LLC
February 17, 2006 ·
Page 2
Third, Flowserve intends to review each of the nies beingforwarded by CNA-
retained defense counsel. To the extent that Flowserve determines that any CNA-
retained defense counsel has violated any provision of the applicable Code of
Professional Responsibility by placing the interests of Bums or any other Borg Wamer~
related entity above those of Flowserve, or by otherwise acting in a manner adverse to
Flowsenre’s interests (e.g. improperly substituting BW/IP into lawsuits naming Burns),
Flowserve will tile appropriate complaints with the applicable disciplinary bodies.
Furthermore, if it is determined that any such defense counsel was instructed by or on
behalf of Burns or its counsel to take such action, we will amend our Delaware
complaint to seek appropriate additional relief. lf any such instruction came from any of -
Bums‘ insurers, Flowserve will likewise seek all remedies available at law from the
responsible entity.
Lastly, Flowserve and its counsel intends to meet with plaintiffs' counsel in the
pending asbestos suits commencing on or shortly after March 15, 2006, to explore
common ground with respect to obtaining a global resolution of the asbestos lawsuits
brought against Flowserve. These settlement meetings will be comprehensive in nature
and will include a discussion of all reasonable options available to the parties to seek
the resolution which best protects Flowsenre's interests.
Should you have any questions, please feel free to contact either Larry Henke or
me.
Sincerely,
Gregory E. Rogus
GERsd
cc: Larry Henke
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