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

Case 1:04-cv—01294-JJF Document 81-3 Filed 04/18/2006 Page1 0f3
EXHIBIT A

Case 1 :04-cv—01294-JJF Document 81 -3 Filed 04/18/2006 Page 2 of 3
B2&KER (Sz NIQKENZ IE eaker a. lvlexenzre LLP
One Prudential Plaza, Suite 3500
130 East Randolph Drive
Chicago, Illinois 60601, USA
Tel: +1 312 861 8000
Fax: +1 312 861 2899
[email protected]
www.bakemet.ccm
mins VIA ELECTRONIC MAIL Lisa S. Brcgan
5;-Igkqk Tel: +1 312 861 3070
¤¤nln¤ _ Fax: +1 312 698 2079
Minh my APUI 10» 2006 [email protected]¤m
Hong Kong
mjxuwur Christopher M. Bechhold .
Manila Thompson Hine
312 Walnut Street
s"‘¤“*‘°'° 14th Floor
Sydney
Taipei Cincinnati,
Tokyo
:‘;:f:;_t RE: Asbestos Cost·Sharing Discussion
Almaty
Amsterdam
Dear Mr. Bechholdz
Antwerp
B3hI‘BlI'I ‘
gglgalaa I understand that you have injected into the Delaware proceedings between Flowserve and
Ejfggn, Bums, by way of an affidavit, the two conversations we had on March 3 and March 22,
gyxs; 2006, with regard to Royal’s participation in the funding of the asbestos claims. I note that I
can did not authorize for you to make such a disclosure of our two conversations.
Dbssaldorf
FmnkfurtIMaln
$:5***** On the first call, I did express Royal’s willingness to "open a dialogue" with Flowserve. I
L¤l‘Idt>I\ suggested that Royal might be willing to "stay the course" and continue to pay its pm rata
mfd share on an interim basis, subject to a mutual and reciprocal reservation of rights, for the
immediate future and while issues conceming the “control of the defense" of the asbestos
Paris claims were sorted out, and while the parties awaited further direction, if any, from the
:§§Q'§ Circuit Court of Cook County, Illinois, where Royal, Flowserve, and others have been
$**;:1 mm named in a declaratory judgment action involving insurance coverage for these same claims. li
Sllodrholm
$:2; At tl1e time of our second conversation on March 22, 2006, I was unaware of the
Z¤·*·=*· Memorandum Opinion of the Delaware court which I understand to have been issued at
' umn n swan some point on that Same day.
A ne ‘
:;·;l:Am I note that I did not take any position durmg either call as to whether “Royal considers
cam Flowserve to be an ‘insured’ under the po1icy." Since the time of our second call and the
2:;:; issuance of the Memorandum Opinion on March 22, 2006, I have had no further
1;:*;:; mm conversations with you and no agreement has been reached with Royal.
Huuslnn
cw A3 you 310 &W31’€, ROyZl.lS not 8 party to the Delaware action, but remains a party to the
mzmy Illmors act1on referenced m the foregoing. Royal remains w1llmg to discuss with Flowserve
NewYork an interim funding arrangement based upon a reciprocal reservation of rights, if such a
§:;“lQ‘;¤r_ agreement can be negotiated without running afoul of any Court directives imposed upon the
Ric de Janeiro pa[·ties_ · ·
Sen Diego
Sen Francisco
Santiago
San Paulo _
Tl|uana
Toronto
Valencia
w""i““'°"· °° Baker & McKenzie LLP ls a member of Baker 8. McKenzie International. a Swiss Verein.

Case 1 :04-cv-01294-JJF Document 81 -3 Filed 04/18/2006 Page 3 of 3
BAKER & MQIQENZIE - V
Finally, if any party sees the need to reference this letter in the Delaware proceedings, it has
Royal’s authority to do so. ·
Very an uly yours, _
jh Q/' &%M
Lisa S. Brogan
LSB/lrb _
cc: Edward B. Miller! Niesen & Elliott
Michael H. Moirano/ Niesen & Elliott
ci-uDMs112422929.1
s
Christopher M. Bechhold Page 2