Free Motion for Preliminary Injunction - District Court of Delaware - Delaware

Case 1:04-cv-01294-JJF Document 78-6 Filed O4/O3/2006 Paget of 3
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
F LOWSERVE CORPORATION, : Case N0. 04-1294-JJF
Plaintiff, :
- vs - :
BURNS INTERNATIONAL SERVICES :
CORPORATION, et al.,
Defendants. :
AFFIDAVIT OF CHRISTOPHER M. BECHHOLD
STATE OF NEVADA )
) ss:
CLARK COUNTY )
Christopher M. Bechhold, being first duly cautioned and sworn, deposes and
states as follows upon personal knowledge:
l. At all times relevant hereto I have been lead trial counsel for the
Flowserve Corporation in the case captioned Continental Casualty Company, et al. v. Borg
Warner, Inc., et al., Case No. 04 CH 01708, Circuit Court of Cook County, Illinois County
Department, Chancery Division ("Insurance Lawsuit").
2. On or about March 10, 2006, I was contacted by trial counsel for Royal
Insurance Company ("Royal") in the Insurance Lawsuit. In my telephone conversation with
Royal's counsel, I was advised that Royal did not agree with the decision of Plaintiffs,
Continental Casualty Company, Columbia Casualty Company, Transportation Insurance
Company and Continental Insurance Company (collectively "CNA") to stop paying on a pro rata

Case 1:04-cv-01294-JJF Document 78-6 Filed O4/O3/2006 Page 2 of 3
basis one hundred percent of the reasonable legal fees, expenses and settlements incurred by
Flowserve Corporation in the defense of the various asbestos lawsuits which have been filed
against Flowserve Corporation or a Flowserve related entity (collectively "Flowserve") arising
out of alleged exposure to Byron Jackson pumps ("Asbestos Claims"). Moreover, I was advised
that said decision had been made by CNA without consultation with or the knowledge of Royal.
4. As a result of Royal's disagreement with the decision of CNA to
discontinue paying one hundred percent of the reasonable legal fees, expenses and settlements
incurred by Flowserve in the Asbestos Claims, and subject to a complete reservation of rights to
seek reimbursement in accordance with any final decisions in the Insurance Lawsuit, Royal
offered to continue paying its pro rata share based upon one hundred percent funding for
Flowserve's reasonable fees, expenses and settlements incurred in the defense of the Asbestos
Claims.
5. In response to Royal's offer, I advised Royal's counsel that I would discuss
said offer with Flowserve and then get back in touch with her.
6. After discussing Royal's offer with Flowserve, I have had additional
conversations with Royal's counsel with respect to reaching an agreement with Royal conceming
funding the Asbestos Claims which have been filed against Flowserve, and it is my reasonable
anticipation that an agreement can be reached with Royal.
7. Based on my nearly twenty years of extensive experience in insurance
coverage litigation and knowledge of the insurance policies at issue in the Cook County case,
my having beem qualified as an expert in insurance coverage cases, and Royal’s communications
to me, my understanding is that Royal considers F lowserve to be an "insured" under the policies,
and Royal is willing to continue paying Flowserve's reasonable fees, expenses and settlements
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Case 1:04-cv-01294-JJF Document 78-6 Filed O4/O3/2006 Page 3 of 3
incurred in the defense of the Asbestos Claims on a one hundred percent pro rata basis, subject to
the normal reservation of rights for reimbursement. As an "insured," Flowserve would have the
contractual right to directly access the coverage available to Flowserve under said policies, and,
therefore, under no set of circumstances whatsoever would be required to obtain the consent or
approval of Burns International Services Corporation ["Burns"]. In this regard, I would note that
I have reviewed the Royal insurance policies at issue (as well as the other insurance policies at
issue in the Insurance Lawsuit) and I have been unable to find any terms or conditions in these
policies which would give Burns the right to "control" Flowserve's access or entitlement to any
insurance coverage for the Asbestos Claims. Moreover, in reviewing the transcript of the March
16, 2006 hearing on Burn’s Motion for Temporary Restraining Order and Preliminary Injunction,
I further note that counsel for Bums failed to cite for the Court a single provision from any
insurance policy to support Bums' contention that Bums "controls" Flowserve's access to the
insurance coverage at issue in the Insurance Lawsuit.
Further affiant sayeth naught. /5
Christ er M. Bechhold
Swom to and subscribed in my presfnce this jéday of April, 2006.
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