CNA - Four companies indirectly owned by Berkshire Hathaway file for bankruptcy

2023-04-27 13:53:29 ET

Whittaker, Clark & Daniels, Brilliant National Services, L.A. Terminals, and Soco West filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court fo the District of New Jersey on Wednesday. The equity of the four companies had been acquired by an indirect subsidiary of Berkshire Hathaway ( NYSE: BRK.B ) ( NYSE: BRK.A ) in December 2007.

Although the companies had ceased operations in 2004 and sold all their operating assets before the acquisition, they still faced liabilities related to asbestos, talc, and environmental claims at the time of the acquisition, Berkshire Hathaway ( BRK.B ) said in a statement Thursday.

At the time of the filing, the firms' consolidated liabilities were estimated at $1B-$10B and consolidated assets were estimated at $100M-$500M, according to the filing .

"No Berkshire ( BRK.B ) company ever operated, or had any involvement in, the manufacturing and chemical operations that gave rise to the companies’ liabilities, and no Berkshire insurer issued it any insurance in connection with the acquisition," the company said.

In 2010, a Berkshire Hathaway ( BRK.A ) unit assumed asbestos and pollution risks held by CNA Financial ( CNA ) for $2B. Then the next year, it agreed to take on $3.5B in potential asbestos liabilities from AIG ( AIG ) in exchange for ~$1.65B payment.

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