With the first of what may be a long string of product-liability trials now only months away, C.R. Bard Inc. (NYSE:BCR) has convinced an insurance carrier to again cover potential claims.
All it took was letting a $25 million IOU slide.
The Murray Hill, N.J.-based device conglomerate recently settled with an unidentified insurance company, securing a commitment from the insurer to cover possible claims resulting from ongoing litigation over one of Bard’s line of hernia-repair products. In exchange for securing coverage up to a non-disclosed limit, Bard agreed to quit seeking payment of money it claimed the insurance company owed and will instead take a $25 million, pre-tax write-off from financial results for the now-concluded fourth quarter of 2009.
The Dec. 31, 2009, settlement and the insurance receivable write-down were disclosed in regulatory documents filed Jan. 6 with the U.S. Securities and Exchange Commission.
Bard, through its Warwick, R.I.-based Davol Inc. subsidiary, began a recall of its Composix Kugel hernia patches in December, 2005, after receiving reports the device broke apart inside several patients. Specifically, a recoil ring used to secure the mesh patch to tissue perforations was said to have separated, and in some cases, began to move throughout the abdomen, damaging internal organs. Many other patients reported severe pain or other complications following repair surgery.
Through late last year, more than 2,700 plaintiffs had filed suit in either federal or state courts pursuing product-liability claims for personal injuries, with most of those cases since transferred to the U.S. District Court for Rhode Island for pre-trial proceedings. The first of two so-called bellwether cases are slated to begin in March and April, respectively, in Providence.
Throughout the process, Bard has refuted most of the claims, saying it acted responsibly and began the recall voluntarily as soon as troubles with the Composix patch surfaced. But the company also has butted heads with its insurance carriers, some of which are balking at paying claims against Bard’s product-liability policies. Company officials have said they are continuing to work with the insurers to enforce terms of the policies.
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