Recent discussion about Berkshire Hathaway Inc.’s asbestos risk insurance prompted a contact from Rachel Maines, a visiting professor at Cornell University’s School of Electrical & Computer Engineering.
Scripps News has reported that attorneys and defendants criticize Berkshire for not paying claims and judgments fairly. Berkshire has disputed the criticism, saying it pays claims promptly when warranted but litigates claims that are not justified or are excessive.
“Berkshire Hathaway is well within its rights to litigate excessive claims, which, unfortunately, is true of most of those that emerge from asbestos litigation,” Maines wrote in an email.
She sent a copy of her 35-page article, including 11 pages of bibliography, published in December by the Oxford University Press’ business history conference.
Asbestos cases since 1973 are the single biggest generator of revenue for plaintiffs, attorneys and expert witnesses, with 42,076 federal cases, more than 8,000 defendants in 75 different industries and 2,337,692 individual claims through 2009, she wrote.
Plaintiffs’ attorneys have devised a “master narrative” placing blame for asbestos-related illnesses, her article says, and judges, defendants and even insurers seem to accept the narrative.
But she disputes that narrative’s facts and says responsibility for asbestos-related claims often is wrongly assigned to property owners and others who are sued. Parties in the litigation seem unable to think outside the “asbestos tort box,” she wrote.
One of her arguments, which she says is ignored by attorneys defending against the claims: Businesses that used asbestos-bearing equipment or materials were required to use them by building codes in their cities and states, and they followed accepted and required engineering standards at the time.
How, she asks in the article, can someone be held liable for damages for following the law and using the best information available?
Berkshire Chairman and CEO Warren Buffett got a good review from the Las Vegas Review-Journal after his MidAmerican Energy division and other parties agreed to a settlement viewed as pro-consumer.
In an editorial, the newspaper said Berkshire’s $5.6 billion purchase of NV Energy looked like a bad deal for consumers because it would make ratepayers pay an extra $1 billion over a period of years.
“Talk about a PR problem,” the newspaper said. “One of the world’s richest men snaps up the largest electricity provider in the state hit hardest by the Great Recession, then asks a customer base that has suffered great economic harm to go Dutch on the costs?”
After challenges by the attorney general’s consumer protection office and the state’s utilities commission, MidAmerican agreed to drop the extra cost, give customers $20 million in credits off their bills and promise not to raise senior management’s salaries for at least two years.
The agreement is awaiting final approval, the editorial said, “but the sign-off from public entities charged with oversight should smooth the road.”
Berkshire’s HomeServices of America has acquired Prudential Rubloff Properties of Chicago and its insurance and title subsidiaries. Rubloff will merge with Koenig & Strey Real Living of Chicago, which HomeServices acquired in 2009. Next spring, the company, with nearly 1,600 staff members and $4 billion in annual sales, will become Berkshire Hathaway HomeServices KoenigRubloff Realty Group.
Philadelphia Eagles coach Chip Kelly told his players an inspirational fable recently, according to Tim McManus in Philadelphia Magazine.
A down-on-his-luck businessman takes a seat on a bench next to an old man and proceeds to tell his troubles. The old man writes a check for $500,000 and says, “Take this, and kindly pay me back in one year. Your business will be fine.”
The name on the check: Warren Buffett.
The businessman puts the check in a safe and goes to work building his business into a success without ever using the money. A year later, he goes back to the bench to return the check and finds the old man, accompanied by a nurse.
“I’m glad you didn’t try and cash that check,” the nurse said. “This old man is from a nursing home. He sometimes dresses up and pretends he is Warren Buffett, but he is really not.”
The moral of the story: “Everything you need is right there in front of you.”
The Eagles beat the Green Bay Packers, 27-13.
In a rare joint interview, Buffett and Berkshire Vice Chairman Charlie Munger told Patricia Sellers for Fortune magazine and CNN that they aren’t the smartest guys around.
Munger: “You’ve got to remember that it’s not real brilliance. In other words, you talk about prodigy, what it takes to extend the boundaries of physics. Neither of us has that.
Munger: “We have learned how to outperform people who are a lot smarter.”
Buffett: “Yeah, we can’t play top-notch chess.”
Munger: “No, we can’t.”
Buffett: “But we know how to do what we do.”
Munger: “But the other great secret is that we’re good at lifelong learning. Warren is so much better in some ways in his 70s and 80s than he was younger that it’s almost awesome. If you keep learning all the time you have a huge advantage. And we both just like it.”
Buffett: “And we have a wonderful group of friends, really wonderful.”
Munger: “From whom we can learn a lot.”
One can’t help noticing that Buffett, the Democrat, is wearing a red tie and Munger, the Republican, is wearing a blue tie.
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.