Johns-Manville Amendment No. 1 to Form S-7: Litigation (1979)

The cover and "Litigation" section of Amendment No. 1 to Johns-Manville's April 1979 registration statement (Registration No. 2-64226), filed with the Securities and Exchange Commission in May 1979. It adds that the number of asbestos suits "has increased substantially in each of the last four years," that a California court had ruled against the company on whether workers' compensation was its employees' only remedy, and that a shareholder had filed a class action on May 4, 1979, charging that the company's published documents misstated its potential asbestos liabilities.

What it shows

Weeks after the first filing, the amendment adds new risks. It reports that "In a recent decision, a lower court in California has ruled contrary to" the company's position that workers' compensation was the exclusive remedy for its own employees, and that J-M intended to appeal. It also reports two rulings in the company's favor: on April 24, 1979, a court refused class status for the Todd Pacific Shipyards and Long Beach Naval Shipyard workers, and on May 8, 1979, for employees at J-M's Waukegan, Illinois plant.

The shareholder suit charged violations of the federal securities laws "by alleged misrepresentations in or material omissions from the Company's published documents with respect to matters bearing on its potential asbestos-related health claims and liabilities." The class was everyone who bought J-M common stock between April 1, 1975 and October 15, 1978, including buyers in the 1976 public offering; the loss claimed followed "disclosure of relevant facts in October 1978." J-M denied the charges. The board heard of the suit on June 1, 1979 (board minutes, 1979).

The amendment closes with Congress: a House committee had voted for a $330 million federal program to find and remove certain asbestos material in schools and "directed the Justice Department to investigate possible recovery of all or parts of such amount from the asbestos industry." The company said it could not predict the effects.