
Tort is technical and operational risk of insurers 281
isolated, the only hope of ABB, by putting it into Chapter 11, was to win a stay of
execution. Asbestos was not the only cause of the company’s downfall, but it made a
bad case even worse.
For bondholders of ABB, the troubles had started well before the asbestos case hit. In
the week of 25 March 2002, ABB had to negotiate new terms on $3 billion loans,
including higher interest payments from Libor plus 60 basis points, with banks also
receiving a 40 basis points arrangement fee. Citigroup and Cr´edit Suisse First Boston,
which had underwritten the original loan, were the renegotiators of new terms. ...