Pfizer 2010 Annual Report Download - page 105

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
In February 2008, the Bankruptcy Court authorized Quigley to solicit an amended reorganization plan for acceptance by claimants.
According to the official report filed with the court by the balloting agent in July 2008, the requisite number of votes was cast in favor
of the amended plan of reorganization.
The Bankruptcy Court held a confirmation hearing with respect to Quigley’s amended plan of reorganization that concluded in
December 2009. In September 2010, the Bankruptcy Court declined to confirm the amended reorganization plan. Pfizer and Quigley
are seeking to address the Bankruptcy Court’s concerns regarding the amended reorganization plan and currently intend to submit a
revised plan for consideration by the court. There is no assurance that such a revised plan will be submitted or that, if submitted, it
will be approved by the Bankruptcy Court. As a result of the foregoing, Pfizer recorded additional charges for this matter of
approximately $1.3 billion pre-tax (approximately $800 million after-tax) in 2010. Further, in order to preserve its right to address
certain legal issues raised in the court’s opinion, in October 2010, Pfizer filed a notice of appeal and motion for leave to appeal the
Bankruptcy Court’s decision denying confirmation.
In a separately negotiated transaction with an insurance company in August 2004, we agreed to a settlement related to certain
insurance coverage which provides for payments to us over a ten-year period of amounts totaling $405 million.
•Other Matters
Between 1967 and 1982, Warner-Lambert owned American Optical Corporation, which manufactured and sold respiratory protective
devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, Warner-Lambert agreed to indemnify
the purchaser for certain liabilities, including certain asbestos-related and other claims. As of December 31, 2010, approximately
88,000 claims naming American Optical and numerous other defendants were pending in various federal and state courts seeking
damages for alleged personal injury from exposure to asbestos and other allegedly hazardous materials. Warner-Lambert is actively
engaged in the defense of, and will continue to explore various means to resolve, these claims.
Warner-Lambert and American Optical brought suit in state court in New Jersey against the insurance carriers that provided
coverage for the asbestos and other allegedly hazardous materials claims related to American Optical. A majority of the carriers
subsequently agreed to pay for a portion of the costs of defending and resolving those claims. The litigation continues against the
carriers who have disputed coverage or how costs should be allocated to their policies, and the court held that Warner-Lambert and
American Optical are entitled to coverage by those carriers of a portion of the costs associated with those claims. The case is now in
the allocation phase, in which the court will determine the amounts currently due from the carriers who have disputed coverage or
allocation as well as their respective coverage obligations going forward.
Numerous lawsuits are pending against Pfizer in various federal and state courts seeking damages for alleged personal injury from
exposure to products containing asbestos and other allegedly hazardous materials sold by Gibsonburg Lime Products Company
(Gibsonburg). Gibsonburg was acquired by Pfizer in the 1960s and sold small amounts of products containing asbestos until the
early 1970s.
There also is a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to
asbestos in facilities owned or formerly owned by Pfizer or its subsidiaries.
Celebrex and Bextra
•Securities and ERISA Actions
Beginning in late 2004, actions, including purported class actions, were filed in various federal and state courts against Pfizer,
Pharmacia Corporation (Pharmacia) and certain current and former officers, directors and employees of Pfizer and Pharmacia.
These actions include (i) purported class actions alleging that Pfizer and certain current and former officers of Pfizer violated federal
securities laws by misrepresenting the safety of Celebrex and Bextra, and (ii) purported class actions filed by persons who claim to
be participants in the Pfizer or Pharmacia Savings Plan alleging that Pfizer and certain current and former officers, directors and
employees of Pfizer or, where applicable, Pharmacia and certain former officers, directors and employees of Pharmacia, violated
certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA) by selecting and maintaining Pfizer stock as an
investment alternative when it allegedly no longer was a suitable or prudent investment option. In June 2005, the federal securities
and ERISA actions were transferred for consolidated pre-trial proceedings to a Multi-District Litigation (In re Pfizer Inc. Securities,
Derivative and "ERISA" Litigation MDL-1688) in the U.S. District Court for the Southern District of New York.
•Securities Action in New Jersey
In 2003, several purported class action complaints were filed in the U.S. District Court for the District of New Jersey against
Pharmacia, Pfizer and certain former officers of Pharmacia. The complaints allege that the defendants violated federal securities
laws by misrepresenting the data from a study concerning the gastrointestinal effects of Celebrex. These cases were consolidated
for pre-trial proceedings in the District of New Jersey (Alaska Electrical Pension Fund et al. v. Pharmacia Corporation et al.). In
January 2007, the court certified a class consisting of all persons who purchased Pharmacia securities from April 17, 2000 through
February 6, 2001 and were damaged as a result of the decline in the price of Pharmacia's securities allegedly attributable to the
misrepresentations. Plaintiffs seek damages in an unspecified amount.
In October 2007, the court granted defendants’ motion for summary judgment and dismissed the plaintiffs’ claims. In November
2007, the plaintiffs appealed the decision to the U.S. Court of Appeals for the Third Circuit. In January 2009, the Third Circuit
vacated the District Court’s grant of summary judgment in favor of defendants and remanded the case to the District Court for further
proceedings. The Third Circuit also held that the District Court erred in determining that the class period ended on February 6, 2001,
and directed that the class period end on August 5, 2001. In June 2009, the District Court stayed proceedings in the case pending a
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