BHOPAL, India, Nov. 30: The giant multi-national Union Carbide Corporation (UCC) currently being sued for three billion dollars following the Bhopal ‘gas disaster in India was given the ‘green light today to go ahead with its financial reorganization.

Judge G.S. Patel, giving his decision in a Bhopal district court, modified a November 17 temporary injunction against the company, He limited an earlier ban on the sale of UCC assets to cover only assets worth three billion dollars.

The move, welcomed by UCC officials in the tine courtroom, came after the company promised to maintain unencumbered assets worth that amount for possible payment to victims.

The court began hearings in ‘September when the Indian government filed a suit claiming damages of some 520,000 people affected by a toxic gas leak from its Bhopal pesticide plant.

More than 2,000 people were killed and 200,000 injured in the disaster on December 3, 1984.

Union Carbide offered last Thursday to give the court an affidavit pledging three billion dollars in assets, in an attempt to have the injunction lifted against the rest.

Today’s decision came after the ‘Company agreed to accept a court appointed value who will certify every three months that the U.S. ‘based firm is maintaining the required assets.

UCC had offered to provide a Valuer but Indian government lawyers objected and Judge Patel ruled that he would choose one from two lists of six candidates, with the company and the government each presenting a list.

“We are pleased that our offer has been accepted by the court”, a company’s spokesman said. “We firmly believe that the recapitalization plan will benefit everyone concerned”,

Union Carbide said it would benefit financially from selling assets, including its headquarters in Danbury, Connecticut and thus be in a better position to pay any creditors.

Proceeds will be used to redeem ‘company bonds worth 2.5 billion dollars which carry heavy interest charges that UCC says threaten its survival.

A company statement said the pledge to the court did not amount to any admission of liability.

Union Carbide has filed countersuit in the Bhopal court alleging that the Indian government and the government of Madhya Pradesh state were partly responsible for the disaster.

Judge Patel told Reuters he expected the case to last another 18 months.

He ordered Union Carbide to give its written reply to the Indian government’s case by December 16 for the government to present a rejoinder by January 7 next year. He said the court should start hearing arguments on January 12.

Article extracted from this publication >> December 5, 1986