1
1 SUPERIOR COURT OF NEW JERSEY
LAW DIVISION:MIDDLESEX COUNTY
2 DOCKET NO.: L-7959-07 AS
3
4
5 GEORGETTE GRAU, Individually and as
Executrix to the Estate of William Grau,
6
Plaintiff,
7
8 Vs.
9 ALFA LAVAL, INC., et al.,
10 Defendants.
11
12
13 VIDEOTAPED DEPOSITION of DAVID BEAVENS,
14 taken by Plaintiff, at the offices of Condon &
15 Forsyth, LLP, 7 Times Square, New York, New York
16 10036, on Tuesday, June 16, 2009, commencing at
17 10:15 oclock a.m., before Debra DiBenedetto, a
18 Shorthand (Stenotype) Reporter and Notary Public
19 within and for the State of New York.
20
21
22 BRODY DEPOSITION SERVICES
7 Elm Street
23 Westfield, New Jersey 07090
(908) 789-2000
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1 A P P E A R A N C E S:
2
3 COHEN, PLACITELLA & ROTH, P.C.
4 Attorneys for Plaintiff
5 127 Maple Avenue
6 Red Bank, New Jersey 07701
7 BY: WILLIAM L. KUZMIN, ESQ.
8
9 CONDON & FORSYTH, LLP
10 Attorneys for Resco Holdings
11 Times Square Tower
12 7 Times Square
13 New York, New York 10036
14 BY: JOHN D. HORENSTEIN, ESQ.
15 LILI F. BENEDA, ESQ.
16
17 McGIVNEY & KLUGER, P.C.
18 Attorneys for Defendants, Joule,
19 Madsen, Bergen, Milton Roy, Raritan
20 Kraemer Gunite, Lawrence Rupp,
21 Flowserve, NY Protective Coverings
22 23 Vreeland Road, Suite 220
23 Florham Park, New Jersey 07932
24 BY: MICHELE MITTLEMAN, ESQ.
25
2
1 A P P E A R A N C E S (Contd):
2
3 LAW OFFICE OF KEVIN C. GRUBB, P.A.
4 Attorneys for Union Pump
5 1465 State Route 31 S
6 Annandale, New Jersey 08801-3129
7 BY: AMARYAH L. JU, ESQ.
8
9 MORGAN, LEWIS & BOCKIUS, LLP
10 Attorneys for Yarway Corporation,
11 Grinnell
12 502 Carnegie Center
13 Princeton, New Jersey 08540-6289
14 BY: CHRISTOPHER IANNICELLI, ESQ.
15
16 KENT & McBRIDE, P.C.
17 Attorneys for Alfa Laval, Koenig, Pulmosan,
18 Marsam, Marshall, Mooney, T.J. McGlone,
19 555 US Highway 1S
20 Iselin, New Jersey 08830-3179
21 BY: LISA PEREZ, ESQ.
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1 A P P E A R A N C E S (Contd):
2
3 CONNELL FOLEY, LLP
4 Attorneys for Frank A. McBride Co.
5 85 Livingston Avenue
6 Roseland, New Jersey 07068
7 BY: CATHERINE G. BRYAN, ESQ.
8
9 McELROY, DEUTSCH, MULVANEY & CARPENTER, LLP
10 Attorneys for Rockwell Automation,
11 as successor by merger to Allen
12 Bradley, Exxon/Mobil
13 1300 Mount Kemble Avenue
14 Morristown, New Jersey 07962-2075
15 BY: BRIAN SORENSEN, ESQ.
16
17 OTOOLE, FERNANDEZ, WEINER, VAN LIEU, LLC
18 Attorneys for Clark Reliance
19 60 Pompton Avenue
20 Verona, New Jersey 07044-2946
21 BY: JOHN B. MONAHAN, ESQ.
22
23
24
25
5
1 A P P E A R A N C E S (Contd):
2
3 SCHNADER, HARRISON, SEGAL & LEWIS, LLP
4 Attorneys for E&B Mill Supply
5 140 Broadway, Suite 3100
6 New York, New York 10005-1101
7 BY: ERIC A. BODEN, ESQ.
8
9 HOFHEIMER, GARTLIR & GROSS, LLP
10 Attorneys for Rapid American
11 530 Fifth Avenue
12 New York, New York 10036
13 BY: BRIAN J. SORENSEN, ESQ. (Associate)
14
15 SEDGWICK, DETERT, MORAN & ARNOLD, LLP
16 Attorneys for Foster Wheeler
17 3 Gateway Center
18 Newark, New Jersey 07102-4061
19 BY: BRIDGET M. POLLOWAY, ESQ.
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21
22
23
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25
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1 A P P E A R A N C E S (Contd):
2
3 HARWOOD LLOYD
4 Attorneys for Schiavone Bonomo
5 130 Main Street
6 Hackensack, New Jersey 07601-7102
7 BY: CYNTHIA B. MOLKENTHIN, ESQ.
8
9
10 Also present: Gerard J. Genna, Videographer
11
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25
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1 I N D E X O F E X A M I N A T I O N S
2
3 Witness: Page
4 David Beavens
5 By Mr. Kuzmin 8
6
7 * * *
8
E X H I B I T S
9
10 Plaintiffs Description Page
For Ident.
11
12 1 Notice of Deposition 30
13 2 Certificate of Incorporation for M.W. 31
14 Kellogg
15 3 Filing document, M.W. 35
16 Kellogg-Pullman, Inc.
17 4 Document bearing Bates No. 029 35
18 5 Merger document 37
19 6 Name change document 38
20 7 Excerpt of Deposition of Ray Pacini 46
21 8 Agreement of Sale 55
22 9/10 Documents 66
23 11 Annual Franchise Tax Report, 2002 68
24 12 Answers to Interrogatories 79
25
8
1 THE VIDEOGRAPHER: Todays
2 deposition will be video recorded.
3 The microphones are live and the
4 camera will continue to run
5 throughout the entire deposition as
6 long as the deposition is continuing
7 on the record.
8 We are now on the record in
9 the matter of Georgette Grau,
10 individually and as executrix to the
11 Estate of William Grau, Plaintiff,
12 versus Alfa Laval, Inc., et al.,
13 Defendant.
14 Todays date is June 16th,
15 2009. The time is approximately
16 10:15 a.m. This is a video recorded
17 deposition of David Beavens, being
18 taken at Condon & Forsyth, LLP, New
19 York City. I am the camera
20 operator, my name is Gerard Genna,
21 from New Jersey Certified Legal
22 Videographer. The court reporter is
23 Debra DiBenedetto from Brody.
24 Appearances from attorneys will be
25 noted in the transcript. Debra,
9
1 please, administer the oath.
2 D A V I D B E A V E N S, called as a witness,
3 having been first duly sworn by Debra
4 DiBenedetto, a Notary Public within and
5 for the State of New York, was examined
6 and testified as follows:
7 EXAMINATION BY
8 MR. KUZMIN:
9 Q Mr. Beavens, good morning.
10 A Good morning.
11 Q My name is William Kuzmin, Im an
12 attorney with the firm of Cohen, Placitella &
13 Roth, and I represent the plaintiff on the
14 asbestos matter that was filed.
15 Its my understanding that youre
16 being produced here today as a corporate
17 representative of Resco Holdings. Is that your
18 understanding?
19 A Thats my understanding, yes.
20 Q And I believe that youve already
21 been deposed on at least one other occasion in
22 the past as a representative of Resco Holdings,
23 is that correct?
24 A Thats correct.
25 Q Okay. And that was back in 2003?
7
1 MR. HORENSTEIN: Bill,
2 youre going to stipulate the usual
3 stipulations, correct?
4 MR. KUZMIN: Objection as to
5 form, and everything else reserved
6 until –
7 MR. HORENSTEIN: And
8 privilege.
9 MR. KUZMIN: Yeah,
10 privilege, confidentiality subject
11 to a court order as set forth in the
12 rules. Everything else is reserved
13 until trial. Objection by one,
14 objection for all.
15 MR. HORENSTEIN: Okay, good.
16 MR. KUZMIN: Good?
17 MR. HORENSTEIN: Thank you.
18 MR. KUZMIN: Okay.
19 Q Other than that deposition in
20 2003, have you ever been deposed as a corporate
21 representative of Resco any other time?
22 A One other matter.
23 Q Okay. And when was that other
24 matter?
25 A Im not sure of the exact dates.
8
1 A couple of years ago, related to this, to the
2 — as a deposition witness for a related matter
3 in Boston.
4 Q Did that matter in which you
5 appeared as a representative of Resco, was that
6 an asbestos mother?
7 A It was dealing with insurance,
8 matters related to this, yes.
9 Q Okay. Even though you have been
10 deposed before, Im just going to go over some
11 quick ground rules, and get through those and
12 then well get to the heart of the matter.
13 Okay?
14 A All right.
15 Q Seated to my right and your left
16 is a court reporter. As youre aware, the court
17 reporters going to take down everything weve
18 said here today. That testimony will then be
19 placed in a booklet called a transcript and that
20 can be used for many different purposes. In
21 order to have a clear and accurate record, what
22 I need you to do, number one, is, make sure that
23 all your answers are verbal. We cant have
24 shrug of the shoulders, nod of the head. Even
25 though this is being videotaped, the transcript
9
1 is the official court record and we need to make
2 that as clear as possible. Okay?
3 A I understand.
4 Q The second thing is, we can only
5 have one person speaking at a time.
6 A All right.
7 Q This way, the record remains
8 clear. Therefore, what Id ask is that you wait
9 for me to finish my question before giving your
10 answer, likewise, Ill wait for you to finish
11 your answer before I ask another question. If I
12 happen to cut you off, dont be afraid to stop
13 me and tell me you werent done with your
14 answer, okay, Ill be more than happy to give
15 you enough time to fully and completely answer
16 the question thats been asked. Okay?
17 A All right.
18 Q Were going to be talking about
19 subject matter from a number of years ago. If
20 you dont recall the answer to a question or
21 dont have that information, perfectly
22 acceptable for you to tell me that. I dont
23 want you to guess at the answers to any of the
24 questions that youre being asked. Likewise,
25 your attorneys dont want you to guess. If you
10
1 provide me with an answer, thats going to be
2 taken that you understood the question and that
3 you have knowledge associated with the ability
4 to provide that answer. Do you understand that?
5 A I do.
6 Q Okay. Along those same lines, if I
7 ask a question that you dont understand or that
8 you can answer in a number of different ways,
9 please, feel free to let me know and Ill try to
10 either rephrase it or context it in such a
11 manner that you do understand the question and
12 can answer it. Okay?
13 A Sure.
14 Q All right. Before we get going,
15 have you had an opportunity to confer with your
16 attorney — and I dont want you to tell me what
17 was discussed — but did you have an opportunity
18 to meet with your attorneys?
19 A I have.
20 Q And before we get going, is there
21 anything that youd like to discuss with them
22 prior to us getting into this deposition?
23 A No, ready to get started.
24 Q Okay. Now, youre currently –
25 strike that.
11
1 Are you currently employed by
2 Resco Holdings?
3 A Im employed by Wheelabrator
4 Technologies which is a parent company to Resco
5 Holdings.
6 Q And what is your position for
7 Wheelabrator?
8 A Vice President, Finance.
9 Q And that was the same position
10 that you held when you were deposed in the
11 Turner matter in 2003, is that correct?
12 A Thats correct.
13 Q Okay. And just so that my
14 information is accurate, going back to 1985 you
15 started off employed by UGI Corp. as a senior
16 staff accountant?
17 A At that time, yes.
18 Q Okay. And then you joined
19 Wheelabrator and I think Gloucester Waste
20 Facility in 1988?
21 A Wheelabrator, yes, in 1988.
22 Q And then you wound up to be the
23 vice president of finance for Biogrowth Systems
24 which was a wholly owned subsidiary of Resco, is
25 that right?
12
1 A Thats correct.
2 MR. HORENSTEIN: Would you
3 read that back, so I can hear the
4 full question, please.
5 (Question read by the
6 reporter.)
7 A Point of clarification. It was a
8 wholly owned subsidiary of Wheelabrator Water
9 Technologies, which wasnt part of, I dont
10 believe part of Resco Holdings. Im not clear
11 on that, how that reported up through the
12 organization.
13 Q Okay. And that was in 1995, is
14 that accurate?
15 A About that time, yes.
16 Q Okay. And then in 2000 Biogrowth
17 was sold to a third party, Synagro Tech?
18 A Synagro Technologies.
19 Q Synagro. And you stayed there till
20 2001, when you came back to Wheelabrator in your
21 current capacity as Vice President of Finance?
22 A Thats correct.
23 Q And in your capacity as the Vice
24 President of Finance for Wheelabrator, do you
25 have any association with Resco Holdings?
13
1 A Resco Holdings is a subsidiary of
2 Wheelabrator Technologies.
3 Q And do you hold any position
4 within Resco?
5 A Im an officer of Resco Holdings,
6 LLC, yes.
7 Q And what is your title as an
8 officer of Resco?
9 A Vice president and Assistant
10 Treasurer.
11 Q And again, that was the same
12 position that you held back when you were
13 deposed in 2003?
14 A Correct.
15 Q And have you had any other duties,
16 titles or responsibilities added since that time
17 in 2003 for Resco?
18 A For Resco, no.
19 Q And Resco, in its capacity as a
20 wholly owned subsidiary of Wheelabrator, has
21 separate stock?
22 A Yes.
23 Q Who are the other officers of
24 Resco Holdings?
25 A I dont know that I could name
14
1 them off the top of my head.
2 Q Okay. Is there a president of
3 Resco Holdings?
4 A Yes.
5 Q And who is that person?
6 A I believe its Mark Weidman.
7 Q Mark Weidman?
8 A Um-hum.
9 Q Is there a chief executive officer
10 of Resco Holdings?
11 A I dont believe so.
12 Q And you testified that youre the
13 Assistant Treasurer. Whos the Treasurer of
14 Resco Holdings?
15 A I believe its Greg Robertson.
16 Q And is there a recording secretary
17 of Resco Holdings?
18 A I believe its Mary Vangile.
19 Q That was Mary Vangele — Vangile?
20 A V-A-N-G-I-L-E.
21 Q Okay. In the course of your
22 preparation for the deposition today, did you
23 have an opportunity to review any documents?
24 A I did, yes.
25 Q And do you recall what those
15
1 documents were?
2 A There were numerous documents.
3 They were related to various mergers or
4 reorganizations and name changes of Resco
5 Holdings in its corporate history.
6 Q Did you cond — strike that.
7 Were those documents provided to
8 you by counsel?
9 A Yes.
10 Q Okay. Did you conduct any type of
11 independent review for documents other than
12 those provided by counsel?
13 A Over the years we have, as related
14 to these matters in other cases, yes.
15 Q During the course of the
16 independent review thats been done in the past,
17 specifically with regards to this case, did you
18 find any documents that supplemented those that
19 had been provided to you by counsel?
20 A No.
21 Q During the course of your review
22 for documents that had been provided to you by
23 counsel, did you notice any documents that
24 werent included in the packet that you had seen
25 from other cases?
16
1 A No.
2 Q And the independent review that
3 was conducted in the past, were you assisted on
4 that by Mary Vangile?
5 A Yes.
6 Q And that was similar or that was
7 the review that was previously done that you
8 testified to at your deposition in 2003, is that
9 correct?
10 A Yes, um-hum, yes.
11 Q Other than the review that was
12 done in 2003, have you conducted any subsequent
13 reviews for documents?
14 A Weve continued researching to
15 determine that if theres further documentation.
16 We really havent found much in the way of new
17 information, though.
18 Q Okay. So, I take it then you
19 didnt find any documents relating to any work
20 performed by M.W. Kellogg at Exxon Bayway in the
21 1950s, correct?
22 A Thats correct.
23 Q Do you know of anyone who would
24 have more knowledge about the existence of any
25 of those documents than yourself pertaining to
17
1 work performed by Kellogg at Exxon Bayway in the
2 1950s?
3 A No.
4 Q And would you, therefore, say that
5 you have the most knowledge pertaining to the
6 existence of documents outlining work performed
7 by M.W. Kellogg?
8 A I believe so.
9 Q In addition to documents, did you
10 have an opportunity to review any depositions?
11 A Yes.
12 Q Okay. Did you review your
13 deposition from 2003?
14 A In the past two weeks, yes.
15 Q Okay. Did you review the
16 deposition — any depositions done of Ray
17 Pacini?
18 A Not in preparation for today but
19 previously.
20 Q Okay. How about William Buccella?
21 A Again, not, not in preparation in
22 the last two weeks but previously.
23 Q Okay. Did you review any
24 depositions of a gentleman by the name of Donald
25 Hardy?
18
1 A I think there were excerpts of
2 that deposition.
3 Q In your current position is your
4 boss still the President of Wheelabrator
5 Technologies?
6 A Yes.
7 Q And is that person still Drennan
8 Lowell?
9 A No.
10 Q Okay. Who is the President of
11 Wheelabrator?
12 A Mark Weidman.
13 Q And thats the same person who you
14 identified as the President of Resco Holdings?
15 A Yes.
16 Q And does Mr. Weidman report to the
17 President and CEO of Waste Management?
18 A He reports to the COO of Waste
19 Management, its present COO, thats Larry
20 ODonnell.
21 Q Is Maurice Meyers still an officer
22 of Waste Management, do you know?
23 A No.
24 Q And Mr. ODonnell, you said, is
25 the present and COO?
19
1 A Yes.
2 Q Whos the CEO of Waste Management?
3 A David Steiner.
4 Q And the address of Resco Holdings
5 is Four Liberty Lane West in Hampton, New
6 Hampshire, is that accurate?
7 A Thats accurate, yes.
8 Q Rescos incorporated in — Resco
9 Holdings is incorporated in Delaware?
10 A Yes.
11 Q And Rescos primary function –
12 and just for terms of clarification, when I
13 refer to Resco, Im referring to Resco Holdings,
14 okay, just, I may slip up, but just so were on
15 the same page. Okay?
16 A Understood.
17 Q Rescos primary function is as a
18 holding company, is that right?
19 A Thats correct.
20 Q And its not — it — strike that.
21 The company itself, Resco, is not
22 an operating company, correct?
23 A Thats correct.
24 Q And Resco Holdings, itself,
25 doesnt have any employees, is that right?
20
1 A Thats correct.
2 Q But there are people who are
3 employed by companies that are part of Resco
4 Holdings; is that a fair characterization?
5 A Yes, thats fair.
6 Q Now, in your position as the Vice
7 President of Finance — Im sorry, strike that.
8 In your position as the Assistant
9 Treasurer for Resco Holdings, youre aware of
10 the consolidated Resco financials, is that
11 correct?
12 A Yes.
13 Q And as of 2003, the annual revenue
14 of Resco was 800-million dollars, is that right?
15 A Sounds about right.
16 Q Okay. Do you know what it is now?
17 A Little bit more than that.
18 Q Okay. For 2008, what was it?
19 A About 900.
20 Q And as of 2003, Resco assets
21 totaled in between 3.2 or 3.3 billion, is that
22 right?
23 A Sounds about right.
24 Q Okay. And do you know what it was
25 figured to be at the end of 2008?
21
1 A No material change. Probably a
2 little bit less, we did some divestitures, but
3 again, not, not a material change.
4 Q And Resco is a hundred percent
5 owned by Wheelabrator, is that right?
6 A Thats correct.
7 Q And David Steiner at one point who
8 you identified as the CEO of Waste Management,
9 was at one time a director of Wheelabrator, is
10 that correct?
11 A Thats correct.
12 Q Is he still a director of
13 Wheelabrator?
14 A I dont believe so.
15 Q And its my understanding from
16 reading your testimony in 2003, that David
17 Steiner, as the director of Wheelabrator, was
18 the head guy? Would that be fair?
19 MR. HORENSTEIN: Object to
20 form.
21 A Can you rephrase?
22 Q Sure. Its my understanding from
23 reading your testimony in 2003, that David
24 Steiner was basically the boss at Wheelabrator.
25 MR. HORENSTEIN: Object to
22
1 form.
2 Q Is that fair?
3 A The boss at Wheelabrator. From a
4 day-to-day perspective or?
5 Q Right, such as rather than him
6 being the President and CEO, his title as
7 Director made him the guy at the top.
8 MR. HORENSTEIN: Object to
9 form.
10 A Organizationally, I mean, on a
11 day-to-day basis, he wasnt the boss of the
12 oversight of the day-to-day over operations, no.
13 On an organizational chart, sure.
14 Q Okay. Who is now at the — who is
15 at the top of the organizational chart for
16 Wheelabrator?
17 A In terms of being a director or?
18 Q Yeah. Who took over for David
19 Steiner? Let me put it that way.
20 A Mark Weidman.
21 Q And do you know when that change
22 occurred?
23 A Within the past three years, Id
24 say.
25 Q And Wheelabrator operates in
23
1 Hampton, New Hampshire as well, is that right?
2 A In –operates. How so?
3 Q Their office, main office is in
4 Ham –
5 A We have our main office in
6 Hampton, New Hampshire, yes.
7 Q And is that the same address as
8 Resco?
9 A Yes, it is.
10 Q And physically is it the same
11 office at Resco?
12 A Yes.
13 Q So, what Im going to show you
14 first is a deposition notice.
15 All right. Sir, have you ever seen
16 this document before?
17 A I have.
18 Q Okay. When was the first time you
19 saw it?
20 A In the last couple of days.
21 Q Now, its my understanding that
22 youre being produced here today with knowledge
23 relating to corporate succession of M.W. Kellogg
24 ultimately into Resco.
25 MR. HORENSTEIN: Objection
24
1 to the form.
2 Q Let me strike that. Let me see if
3 I can ask it a different way.
4 Its my understanding that you
5 have knowledge pertaining to corporate
6 succession involving various companies including
7 Kellogg, Wheelabrator, and Resco Holdings. Is
8 that your understanding?
9 A Yes.
10 Q Okay. Do you have any knowledge
11 pertaining to the use of asbestos containing
12 products by M.W. Kellogg?
13 A No.
14 Q Okay. Do you know if theres
15 anyone within the Resco Holdings structure that
16 would have knowledge pertaining to the use of
17 asbestos containing products by M.W. Kellogg?
18 A No, I seriously doubt that anybody
19 within the structure that exists today that
20 would have that knowledge.
21 Q Okay. Do you have any knowledge
22 pertaining to work performed at Exxon Bayway in
23 the Fifties by M.W. Kellogg?
24 A No.
25 Q Do you know if theres anyone
25
1 within the Resco organization that would have
2 knowledge pertaining to work performed by M.W.
3 Kellogg at Exxon Bayway?
4 A Again, I dont think anyone exists
5 today that would have that knowledge.
6 Q Do you know — strike that.
7 Do you have any knowledge
8 pertaining to the knowledge of hazards of the
9 use of asbestos by M.W. Kellogg?
10 A No.
11 Q Do you know if theres anyone
12 within the Resco organization that would have
13 knowledge pertaining to hazards associated with
14 the use of asbestos by M.W. Kellogg?
15 A No. Again, I dont believe there
16 is anybody in the company today that has that
17 type of knowledge.
18 Q Okay. Sir, what Id like you to do
19 is take a look at — take a look at that
20 document and let me know — there are certain
21 areas that are listed on that document. Let me
22 know if theres any, other than what weve
23 talked about that you are here for, that
24 encompass your attendance at this deposition
25 today. Do you understand?
26
1 A I think I do, let me just –
2 Q Okay, sure.
3 A — take a look at the document,
4 Ill come back and you can ask it one more time.
5 (Witness peruses document.)
6 A Okay. Would you ask the question
7 again, please.
8 Q Sure. Is there — other than what
9 weve talked about concerning your appearance
10 here to discuss corporate succession, is there
11 anything else on that deposition notice where
12 you have knowledge of, that you can provide
13 testimony for us today?
14 A No.
15 Q Okay. Do you know if there is
16 anyone within the Resco organization that would
17 have knowledge to discuss any of those areas on
18 that deposition notice?
19 A No. Again, Im fairly certain
20 that no one in the organization today would have
21 that knowledge.
22 Q And just for point of
23 clarification, do you know of anyone who is no
24 longer part of Resco that is retired, quit,
25 moved on, that would have knowledge pertaining
27
1 to subject matter contained in that deposition
2 notice?
3 MR. HORENSTEIN: Could you
4 just read that back, please.
5 (The record was read by the
6 reporter.)
7 A No.
8 Q So, youre it?
9 A Im it.
10 MR. HORENSTEIN: Object to
11 form.
12 Q All right, sir. What were going
13 to do is, and youre going to have to bear with
14 me because Im just a lowly litigation attorney
15 and this corporate stuff confuses the heck out
16 of me, we were provided a number of documents
17 relating to succession involving M.W. Kellogg
18 and Resco, and were going to go through them
19 and I just want to make sure that my
20 interpretation or my understanding of these
21 documents is correct. Okay?
22 A Ill help you as best I can.
23 Q Okay, great.
24 (Notice of Deposition was
25 marked as Deposition Exhibit No. 1
28
1 for identification, as of this
2 date.)
3 Q Have you had an opportunity to
4 review that document?
5 A I have.
6 Q Have you ever seen that document
7 before?
8 A I have.
9 Q And would I be correct in stating
10 that this document dated January 14th, 1920, is
11 a Certificate of Incorporation for M.W. Kellogg?
12 A Thats correct.
13 Q And this document outlines the
14 business that M.W. Kellogg is engaged in?
15 A It does.
16 Q And according to this document,
17 the business of M.W. Kellogg Company is to
18 perform work in, in part, in refineries?
19 MR. HORENSTEIN: Object to
20 form.
21 A Can you reference where it
22 specifically states that?
23 Q Sure. If you turn to page two,
24 Bates No. CFG 03, which is the second page,
25 first full paragraph, at the end it says, Any
29
1 process concerning the refining and manufacture
2 of petroleum, gasoline, kerosine or oil.
3 A Yeah, I see that.
4 Q Okay. And is it, is my
5 understanding correct, sir, that this document
6 basically establishes M.W. Kellogg as a company?
7 A It does. As a corporation.
8 Q As a corporation in Delaware?
9 A Yes.
10 Q Okay. Okay, were done with that.
11 MR. KUZMIN: Well mark that
12 as Exhibit 2.
13 (Certificate of
14 Incorporation for M.W. Kellogg was
15 marked as Deposition Exhibit No. 2
16 for identification, as of this
17 date.)
18 Q Sir, have you had an opportunity
19 to review those documents?
20 A I have.
21 Q And have you ever seen those
22 documents before?
23 A I have.
24 Q And can you describe for me what
25 those documents, what this — strike that –
30
1 what this document that is going to be marked
2 P-3 is?
3 A This is a merger of M.W. Kellogg
4 Company into Pullman, Incorporated.
5 Q And what was the effect of this
6 document?
7 A Pullman, Incorporated became the
8 parent company and the business of M.W. Kellogg
9 was a subsidiary.
10 Q According to this document, let me
11 show this to you, too. Theres a bit of
12 confusion, but thats just me.
13 MR. HORENSTEIN: Are you
14 showing these to me? You want the
15 witness to look at them?
16 MR. KUZMIN: Yes, please.
17 A Okay.
18 Q Okay. Now, sir, the confusion that
19 I had and Im hoping you can resolve this for
20 me, is, the document Bates stamp 024 which is
21 the last page of the first stack has a signature
22 page on it.
23 A Okay, yes.
24 Q Do you see that, okay. And then
25 from Bates stamp 025 through 029, which is the
31
1 most recent stack I gave you, it starts at page,
2 I believe, five, and goes on and then theres
3 another what looks like signature page.
4 Is document 029 a separate
5 standalone document?
6 A It appears to be.
7 Q Okay. Can you tell me what Bates
8 stamps 025 through 028, what they refer to?
9 A This looks like a reorganization
10 of the business in effect at that time. I think
11 there — let me just read it one more time.
12 Within Pullman, Incorporated, theyre creating
13 various divisions, underneath Pullman,
14 Incorporated, of which the M.W. Kellogg company
15 becomes a division of Pullman, Incorporated and
16 Pullman Kellogg, and its name changed to Pullman
17 Kellogg which is also a division of Pullman,
18 Incorporated. So its a name change basically
19 happening.
20 Q Okay. The document youre
21 referencing, I believe is 029?
22 A Um-hum.
23 Q Is that part of the filing from
24 January 14th, 1964, or was that a separate
25 document?
32
1 A It looks to be a separate document
2 since its dated October 15th, 1975.
3 Q Okay. Now, the other three or four
4 pages that weve got there, do you know what
5 those go to?
6 MR. HORENSTEIN: If you can,
7 if not, I can check our production,
8 see if we left a page or two off.
9 MR. KUZMIN: Sure, fair
10 enough.
11 MR. HORENSTEIN: We could do
12 it on a break.
13 MR. KUZMIN: Yeah, thats
14 fine.
15 THE WITNESS: I dont think
16 I can, theres no dating on these
17 that I can see.
18 MR. KUZMIN: Okay. Fair
19 enough, sir. You can hand those
20 over to the court reporter, well
21 get them marked. And what Id like
22 to do is mark the 029 as a separate
23 document.
24 (Filing document, M.W.
25 Kellogg-Pullman, Inc. was marked as
33
1 Deposition Exhibit No. 3 for
2 identification, as of this date.)
3 (Document bearing Bates No.
4 029 was marked as Deposition Exhibit
5 No. 4 for identification, as of this
6 date.)
7 Q Have you had an opportunity to
8 review that document, sir?
9 A I have.
10 Q Have you ever seen that document
11 before?
12 A I have.
13 Q And can you describe for us
14 exactly what that document is?
15 A Its a merger document, merging
16 Pullman, Incorporated into an entity titled
17 Wheelabrator Chicago, Inc. and then changing the
18 name of the surviving entity to Pullman,
19 Incorporated.
20 Q And would I be correct in stating
21 that at this time then M.W. Kellogg and Pullman
22 became part of Wheelabrator which then changed
23 the name to Pullman, Incorporated?
24 A Became part of Wheelabrator
25 Chicago, Inc. and then became Pullman,
34
1 Incorporated, yes.
2 Q Okay. And would those — at that
3 point would M.W. Kellogg be considered a
4 subsidiary of Wheelabrator Chicago?
5 MR. HORENSTEIN: Object to
6 form.
7 A It would be a subsidiary of
8 Pullman, Incorporated which is the surviving
9 enterprise.
10 Q Okay. And at this point even
11 with — well, strike that.
12 From what youve seen in these
13 documents, the 1964 document and the 1980
14 document, I believe identified as P-3 and then
15 this new one which will be P-5, was M.W.
16 Kelloggs business the same as when it was first
17 incorporated?
18 A I didnt see any change in
19 business of M.W. Kellogg, so I would say yes, as
20 a division of Pullman, Incorporated, yes.
21 MR. KUZMIN: All right,
22 well mark that P-5, please.
23 (Merger document was marked
24 as Deposition Exhibit No. 5 for
25 identification, as of this date.)
35
1 Q Did you have an opportunity to
2 review that document, sir?
3 A I have.
4 Q And have you ever seen this
5 document before?
6 A I have.
7 Q And would I be correct in saying
8 this is simply a name change from M.W. Kellogg
9 to Pullman, Inc.?
10 A Other way around, name change from
11 Pullman, Incorporated to the M.W. Kellogg
12 Company.
13 Q So, the entity that was created
14 through the document previously marked as P-5, I
15 believe, when Pullman merged with Wheelabrator
16 and became Pullman, Incorporated, that entity
17 now by and through this document is, becomes
18 M.W. Kellogg?
19 A When Pullman merged with
20 Wheelabrator Chicago, Inc., became Pullman,
21 Incorporated, Pullman, Incorporated now becomes
22 the M.W. Kellogg Company.
23 Q And the M.W. — or M.W. Kellogg
24 that was incorporated in 1920 that merged with
25 Pullman, Inc. in 1964 and was part of that group
36
1 that became the new Pullman, Incorporated in
2 1980, is still part of that entity, correct?
3 A It appears to be.
4 Q Okay. Were done with that one.
5 MR. KUZMIN: That will be
6 P-6.
7 (Name change document was
8 marked as Deposition Exhibit No. 6
9 for identification, as of this
10 date.)
11 Q All right, sir, have you had an
12 opportunity to the review this document?
13 A I have.
14 Q Okay. And this document is
15 basically a sale of assets by the M.W. Kellogg
16 Company which was formerly Pullman,
17 Incorporated, sale of assets and liabilities to
18 Kellogg Newco One, is that correct?
19 A Its a transfer and assignment of
20 certain assets.
21 Q Okay. Now, what kind of entity
22 was Kellogg Newco One?
23 A Im sorry, could you rephrase.
24 Q Sure. Was Kellogg Newco One, was
25 it a holding company, was it an operating
37
1 company? What type of entity was it?
2 A Im not being familiar with
3 exactly this transaction, it appears to be more
4 of a holding company.
5 Q Okay. Now, the M.W. Kellogg
6 Company that weve discussed starting in 1920
7 through 1981 — strike that.
8 The assets and liabilities that
9 were sold by M.W. Kellogg Company which is
10 formerly Pullman, Incorporated, to Kellogg Newco
11 One, did that involve the sale of assets and
12 liabilities for the company that performed work
13 at refineries and was incorporated in 1920?
14 A I dont think I can specifically
15 state that it was that assignment.
16 Q Okay.
17 A For that specific that they
18 performed the work at the refinery. I dont
19 think I can do that from this document.
20 Q Okay. The document also
21 specifically states that the sale excluded the
22 assets of quote, old Pullman, Incorporated, is
23 that correct?
24 A Yes.
25 Q Okay. What constituted — and
38
1 then it also goes on to say that other than M.W.
2 Kellogg and assets that were transferred to
3 Kellogg Newco Two. What is Kellogg Newco Two?
4 A Its another subsidiary of M.W.
5 Kellogg, like Kellogg Newco One. So, there were
6 certain assets of M.W. Kellogg that were
7 distributed, assigned to Newco One and certain
8 that were assigned to Newco Two.
9 Q Okay. And the companies that were
10 assigned to Newco Two are these subsidiaries
11 that are identified on Bates page 042, is that
12 correct?
13 A Yes.
14 Q Okay. And so, Newco Two only held
15 the subsidiaries of M.W. Kellogg identified on
16 042 and not the main M.W. Kellogg entity itself,
17 would that be accurate?
18 A That appears to be accurate.
19 Q Okay. So, the main M.W. Kellogg
20 entity was part of Newco One pursuant to this
21 sale of assets and liabilities?
22 A That appears to be correct, yes.
23 Again, there was a division of the assets that
24 occurred so some went to Newco One, some went to
25 Newco Two.
39
1 Q Okay. Now, if you look at Bates
2 No. 040, this document is signed on behalf of
3 Kellogg Newco One by, it looks like a Patrick
4 Link.
5 A Your guess is as good as mine.
6 Q Okay. And then if you go to the
7 next page 041, receipt is acknowledged on behalf
8 of Kellogg Newco Two, by Patrick Link.
9 A Okay.
10 Q Looking at this document and those
11 signatures, does it appear to be the same
12 person?
13 A Im not a handwriting expert but,
14 you know, laymans explanation, it appears to be
15 the same person.
16 Q Okay. Do you know what the
17 relationship was, if any, between Kellogg Newco
18 One and Kellogg Newco two?
19 MR. HORENSTEIN: Object to
20 form.
21 A No. I think at this point it
22 would be conjecture, no.
23 Q Okay. Have you ever seen any
24 documents that outline the relationship, if any,
25 between Kellogg Newco One and Kellogg Newco Two?
40
1 A Beyond what you have here, no.
2 Q Yes, okay.
3 A I, I cant recall any. I mean, I
4 look at a lot of documents so I just want to go
5 back and think, I, you know, there could be
6 something out there that Im not recalling at
7 this time, but Id have to go back through the
8 files.
9 Q If there had been something, is
10 that something that would have been produced to
11 your attorneys or to the attorneys for Resco?
12 A If weve had them, yes, we would
13 have produced them.
14 Q So, the fact that its not in
15 here, can you say whether or not after, you
16 talked about conducting a search previously that
17 it doesnt exist, to the best of your knowledge?
18 A If we had the documents, we would
19 have made it available. But, again, I cant,
20 you know, theres a lot of documents I reviewed,
21 so to recall specifically whether I reviewed one
22 or not, Id have to go back and review the
23 documents again.
24 Q Okay.
25 A Sorry.
41
1 Q All right, sir, so what Im going
2 to ask, if you could conduct a review and see if
3 you can find any documents relating to,
4 regarding a relationship between Newco One –
5 Kellogg Newco One and Kellogg Newco Two.
6 A Now?
7 Q No, well, not now. We can all the
8 sit around if you want but I dont think –
9 A Again, you know, weve done
10 exhaustive research. What we have discovered
11 weve made available. So its not that Im
12 saying it doesnt exist or it does exist, Im
13 not recalling the answer to your specific
14 question.
15 Q Fair enough.
16 MR. KUZMIN: So that Id
17 just ask that if it is in existence
18 it be produced.
19 MR. HORENSTEIN: Well take
20 it under advisement.
21 MR. KUZMIN: Thank you very
22 much.
23 MR. HORENSTEIN: Could we
24 take a quick break?
25 MR. KUZMIN: Sure.
42
1 THE VIDEOGRAPHER: We are
2 off the record at 11:01 a.m.
3 (Brief recess.)
4 THE VIDEOGRAPHER: Were
5 back on the record at 11:11 a.m.
6 BY MR. KUZMIN:
7 Q All right, sir, were back on the
8 record. And for purposes of brevity, lets cut
9 directly to the chase.
10 Is it your understanding that
11 Resco Holdings, LLC, is the successor to M.W.
12 Kellogg Company that performed work in the — at
13 petroleum work sites and was incorporated in
14 1920?
15 A Yes.
16 Q Okay. And thats along the lines
17 of the testimony that you gave in 2003
18 pertaining to corporate successorship, is that
19 correct?
20 A Yes.
21 Q And, so, therefore, from the time
22 that you laid everything out in 2003 until now,
23 there hasnt been any change in your opinion
24 concerning — or, Im sorry, Resco Holdings, as
25 a successor to M.W. Kellogg, is that correct?
43
1 A Thats correct.
2 Q Okay. And Im sorry, you probably
3 told me this before, but in the past did you
4 review the deposition of Ray Pacini?
5 A I have seen the deposition, yes.
6 Q This is just an excerpt of that
7 deposition. Just take a look at, Im just going
8 to reference page 28, line 15. Theres a copy
9 for you as well.
10 Okay, now, my question is simply,
11 page 28, line 15, as Ive shown you Mr. Pacini
12 says the same thing, correct?
13 MR. HORENSTEIN: Object to
14 form.
15 Q Im not asking you to agree with
16 him, disagree with him; just on that sheet of
17 paper he says the same thing?
18 MR. HORENSTEIN: Object to
19 form.
20 A He says what he says in the
21 document, so he seems to. Says, my
22 understanding is that Resco Holdings is a
23 successor to Kellogg.
24 Q Which is exactly the same thing
25 you told me a few seconds ago.
44
1 MR. HORENSTEIN: Object to
2 form.
3 A Whatever that means, but.
4 Q You can give that to the court
5 reporter and well mark that I guess P-7.
6 (Excerpt from deposition of
7 Ray Pacini was marked as Deposition
8 Exhibit No. 7 for identification, as
9 of this date.)
10 Q Im going to then move on. Im
11 going to hand your attorney quite a large stack
12 here. They give it to me, I give it right back
13 to them. Okay. And these are Bates stamped 043
14 all the way to 0210. Not going to go through
15 the whole thing. Specifically, I just want to
16 go to, Im going to ask you about Section 3.1,
17 but after you see it, and Im sure youve seen
18 it before.
19 A Okay.
20 Q I take it youve seen this
21 document before, sir?
22 A I have.
23 Q And this is an agreement, a
24 purchase agreement between Dresser, M.W. Kellogg
25 and the Henley Group, is that correct?
45
1 A And Kellogg Newco One as a
2 subsidiary to M.W. Kellogg, yes.
3 Q Can you tell me exactly what the
4 Henley Group was?
5 A The Henley Group was a holding
6 company. Cant tell you its exact corporate
7 history but it was a holding company of various
8 types of organizations and corporations of which
9 one was the M.W. Kellogg Company at this time.
10 Q Okay. Now, going to page Bates
11 No. 065.
12 A Okay.
13 Q Section 3.1 is an assumption of
14 liabilities and that refers to Dresser assuming
15 liability, is that correct?
16 A Yes.
17 Q Okay. And can you basically tell
18 me what your understanding of Section 3.1 is?
19 MR. HORENSTEIN: Object to
20 form.
21 A In general, its, its outlining
22 the assumption of liabilities that were agreed
23 to by the parties as part of this purchase and
24 sale agreement.
25 Q Okay. And according to this
46
1 section, Dresser is agreeing to assume various
2 liabil — or, is agreeing to assume the, quote,
3 assumed liabilities, which is defined as debts,
4 liabilities and obligations, whether actual,
5 contingent or primary or secondary. Do you see
6 that?
7 A Thats what it says, yes.
8 Q Okay. There is then, if you go to
9 Section, I guess its 3.2, there are certain
10 exclusions to that assumption of liability, is
11 that correct?
12 A Can you give me the Bates
13 reference number.
14 Q Sure. 069.
15 A 3.2, Excluded Liabilities, yes.
16 Q Okay. Now, theres a number of
17 excluded liabilities listed from Bates 069
18 through 072, is that correct?
19 A Yes.
20 Q Now, if you go to 3.2, Subsection
21 E, which is, I believe, 070.
22 A Yes.
23 Q Okay. An excluded liability is
24 any liability relating to violation, breach or
25 failure to observe any law applicable to the
47
1 business prior to the closing date.
2 Did I read that correctly?
3 A You did.
4 Q Okay. And the closing date on this
5 agreement was January of 1988 or sometime in
6 1988?
7 A Sometime in 1988. The contract is
8 dated January 11th, 1988.
9 Q Okay. So if M.W. Kellogg was
10 using asbestos materials in violation of New
11 Jersey law, that would be an excluded liability,
12 correct?
13 A Im not an attorney, I dont, I
14 cant.
15 Q I understand that.
16 A I cant say if that specifically
17 would be an exclusion in here.
18 Q If M.W. Kellogg was, in the course
19 of its business, prior to the closing date,
20 engaged in business practices contrary to
21 establish New Jersey law, that would be part of
22 this exclusion, would it not?
23 A Would you rephrase it, just.
24 Q Sure. If M.W. Kellogg, in the
25 course of its business, prior to the closing
48
1 date of this agreement, acted in a manner that
2 was in violation of New Jersey law, that would
3 fall under an excluded liability, would it not?
4 A It would seem to, because its
5 broad, it says any law applicable to the
6 business.
7 Q Now, if we go to Section 3.2 G,
8 another excluded liability is, liability in
9 ownership or use of property involving hazardous
10 materials or waste or any other environmental
11 claim to the context arising prior to the
12 closing date.
13 Am I summarizing that correctly?
14 A Give me a second to read it.
15 Q Sure, take your time.
16 A Okay.
17 Q If M.W. Kellogg, in the course of
18 its business, was using asbestos materials, and
19 asbestos materials were classified as a
20 hazardous material, wouldnt that be an excluded
21 liability?
22 A Say the question again.
23 (The record was read by the
24 reporter.)
25 A I dont know that I can conclude
49
1 that. Again, Im going to read this.
2 It may be. Its not clear to me
3 whether it would be or not but it may be.
4 Q Okay. And then going to 3.2 J.
5 A Okay.
6 Q Okay. An excluded liability is
7 identified as any liability under or relating to
8 a closed contract or job, is that correct?
9 A Except as provided in an earlier
10 section.
11 Q 3.1 A2.
12 A Yeah.
13 Q Okay. And if we go there, an
14 assumption of liability under that section, and
15 thats Bates 066.
16 A Yes.
17 Q Okay. Subsection 2 is, all
18 liabilities of seller to the extent that
19 provision is there for is made or which are
20 otherwise reflected in the closing date balance
21 sheet.
22 A Right.
23 Q Okay. Have you seen any documents
24 that state that work performed at the Exxon
25 Bayway facility was included in Subsection 3.1
50
1 A2?
2 A I havent been able — I have no
3 documentation either way that I would ever be
4 able to review to verify that such liabilities,
5 or rules may have been made or not made.
6 Q Have you ever seen the closing
7 date balance sheet?
8 A No.
9 Q The work that was performed at
10 issue in this case was in the 1950s, okay. Do
11 you have any reason to believe that that work
12 would have been reflected on the closing date
13 balance sheet?
14 A Having not reviewed the balance
15 sheets, I couldnt say one way or the other.
16 Q Okay. Are the balance sheets in
17 existence?
18 A I have not come across any balance
19 sheets.
20 Q So, you dont know if that job at
21 Exxon Bayway in the 1950s is reflected in the
22 closing date balance sheet which would trigger
23 this provision?
24 A I wouldnt be able to say one way
25 or the other.
51
1 Q All right. Were going to take a
2 quick break here, sir. We need to change the
3 tape.
4 THE VIDEOGRAPHER: Off the
5 record at 11:24.
6 (Brief pause.)
7 THE VIDEOGRAPHER: On the
8 record at 11:25.
9 Q All right. Sorry, sir. So weve
10 identified at least three provisions in this
11 Agreement of Sale between Dresser and Kellogg
12 and others that could be considered excluded
13 liabilities, correct?
14 A Under the form of the agreement,
15 sure.
16 Q Okay. And if theyre excluded
17 liabilities that means that those liabilities
18 wouldnt transfer to Dresser, is that correct?
19 A As the documents written, yes.
20 Q Is that correct?
21 A Thats correct. Yes.
22 Q Okay. So then those liabilities
23 stayed with M.W. Kellogg, Henley, Newco One,
24 Newco Two, is that correct?
25 A As defined in the contract, those
52
1 would have stayed with those entities, yes.
2 Q Okay. And then eventually, those
3 entities became what weve discussed before,
4 Resco Holdings, is that correct?
5 A Thats correct.
6 Q Okay. And when I say those
7 entities, I mean M.W. Kellogg, Henley, Newco
8 One, Newco Two.
9 A Yeah, what was M.W. Kellogg after
10 the sale, after the sale was consummated, was,
11 is the surviving entity or the successor is
12 Resco holdings, Inc. — Resco Holdings, LLC.
13 Q Okay. So, then, based on what
14 weve just discussed, its your understanding
15 that there could be liability on behalf of Resco
16 Holdings, LLC for M.W. Kellogg, is that correct?
17 MR. HORENSTEIN: Object to
18 form.
19 A There, again, excluded liabilities
20 under this agreement would have remained with
21 M.W. Kellogg which is today Resco Holdings, LLC.
22 MR. KUZMIN: Were actually
23 done with that, so, John, if its
24 okay with you, Im just going to
25 pull out pertinent sections rather
53
1 than marking the entire purchase
2 agreement as a — unless you want
3 the whole, I mean, if you feel more
4 comfortable, Im just going to — I
5 was just going to pull out the
6 sections that weve discussed.
7 MR. HORENSTEIN: Fine.
8 Q All right, so Ill pull out what
9 weve got, show it to, to John when we get done
10 and then well attach that.
11 (Agreement of Sale was
12 marked as Deposition Exhibit No. 8
13 for identification, as of this
14 date.)
15 Q Sir, are you aware of a letter
16 dated — are you aware of a letter from 1990
17 from a Mark Underberg, explaining the
18 transactions between Henley and Dresser?
19 A Specifically, no. I may have seen
20 that, but I cant — I dont have a specific
21 recollection.
22 Q Okay. Wasnt that document shown
23 to you in the Turner case?
24 A It may have been.
25 Q Okay. Do you know who Mark
54
1 Underberg is?
2 A No.
3 Q Are you aware of the existence of
4 a document prepared by Mr. Underberg dated
5 June 13th, from Mr. Underberg, General Counsel
6 of Henley Group, to a Mr. Giles, General Counsel
7 of M.W. Kellogg?
8 A I have a vague recollection of
9 having seen a document like that in that matter.
10 Q Okay. In the course of your review
11 of the materials for this matter today, did you
12 see that letter?
13 A No.
14 Q Okay. When I asked you before
15 whether or not there was anything that you
16 thought was missing, that you thought would be
17 pertinent, would that have been something now
18 that you think was probably pertinent?
19 MR. HORENSTEIN: Object to
20 form.
21 A To be honest, I do not have a
22 specific recollection of what was in that
23 document.
24 Q Okay. But you agree with me that
25 there is such a document in existence?
55
1 A I do remember seeing a document
2 like that in the other matter, yes.
3 MR. KUZMIN: So Im going,
4 to ask for production of that
5 document. Its a letter dated
6 June 13th, 1990 from a Mark
7 Underberg, Managing Director and
8 General Counsel of Henley Group, to
9 a Mr. Giles, General Counsel of M.W.
10 Kellogg.
11 MR. HORENSTEIN: Well take
12 it under advisement.
13 Q Sir, are you aware of a company by
14 the name of California Coastal?
15 A Vaguely, um-hum.
16 Q Okay. And Im sorry, yeah,
17 California Coastal Communities?
18 A Yes.
19 Q Okay. And do you know what that
20 company is or what that company does?
21 A Just in general, real estate.
22 Q California Coastal was at one time
23 part of the whole Resco Kellogg subsidiary
24 group, was it not?
25 MR. HORENSTEIN: Object to
56
1 form.
2 A I dont recall specifically what
3 its genesis is.
4 Q Okay. Do you know whether or not
5 California Coastal used to be sued as a
6 successor to M.W. Kellogg?
7 A I believe theres such litigation
8 out there.
9 Q They were, okay.
10 And do you know whether or not
11 California Coastal was sued by Dresser with
12 regards to the indemnification provision of the
13 1988 Purchase Agreement?
14 A I think theres matters like that
15 out there as well.
16 Q And do you know whether or not
17 Resco Holdings was sued by Dresser with regards
18 to indemnification for the 1988 Purchase
19 Agreement?
20 A Again, I think there might be a
21 litigation like that out there, yes.
22 Q And that matter — one of those
23 matters was resolved in 2005, was it not?
24 A I dont have specific knowledge of
25 the resolution.
57
1 Q Okay. Let me show you that. The
2 pertinent part is going to be at the end pages,
3 19 and 20, the last two pages. And I also make
4 the representation that this isnt the full
5 document, the full form 10-K, which is available
6 and I think it was something like 75 pages, so,
7 in my attempt to save trees.
8 A Youre to be commended.
9 Q Okay. Youve had an opportunity
10 to the review this document, sir?
11 A I have.
12 Q And I represent to you that this
13 is a Form 10-K that was filed with the United
14 States Securities and Exchange Commission dated
15 for the fiscal year December 31st, 2005.
16 Im going to direct your attention
17 to page 19 at the bottom. And it says, On
18 April 6, 2005, we in Resco Holdings, Inc., a
19 former affiliate, settled litigation with
20 Dresser Industries and we paid 1.33 million as
21 our share of the settlement which was the amount
22 of our litigation accrual at December 31st,
23 2004.
24 And if we go down to the next
25 paragraph, probably about three quarters of the
58
1 way down, Dressers indemnity claims related to
2 several hundred lawsuits, encompassing
3 approximately 5900 contested asbestos claims
4 made by third parties in connection with work in
5 facilities in which the Dresser required
6 engineering and construction business was
7 allegedly connected.
8 Did I read that correctly?
9 A You did.
10 Q Okay. California Coastal paid 1.3
11 million — 1.33 million. What did Resco pay as
12 part of the settlement?
13 A I dont really recall.
14 Q Okay. But your position within
15 Resco is that of Assistant Treasurer, is that
16 correct?
17 A Yes.
18 Q And in 2000 — as of April 6,
19 2005, you were in that position as Assistant
20 Treasurer of Resco, were you not?
21 A Yes.
22 Q Okay. Would that be information
23 that you would have knowledge of in your
24 position as Assistant Treasurer?
25 A Not necessarily.
59
1 Q Okay, who would have that
2 information, sir?
3 A That very well — it could
4 possibly be managed through our corporate
5 offices as Waste Management.
6 Q Who would have that information
7 with regards — in the Resco group, who would
8 have the information with regards to what Resco
9 paid as part of the settlement?
10 MR. HORENSTEIN: Object to
11 the form.
12 A Within the Resco group. Likely
13 somebody like Greg Robertson, who I referred to
14 earlier.
15 Q And hes the treasurer, is that
16 correct?
17 A Yeah.
18 Q And is it your understanding
19 that — well, strike that.
20 So Resco has in the past assumed
21 liability for work performed by M.W. Kellogg, is
22 that correct?
23 MR. HORENSTEIN: Object to
24 form.
25 A Thats not what this document
60
1 says. I think you omitted a paragraph that
2 states, Neither we nor Resco admitted any fault
3 or liability with respect to Dressers claims,
4 and while we believe we have numerous defenses
5 to Dressers claims, we decided to settle the
6 matter in order to avoid a continued and
7 uncertainty of litigation. So, I.
8 Q Okay, let me re –
9 MR. HORENSTEIN: Youve
10 finished your answer?
11 MR. KUZMIN: Im sorry. I
12 apologize.
13 Q The lawsuit thats referenced in
14 this 10-K relates to indemnification by Dresser,
15 is that correct?
16 A It appears to, yes.
17 Q Okay, and Resco and California
18 Coastal settled with Dresser on that claim of
19 indemnification, correct?
20 A It appears to, thats true.
21 Q And California Coastal and Resco
22 ended up paying at least 1.33 million. We dont
23 know what Rescos share was to Dresser?
24 A California paid 1.33 million,
25 right.
61
1 Q Resco, we dont know what their
2 share was — Im sorry, you dont know what
3 their –
4 MR. HORENSTEIN: Please, let
5 him answer, you cut him off again.
6 MR. KUZMIN: Im sorry.
7 A I dont know that Resco paid
8 anything.
9 Q But the person to find that out
10 from would be Greg Robertson, you think?
11 A He should know.
12 MR. HORENSTEIN: The terms
13 of that settlement are subject to a
14 confidentiality order, so Im going
15 to note that on the record.
16 MR. KUZMIN: Thats fine and
17 we can take that up with the judge,
18 because if part of it was disclosed,
19 it cant be all that confidential.
20 But we can address that with the
21 judge if we need to.
22 MR. HORENSTEIN: Right.
23 Q Sir, youd previously given
24 testimony, as we learned before, in 2003 for the
25 Bonnie Flanders matter?
62
1 A Correct.
2 Q And also the Dorothy Turner
3 matter?
4 A Yes.
5 Q Did Resco settle with the
6 plaintiffs in Turner?
7 A Im not aware of any settlement.
8 Q Okay. Do you know if the
9 plaintiffs — if Resco settled with the
10 plaintiffs in Flanders?
11 A Again, Im not specifically aware.
12 Q Okay. Do you know who within the
13 Resco Group would have knowledge of whether or
14 not a settlement was reached?
15 A Again, I believe I can probably
16 find that out, I just dont have the specific
17 knowledge today.
18 Q Okay. And who would you find that
19 out from?
20 A I would confer with counsel.
21 Q Okay. All right, sir, now, one of
22 the sections that we referenced in the Purchase
23 Agreement thats been marked as P-8, makes
24 reference to closed contracts or jobs.
25 A Yes.
63
1 Q Are you aware of any of the facts
2 of the Grau case that youre here for today?
3 A Not specifically, no.
4 Q Okay. Are you aware that the work
5 that was alleged to have been performed at Exxon
6 took place in 56 or 57?
7 A I am aware of that.
8 Q Okay. So, that would basically
9 make it a closed contract or job, correct?
10 A It probably is.
11 Q And, again, that could trigger
12 another portion of the excluded liability
13 section of the purchase agreement, could it not?
14 A If its deemed a closed contract,
15 sure.
16 Q And as the person being produced
17 here as a corporate representative of Resco, is
18 it your opinion that job, therefore, would be a
19 closed contract or job?
20 MR. HORENSTEIN: Object to
21 form.
22 A I dont have any documentation to
23 support that conclusion one way or the other.
24 Q And you dont know if any of those
25 documents are still in existence?
64
1 A Based on our research, what we
2 have in our possession weve made available.
3 Q Now, sir, eventually, Resco
4 Holdings changed its name most recently, I
5 guess, to Resco Holdings, LLC, is that correct?
6 A I believe thats correct, yes.
7 Q Okay. Let me show you that. And
8 that document there that Ive just shown you
9 which will eventually be marked P-10. The
10 designation there of Resco Holdings, LLC is what
11 it currently is today?
12 A Thats correct.
13 Q Okay. There hasnt been any other
14 name changes, conversions, anything like that.
15 What that document — thats the most recent
16 document pertaining to, I guess the name of the
17 entity Resco Holdings, LLC?
18 A Thats correct.
19 Q Okay.
20 (Documents were marked as
21 Deposition Exhibit No. 9 and 10 for
22 identification, as of this date.)
23 MR. HORENSTEIN: Thats the
24 same document?
25 MR. KUZMIN: Yeah.
65
1 Q Sir, have you ever seen this
2 document before?
3 A No, I dont think so.
4 Q Okay. Represent to you that this
5 is an Annual Franchise Tax Report from tax year
6 2002.
7 In your capacity as the Assistant
8 Treasurer, would this be something that you
9 would see in the course of your position with
10 Resco Holdings?
11 A Not necessarily.
12 Q Okay. I just want to direct your
13 attention to individuals identified at the
14 bottom of this document. Youve identified for
15 me David Steiner and if I recall correctly hes
16 the CEO of Waste Management?
17 A Yes, he is.
18 Q Okay. And the President of Resco,
19 did you say that — Im sorry. Okay, let me ask
20 you this. Does he hold, other than CEO of Waste
21 Management, does he hold a position within Resco
22 currently?
23 A I dont think currently he does.
24 I think at this time he did.
25 Q And what was the last position he
66
1 had within Resco?
2 A He was a director.
3 Q Next person is Francis Sewel. Do
4 you know that who Francis Sewel was?
5 A I dont know her directly. I
6 think she was a corporate secretary at the time,
7 corporate secretary for Waste Management but an
8 officer for Resco Holdings.
9 Q Do you know if Ms. Sewel is still
10 employed by Waste Management?
11 A I dont believe so.
12 Q Do you know whether or not shes
13 still a director of Resco Holdings?
14 A I dont believe so.
15 Q How about Don Carpenter?
16 A He was an officer of Resco
17 Holdings at the time.
18 Q Okay. Do you know in what capacity
19 he was an officer of Resco Holdings?
20 A He was, I think hes vice
21 president of tax for Waste Management.
22 Q And within Resco Holdings was he
23 just a director or did he have another position?
24 A I — at the time, I dont
25 remember. I think today hes a Vice President
67
1 and Assistant Treasurer as well.
2 Q Of Resco?
3 A Yes. So I think hes still an
4 officer, as he was disclosed here. P 11.
5 (Annual Franchise Tax
6 Report, 2002 was marked as
7 Deposition Exhibit No. 11 for
8 identification, as of this date.)
9 Q Sir, do you know whether or not
10 there are any more of the Franchise Tax Reports
11 available from Resco?
12 A I dont have them in my
13 possession. Theyre filed annually so I would
14 think theyre somewhere in the organization.
15 Again, point of clarification just to help you
16 out a little bit.
17 Q Sure.
18 A That is a tax report and
19 Mr. Carpenter is responsible for the
20 corporations tax filings. Hence, why he would
21 have filed that report. It would have been part
22 of his responsibility.
23 Q Okay. And this annual franchise
24 tax report — let me give it back to you –
25 lists the principal place of business outside of
68
1 Delaware as Houston, Texas, is that correct?
2 A It does.
3 Q Okay. And the directors –
4 MR. HORENSTEIN: Can we just
5 read back a question so we can get
6 an accurate answer.
7 A It does, but the principal place
8 of business of Resco Holdings is, as we just
9 said earlier, Four Liberty Lane West, Hampton,
10 New Hampshire.
11 Q And thats where the — sir, are
12 you saying that the information that was
13 submitted here is incorrect?
14 A I would say its incorrect, yes.
15 MR. KUZMIN: Ill make a
16 request for, if in existence, any of
17 the Annual Franchise Tax Reports
18 from 2000 up until the present time.
19 MR. HORENSTEIN: Well take
20 that under advisement. 2000 through
21 when?
22 MR. KUZMIN: Up until, I
23 guess it would be tax year 2008,
24 right.
25 MR. HORENSTEIN: Okay.
69
1 Q All right, sir, the next thing Im
2 going to show you. Okay.
3 All right. Sir, have you ever
4 seen this document before?
5 A I have.
6 Q Okay. Let me see if I can ask
7 this without getting objected to. Did you
8 participate in providing any of the information
9 contained in this document?
10 MR. HORENSTEIN: Object to
11 form.
12 A No, but I reviewed it.
13 MR. HORENSTEIN: And Ill
14 also raise privilege, on the basis
15 of, but go ahead and proceed.
16 MR. KUZMIN: Okay. But if
17 he says no, then, were okay, right.
18 MR. HORENSTEIN: What was
19 your answer?
20 A No, I reviewed it subsequently.
21 Q Okay. Do you know who would have
22 provided the information contained in this
23 document?
24 A The company would have as part of
25 our supportive with our outside counsel.
70
1 Q Okay. And the specific individual
2 that would have provide that information, do you
3 know who that would be?
4 A I dont think we discussed
5 specifically who it is but I believe in
6 reviewing this, this information is, is correct.
7 Q Okay. What I would like to do is
8 direct you to page 6, Interrogatory Number 9,
9 and take your time to read the question and the
10 answer, please.
11 A Okay.
12 Q The question asks for agreements
13 between your company, meaning M.W. Kellogg, and
14 premises owners in regards to the project
15 undertaken at Exxon Corporate Refinery in Bayway
16 from 1942 to 1965 is what I want to focus on.
17 A Okay.
18 Q The answer to that is Resco does
19 not possess the requested information regarding
20 agreements between the M.W. Kellogg Company and
21 premises known as Exxon corporate refinery,
22 Exxon — or, Bayway Refinery, from 1942 to 1965
23 and then it goes on.
24 Did I read that accurately?
25 A You did.
71
1 Q During the course of your
2 preparation for the deposition today, did you
3 come across any additional information
4 pertaining to work that may have been performed
5 by M.W. Kellogg at Exxon Refinery in Bayway
6 between 1942 and 1965?
7 A No.
8 Q And as you sit here today, are you
9 aware of any documents pertaining to any work
10 that may have been undertaken by M.W. Kellogg at
11 Exxon Bayway between 1942 and 1965.
12 A No.
13 Q As you sit here today, do you have
14 any knowledge regarding any work performed by
15 M.W. Kellogg at Exxon Bayway between 1942 and
16 1965?
17 A No.
18 Q As you sit here today, or in the
19 course of your preparation for the deposition
20 today, did you come across anyone who would have
21 information regarding work performed by M.W.
22 Kellogg at Exxon Bayway between 1942 and 1965?
23 A No. You know, going back to some
24 earlier discussions, though, I doubt seriously
25 that in the corporation today that person
72
1 exists.
2 Q Okay. How about documents? Do
3 you know whether or not there would be any
4 documents?
5 A Based on our research for these
6 matters, we havent come across any, so I
7 seriously doubt they are in our possession.
8 Q And you said that you had an
9 opportunity to review the, at least part of the
10 deposition transcripts of Donald Hardy, is that
11 correct?
12 A Excerpts, yes.
13 Q Have you seen any documents that
14 would dispute his testimony concerning the use
15 of asbestos products while he was employed by
16 M.W. Kellogg at Exxon Bayway in the 1950s?
17 MR. HORENSTEIN: Object to
18 form.
19 A I havent come across any
20 documents that would support our dispute or even
21 be able to represent that he was an employee,
22 for that period of time.
23 Q Again, though, just specifically
24 with regards to my question, have you seen any
25 documents or come across any documents to
73
1 dispute his testimony concerning the use of
2 asbestos products while he was working as an
3 insulator for M.W. Kellogg at the Exxon Bayway
4 Refinery?
5 MR. HORENSTEIN: Object to
6 form, hes answered the question.
7 Please, move on.
8 A Yeah, I think — I stand by what I
9 just said. I dont.
10 Q Okay. Again, sir –
11 MR. KUZMIN: I dont think
12 he has, I think hes provided his
13 own answer. I think its a simple
14 yes or no question and thats what
15 Im asking.
16 MR. HORENSTEIN: Hes
17 answered the question.
18 Q Okay. You dont have any doc –
19 you havent seen any documents to dispute Don
20 Hardys testimony, correct?
21 MR. HORENSTEIN: Object to
22 form.
23 A Neither dispute nor support.
24 Q Okay. To your knowledge, theres
25 no one within the Resco Holdings organization
74
1 that can dispute Don Hardys testimony
2 concerning the use of asbestos products by M.W.
3 Kellogg at Exxon Bayway, correct?
4 MR. HORENSTEIN: Objection
5 to form.
6 A Again, I stand by the answer. I
7 dont think a person exists who can support our
8 dispute. I dont think a person exists with
9 that knowledge inside the corporation today.
10 Q And to the best of your knowledge,
11 there are no documents available to supplement
12 the answer provided in Interrogatory Number 9
13 concerning work performed at Exxon Bayway
14 between 42 and 65, correct?
15 A Wed done a research of what
16 documentation we have, weve handed that over as
17 part of this matter. I dont think any other
18 documentation exists in our possession.
19 Q Okay. And sir, finally, going
20 back again to P-11. Youd stated that you
21 believe the information contained in the
22 Franchise Tax Report was incorrect concerning
23 principal place of business, is that correct?
24 A Yes.
25 MR. HORENSTEIN: Its been
75
1 asked and answered.
2 MR. KUZMIN: I understand
3 that.
4 Q My question is, do you know
5 whether or not an amendment was ever filed?
6 A Not to my knowledge.
7 MR. KUZMIN: Sir, I believe
8 that thats all the questions I
9 have.
10 Im going to take a minute
11 to go through my notes. If anyone
12 else has any questions for this
13 witness, now will be the time. No
14 one? John, I dont know if you have
15 any, okay.
16 MR. HORENSTEIN: No
17 questions at this time.
18 MR. KUZMIN: Then let me
19 have two minutes.
20 (Brief pause.)
21 BY MR. KUZMIN:
22 Q Sir, my last question. You have
23 no information as you sit here today as a
24 corporate representative of Resco Holdings,
25 concerning any work that was done by M.W.
76
1 Kellogg at Exxon Bayway, correct?
2 MR. HORENSTEIN: Object to
3 form, asked and answered.
4 A Im sorry, can you read that
5 question back.
6 (Question read by the reporter.)
7 A We provided all the documentation
8 that we have with regard to this matter based on
9 our research of our corporate files.
10 Q Okay. And youve no independent
11 knowledge concerning any work performed by M.W.
12 Kellogg at Exxon Bayway, correct?
13 A Not beyond what weve offered
14 today, no.
15 Q And you dont know the names of
16 anyone who would have any knowledge concerning
17 work performed by M.W. Kellogg at Exxon Bayway,
18 correct?
19 MR. HORENSTEIN: Object to
20 form. Asked and answered.
21 A Again, I think I have answered
22 that before. No, I believe I stated.
23 Q Okay.
24
25
77
1 MR. KUZMIN: Sir, thank you
2 very much for your time, I
3 appreciate it. Thats all I got,
4 thank you.
5 THE VIDEOGRAPHER: This
6 completes the video recorded
7 deposition of David Beavens. The
8 time is approximately 11:58 a.m., we
9 are now off the record.
10 (Answers to Interrogatories
11 was marked as Deposition Exhibit No.
12 12 for identification, as of this
13 date.)
14
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81
1 C E R T I F I C A T E
2 STATE OF NEW YORK )
3 ) ss.
4 COUNTY OF NEW YORK )
5 I, DEBRA DIBENEDETTO, a
6 Shorthand (Stenotype) Reporter and
7 Notary Public of the State of New
8 York, do hereby certify that the
9 foregoing Deposition, of the witness,
10 DAVID BEAVENS, taken at the time and
11 place aforesaid, is a true and correct
12 transcription of my shorthand notes.
13 I further certify that I am
14 neither counsel for nor related to any
15 party to said action, nor in any wise
16 interested in the result or outcome
17 thereof.
18 IN WITNESS WHEREOF, I have
19 hereunto set my hand this 1st day of
20 July, 2009.
21
22 _____________________________
23 DEBRA DIBENEDETTO
24
25
