Caterpillar agrees to pay $46 million in settlement

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Caterpillar Inc. agreed to pay $46 million to settle litigation over a marine engine that caught fire at a Mobile, Ala., shipyard in 2008, the law firm Cunningham Bounds LLC said last week.

A spokeswoman for Caterpillar, a Peoria, Ill.-based maker of construction equipment and engines, confirmed to the Wall Street Journal that the litigation had been settled, but declined to comment on it.

The settlement covers lawsuits filed in Mobile County Circuit Court by Bender Shipbuilding & Repair Co., a now defunct Mobile company that was building the ship when it caught fire, and Seacor Marine LLC, of Houma, La., which had ordered the vessel. It was to be used for such tasks as towing oil rigs.

Bender declared bankruptcy and was liquidated in 2010. Skip Finkbohner, a partner at Cunningham Bounds, which represented Bender and Seacor in the case, said Bender's share of the settlement will go to creditors of that firm. Seacor officials couldn't be reached for comment.

Finkbohner said an engine Caterpillar supplied caught fire because a missing crankshaft part the size of a nickel prevented oil from adequately lubricating part of the engine. The resulting fire burned for nearly 24 hours and destroyed the ship, Finkbohner said. People aboard were safely evacuated.

A jury trial had been scheduled to begin soon, Finkbohner said.