Spacehab Receives NASA Response Regarding Claim For Losses On Space Shuttle Mission

SHUTTLE NEWS

File image of Spacehab's Research Double Module.

Houston TX (SPX) Oct 07, 2004
Spacehab Wednesday announced its receipt of NASA's determination regarding the Company's claim for loss of its Research Double Module that was destroyed during the STS-107 space shuttle tragedy. NASA's determination states that its liability is limited to the contractually stipulated $8.0 million contract provision. The Company is pursuing receipt of the $8.0 million plus interest from NASA in this fiscal quarter.

As reported in January 2004, Spacehab's contract with NASA included an indemnification provision providing for any loss of, or damage to, the Company's flight hardware up to $8.0 million. Spacehab filed a formal claim against NASA in the amount of $87.7 million for its loss in the shuttle accident which includes the $8.0 million contractually-stipulated provision.

NASA's notification to Spacehab in response to the claim represents the final decision of NASA. Although Spacehab has agreed to accept the contract indemnification amount of $8.0 million, the Company has the right to file an appeal for the difference between the $8.0 million amount specified by NASA and the amount identified in Spacehab's claim.

The right can be exercised by filing an appeal with either the Armed Services Board of Contract Appeals or the U.S. Court of Federal Claims. Spacehab is evaluating whether it will pursue an appeal. In addition to an appeal, Spacehab has other legal recourse it can pursue. Once an assessment of its options is complete, Spacehab will make a formal announcement of its decision.

Spacehab's insurer for the STS-107 space shuttle mission, Lloyd's of London, paid the full proceeds of a $17.7 million policy to the Company shortly after the accident.

Subsequently, Lloyd's has filed suit against Spacehab seeking recovery of the $17.7 million alleging that:

(i) such proceeds were paid erroneously primarily due to the fact that NASA had not paid indemnification due to the Company prior to the payment of the insurance proceeds,

(ii) the Company and its insurance broker misled Lloyd's in issuing the policy, and

(iii) the Company has not cooperated with Lloyd's in protecting Lloyd's right of subrogation. Spacehab believes that the Lloyd's complaint is without merit, and while cooperating with Lloyd's in protecting their interests, has responded accordingly.

SHUTTLE NEWS

KSC Reopens Tuesday As Space Center Weathers Hurricane Jeanne

KSC (SPX) Sep 28, 2004
Tuesday, Sept. 28 is a normal work day for all KSC employees. A liberal excused absence as well as liberal leave policy will be in effect for civil service and contractor employees with permission from their supervisor. The KSC Child Development Center will be open on Tuesday.

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