PROJECT EXPERIENCE. Mass Tort and Environmental Claims and Litigation.

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1 Stephen E. Sellick Managing Director Stephen E. Sellick Managing Director Gnarus Advisors LLC 4350 North Fairfax Drive, Suite 830 Arlington, VA Tel Fax Education and Professional M.A. Public Policy Studies, University of Chicago, B.S., Economics, Wharton School, University of Pennsylvania, Previous Employment LECG, LLC PA Consulting Group Putnam, Hayes & Bartlett SUMMARY Mr. Sellick is an experienced consultant specializing in the management of complex quantitative analysis in litigation matters, particularly projects in environmental, mass tort, and product liability claims. Mr. Sellick has evaluated such claims in the context of insurance allocation, internal management, cost allocation, cost recovery, and litigation risk analysis. He has also participated in studies involving regulatory economics, cost accounting, and financial analysis of the electric utility industry. Mr. Sellick has completed assignments for clients in the insurance, consumer manufacturing, electronics, aerospace, natural gas, pharmaceuticals, electric utility, and agricultural products industries. PROJECT EXPERIENCE Mass Tort and Environmental Claims and Litigation Mr. Sellick has been involved with environmental and mass tort insurance claims cases for over 15 years. Issues examined include environmental remediation, asbestos, silica, beryllium, welding rods, latex gloves, silicone breast implants, gadolinium, and lead. His participation includes assistance with settlement negotiations, expert testimony, detailed cost projections, development of insurance allocation models, and assistance with placing new insurance coverage. He has been engaged by clients having, collectively, millions of asbestos, silica, and mixed dust claims and over 1,000 environmental sites; he has been directly involved in the cost estimation and/or insurance allocation of over $750 million in asbestos, silica, and mixed dust and environmental settlements between numerous insurers and policyholders. Sample engagements include: Providing settlement assistance to a Fortune 50 diversified manufacturing company regarding asbestos product liability and environmental insurance coverage. Assignments include developing projections of future asbestos claims and costs; estimating future costs of environmental remediation sites; and development of various insurance allocation models for

2 Stephen E. Sellick, Page 2 asbestos and environmental claims. Modeling potential future asbestos liability of various asbestos defendants on behalf of an insurance company offering insurance coverage that protects against risk of loss from future asbestos claims and provides coverage for the costs of defending against those claims. Provided settlement assistance on behalf of an integrated mining, smelting and refining company regarding personal injury claims arising from alleged exposure to lead contamination at three US sites. Assignments include estimating ranges of possible losses based on an analysis of national verdict and settlement values. Provided expert disclosure and analysis on behalf of integrated mining, smelting and refining company regarding property damage claims arising from alleged lead contamination. Reviewed and provided rebuttal expert disclosure and analysis regarding plaintiff s expert. Supporting witnesses testifying regarding environmental remediation costs at several sites with lead and other contamination. Assignments include developing remediation cost estimates and related probabilistic analyses, drafting testimony and supervising quantitative modeling of response cost estimates. Conducted a review of an insurer s asbestos claims databases and claims handling procedures, including replication and recommended modification of the process by which surrogate dates of first exposure are assigned to asbestos plaintiffs for which that information has not been collected. Developed sample based methodologies to review client asbestos claims databases and insurance allocation models to allocate claims to historic insurance policies for purposes of insurance coverage litigation on behalf of numerous policyholders, including several policyholders pursuing 524(g) bankruptcy. Settlement assistance for several insurance companies by evaluating the amount and allocation of historic and future

3 Stephen E. Sellick, Page 3 remediation and defense costs regarding environmental claims brought by a number of different industrial manufacturing policyholders. Developed an insurance allocation model to determine the exposure of multiple insurance carriers to a manufacturer s asbestos claims. Mr. Sellick testified before a New Jersey state court regarding appropriate methodology for handling asbestos product liability claims for which exposure dates are not known and for allocating costs to triggered years and policies. This analysis involved a detailed review of client claims databases and claims handling methodologies as well as a stratified sample of claims files and statistical analyses to determine exposure profiles for claims for which dates of exposure are unknown. Conducted an analysis of silicone breast implant claims. In this assignment, for an insurance arbitration before a London based arbitration panel, Mr. Sellick reviewed client claims databases and claims handling procedures, sampled claims files, and performed statistical analyses of claims data to determine whether indemnity payments varied by implant type in order to understand insurance occurrence definition. Worked with a national coalition of companies to develop cost estimates for several asbestos litigation reform proposals. This effort included modeling U.S. total asbestos disease incidence and liability projections under various legal, medical, and legislative scenarios. Developed model to estimate potential legal fees and settlement/verdict liability associated with surgical device in the context of due diligence evaluation of medical device company. Working with a number of companies to develop detailed probabilistic or other appropriate models to evaluate their potential future asbestos and silica liability for purposes of obtaining insurance and/or other financial products to aid in managing that liability, for due diligence in financial transactions, and to assist in financial disclosures. Employed probabilistic litigation risk analysis to quantify the

4 Stephen E. Sellick, Page 4 potential liability associated with latex allergy tort claims to assist in client strategic decision making and in settlement discussions for insurance recovery. Provided written testimony and informative exhibits before a California insurance arbitration panel regarding asbestos claims database, claims handling procedures, and trends in client asbestos defense and indemnity payments of behalf of an industrial manufacturing client. Mr. Sellick also testified regarding the exposure of an insurance carrier to the client s past and future asbestos claims under various alternative scenarios. Provided settlement assistance for a Fortune 50 diversified manufacturing client in a bankruptcy proceeding. Mr. Sellick reviewed the likely future remediation related costs at a closed manufacturing site, resulting in a successful settlement of the client s claim against a company in liquidation. General Litigation/Litigation Risk Analysis Mr. Sellick has employed probabilistic techniques for litigation risk analysis as stand alone assignments and in the context of other litigation related matters. These assignments present an analytical framework to value, analyze, and better understand litigation issues confronting a client. Illustrative assignments include: Employed probabilistic modeling to quantify potential liability and potential insurance associated with allegedly defective medical device on behalf of medical device manufacturer; analysis included estimate of potential legal and settlement costs; review of settlement strategy; and modeling of potential insurance recovery associated with various settlement strategies. Employed probabilistic litigation risk analysis to advise a paper industry client on litigation, remediation, and settlement strategy regarding a significant environmental claim including natural resource damages. Assisted counsel in developing a quantitative model to value

5 Stephen E. Sellick, Page 5 the direct and ancillary costs associated with a major product recall in the agricultural products industry for the purpose of incorporating the liability valuation into an acquisition bid. Assisted in developing probabilistic litigation risk models to enhance the client s ability to think strategically about a highprofile residential mercury contamination matter and to quantify the costs of resolving consequential litigation. Other Environmental Reviewed and critiqued USEPA remediation and oversight costs at a Region III hazardous waste site for a manufacturing client defending a USEPA cost recovery claim. Client reached a successful settlement with USEPA for incurred costs. Provided litigation and settlement analyses in cost allocation to a metals industry client pursuing CERCLA cost recovery against several hundred parties at a major remediation site in Pennsylvania. Mr. Sellick contributed to testimony and developed databases and models to allocate costs to parties in the case. Assisted in the preparation of expert testimony regarding the future cost of the companyʹs compliance with regulations regarding the use and disposal of PCBs. His responsibilities included developing a model of the companyʹs PCB related activities and reviewing PCB regulations to determine their impact on the companyʹs ongoing activities. Other Mr. Sellick has participated in US Postal Service rate making proceedings on behalf of United Parcel Service, including testimony before the Postal Rate Commission in R97 1 and R Mr. Sellick developed complex computer models to replicate and modify Postal Service cost allocation and distribution proposals for mail processing labor costs. In R2000 1, Mr. Sellick also provided testimony regarding a Postal Service proposal to modify the method by which Parcel Post mail volumes are estimated.

6 Stephen E. Sellick, Page 6 Mr. Sellick quantified the level of economic subsidies provided to publicly owned electric utilities for an industry association and prepared briefings and reports presenting these findings. Mr. Sellick participated as a review panel member for the Bioremediation and its Societal Implications and Concerns research program at the US Department of Energy s Office of Science in February Mr. Sellick assisted in writing 1:22.5 of Environmental Science Deskbook (James W. Conrad, Jr. Editor, West Publishing, June 2009).