FOR IMMEDIATE RELEASE
SPACEHAB RECEIVES RESPONSE FROM NASA REGARDING CLAIM FOR LOSSES ON SPACE SHUTTLE MISSION
Houston, Texas, October 6, 2004 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today 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.About SPACEHAB,
Incorporated
SPACEHAB, Incorporated (www.spacehab.com)
is a leading provider of commercial and government space services with three
primary business units. The Flight Services business unit develops, owns, and
operates habitat and laboratory modules and cargo carriers aboard NASA's Space
Shuttles for Space Station resupply and research purposes. SPACEHAB's Astrotech
subsidiary provides payload processing support services for both commercial
and government customers at company-owned facilities in Florida and California.
The Company's Government Services business unit supports NASA's Johnson Space
Center providing configuration management, product engineering, and support
services for both the Space Station and Space Shuttle programs. Additionally,
through The Space Store, Space Media provides space merchandise to the public
and space enthusiasts worldwide
(www.thespacestore.com).
For more information, contact:
Kimberly
Campbell |