Asbestos Bankruptcy Trusts Information
The connection between lung disease and asbestos exposure had been reported by the early 1900s. However, the demand for asbestos products continued to rise for decades, peaking in the years during and after World War II. By the early 1970s, when the link between asbestos and cancer was clearly established, the damage was already done. Millions of workers had been exposed to asbestos on the job, and millions more Americans were exposed in their homes, schools and office buildings.
Why asbestos companies went bankrupt
Despite the fact that their own internal studies revealed the dangers of asbestos, asbestos companies chose to hide the evidence from the public. For decades, they continued to ignore the suffering of their employees. In 1971, a Federal court issued the first verdict against an asbestos manufacturer in a product liability case and awarded damages to the worker who filed the complaint. The verdict was upheld on appeal, and in the following years, the courts were flooded with asbestos litigation.
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Instead of acknowledging the devastating effects of asbestos exposure and taking steps to protect their workers, manufacturers chose to defend against the complaints. In boardrooms across the country, growing anger over corporate liability redirected the focus from the tragedy of injured workers to the financial pain of manufacturers.
Under the weight of legal bills and award payments, asbestos companies began to cry for asbestos litigation reform. In 1982, Johns Manville and UNARCO became the first two asbestos companies to file for bankruptcy protection under Chapter 11. Since then, more than 80 companies have filed for bankruptcy to buy time and reorganize their finances in order to pay asbestos liability claims.
The purpose of asbestos bankruptcy trusts
Filing bankruptcy under Chapter 11 does not mean an asbestos company is “broke” or out of business. Chapter 11 bankruptcy does not involve pension funds, employment, or liquidation of assets. For an asbestos company seeking Chapter 11 protection, the bankruptcy filing simply suspends any pending or future lawsuits against the company as the bankruptcy case proceeds.
An asbestos company in Chapter 11 asks the court to approve a reorganization plan that includes a settlement trust funded by cash, insurance, or company stock. Upon court approval, existing claims are transferred to the trust, and future claims will be filed against the trust, rather than the company that declared bankruptcy.
Asbestos bankruptcy trusts are set up under strict rules to ensure that funds are available for future claims. In total, there is over $30 billion available in these trusts to pay victims and families who had been exposed to asbestos. The requirements for a claim vary from one bankruptcy trust to another, and trusts will not always assist claimants in filing their claims.
In addition, filing a claim against a settlement trust is different from filling a lawsuit against a solvent company. For example, you may be eligible to file a claim against a trust even if the statute of limitations has passed for filing a lawsuit. If you believe you have a claim against an asbestos bankruptcy trust, an experienced mesothelioma attorney can help you avoid errors and ensure your claim is properly filed.
Click the following lonk to see a partial list of known companies that have produced asbestos products and filed for bankruptcy protection.