Litigating negligent asbestos companies is the oldest and largest mass tort in American civil law history. Diseases caused by asbestos exposure have claimed many thousands of lives and created billions of dollars in compensation settlements.
Countless lawsuits have been filed in United States courts, and an undisclosed number were quietly settled for massive awards without going to trial. That’s not to mention the amount of money asbestos defendants have set into bankruptcy trust funds.
Asbestos Bankruptcy Trust Funds
Asbestos litigation is a specialized field. Many law firms exclusively litigate mesothelioma and other asbestos-related disease cases. This is a complex arena where knowledge of case precedents and previous defendants are part of building a legitimate claim for plaintiffs. In fact, asbestos litigation is so large that American courts and legislators recognized the problem by developing specific laws and procedures to deal with the volume of plaintiffs and defendants.
There is no central repository for listing who’s sued who in asbestos cases. By best estimates, over 6,000 separate defendants have been litigated.
Some defendants were large and highly visible defendants like Johns-Manville, Owens-Corning, United States Gypsum and W.R. Grace. These asbestos-producing giants are still in business after setting aside nearly $15 billion in combined trust account funding.
Most of the 6,000 asbestos defendants went bankrupt and are gone from the map. They simply didn’t have the funds or assets to liquidate and settle suits or create trusts.
There are approximately 100 remaining defendants held responsible for negligently producing and supplying asbestos-containing materials (ACM). These companies survived because they used provisions of the United States Bankruptcy Code (USBC) to protect them.
United States Bankruptcy Code Protection for Asbestos Defendants
The United States Bankruptcy Code isn’t light reading. Many attorneys specialize in bankruptcy cases and know this book inside out. Lawyers helped many asbestos-producing companies defend their lawsuits by using sections in the USBC that apply to financial protection and resolution.
These are the two main USBC sections that litigated asbestos defendants turned to:
- Chapter 7 Liquidation: This chapter applies to defendants without sufficient capital or hard assets to pay lawsuit plaintiffs and creditors. Once a defendant is found responsible for paying compensation but is insolvent, the court orders a special trustee to seize the company’s remaining cash and hard assets. These assets are liquidated and the proceeds disbursed to various plaintiffs. Normally, the company is forced out of business which is what happened to most of the 6,000 bankrupt asbestos defendants.
- Chapter 11 Protection: This USBC chapter is designed to limit legal actions against solvent companies and give them time to restructure while remaining in business. One of the Chapter 11 provisions is section 524(g) that allows for defendants to create independent trust funds to pay present and future plaintiffs who were harmed by their products or through their negligence. Trust funds have a complicated formula. They’re based on what funds are anticipated for the defendant’s long-term settlement amounts. Bankruptcy trust funds are administered by a third-party and remain detached from the defendant company. Once a trust is established, the defendant is protected from all future litigation regarding asbestos claims.
Lawyers who specialize in asbestos litigation are acutely aware of existing bankruptcy trust funds and how to accesses them for clients. There are over $30 billion currently held in American asbestos trusts. This money is available to mesothelioma and other asbestos-illness suffers, provided they meet certain eligibility requirements.
Eligibility for Accessing Bankrupt Defendant Trust Funds
To access compensation money in bankrupt asbestos defendants’ trust funds, a claimant must prove they’re eligible. This burden rests with the individual plaintiff.
Because the asbestos law is so complicated and the available funds are so large, every person considering applying for trust fund compensation must retain a law firm that specializes in mesothelioma and other asbestos-disease cases.
A mesothelioma attorney assesses three criteria to see if a claimant is eligible for trust funding:
- Medical Proof: A claimant must have medical proof that they suffer from a disease caused by asbestos exposure. This is straightforward for mesothelioma patients as asbestos exposure is the sole known cause of this disease. Proof is supported by a recognized medical diagnosis and is supported by physical evidence like biopsy pathology, X-rays and medical testing records.
- Exposure Proof: Trust fund claimants have to show they were exposed to certain ingredients which may have had asbestos-containing materials (ACM) in products at specific sites. This can be a difficult hurdle as mesothelioma has an extremely long latency period. It often doesn’t present symptoms for decades after a claimant had asbestos exposure. Memories fade and records disappear. Experienced mesothelioma attorneys have vast information on what company work sites and products were contributors to the asbestos disease epidemic.
- Negligence Proof: Claimants must also show the defendant was negligent in some way. This is generally demonstrated by an overall pattern where other facts prove a company knew how dangerous their products were. Some well-known defendants failed to warn product users and conspired to hide this information in favor of profits. A law firm specializing in mesothelioma practice knows who these defendants are. Tying a claimant’s history, work location and occupation to a defendant’s responsibility is what these attorneys excel at.
Once an attorney has reasonable grounds to represent a plaintiff, they make a formal application to the defendant’s trust fund and present their case. Negotiating a settlement is another area that a specialized mesothelioma law firm handles.
How much compensation a plaintiff is awarded depending on the trust fund structure and the severity of the claimant’s case. Most asbestos bankruptcy trust funds have a pre-existing value schedule which they use to classify a claim. Generally, trust funds pay a percentage of scheduled values.
Existing Defendants with Bankruptcy Trust Funds
Out of the estimated 6,000 asbestos lawsuit defendants, only a fraction had the financial strength to set aside trust accounts and remain in business. Attorneys who specialize in mesothelioma litigation are well aware of what defendants exist. They also know what funds are currently available to eligible plaintiffs and how to access these trust accounts.
These are the principal defendants who have established asbestos bankruptcy trust funds:
- A&I Corporation
- ABB Lummus Global, Inc.
- A-Best Products Company
- ACands, Inc.
- Asbestos Claims Management Corp.
- A.P. Green Industries, Inc.
- A.P.I. Group, Inc.
- Armstrong World Industries, Inc.
- Artra Group, Inc.
- Asarco Incorporated
- Babcock & Wilcox Company
- Burns and Roe Enterprises, Inc.
- Brauer Supply
- C E Thurston & Sons, Inc.
- The Christy Refractories Company, L.L.C.
- Combustion Engineering, Inc.
- Congoleum Corporation
- Eagle-Picher Industries, Inc.
- E.J. Bartells Company
- Energy Future Holdings Corporation
- Fuller-Austin Insulation Co., Inc.
- Ferodo America, Inc.
- Fibreboard Corporation
- Flexitallic, Inc.
- G-I Holdings, Inc.
- General Motors Corporation
- W.R. Grace & Co.
- Halliburton Energy Services, Inc.
- Harbison-Walker Refractories Company
- H.K. Porter
- Hercules Chemical Company, Inc.
- J.T. Thorpe, Inc.
- J.T. Thorpe Company Trust–Texas
- Kaiser Aluminum & Chemical Corporation
- Keene Corporation
- Leslie Controls, Inc.
- North American Refractories Co.
- Owens Corning
- Philadelphia Asbestos Corp
- Piper Aircraft Corporation
- Plant Insulation Company
- Plibrico Company
- Porter-Hayden Company
- Quigley Company, Inc.
- Raymark Industries, Inc.
- Shook & Fletcher Insulation
- Swan Transportation Company
- T&N, Ltd.
- T H Agriculture & Nutrition, L.L.C.
- Thorpe Insulation Company
- United States Gypsum Company
- United States Mineral Products Company
- Western Macarthur Company
Retaining a Law Firm to Access Defendants’ Bankruptcy Trust Funds
If you’ve been diagnosed with an asbestos-related disease, it’s important to work with a specialized law firm. Mesothelioma attorneys have the experience and the knowledge that’s required to carefully review your work history to identify how your asbestos-related work caused your diagnosis.
Specialized attorneys have the skills and knowledge to help eligible claimants access defendants’ bankruptcy trust funds. For more information on asbestos exposure in work sites, contact our Patient Advocates today.