If you’re currently involved in asbestos-related litigation or if you’ve been doing some investigation into the possibilities of filing an asbestos-related lawsuit, you’ve probably come across some information about asbestos trusts.
Perhaps you’re a little confused as to what these trusts are and who might benefit from them. You’re not the only one! The world of asbestos trusts and litigation can be hard to decipher at times, and it’s difficult to know in which direction you should turn if you’re in need of compensation to help pay medical bills and other expenses.
Below we’ve offered some detailed information about asbestos bankruptcy trusts in hopes that you’ll be able to better understand how they work and if seeking money from an established trust is the right direction for you to proceed.
Throughout much of the 20th century, countless workplaces in the United States used products that contained asbestos. For several decades, asbestos-containing products were a common site in steel mills, oil refineries, textile mills, machine shops, railroads, coal mines, auto manufacturers, and in plants that made insulation and other similar materials.
As a result, tens of thousands of individuals were exposed to toxic asbestos on a regular basis…and many of those workers got sick. Some developed a cough and other mild respiratory symptoms while others weren’t as lucky. They were diagnosed with mesothelioma cancer.
As a result of their negligence, these companies were eventually bombarded with hundreds – even thousands – of lawsuits. In many cases, the companies filed for bankruptcy in order to escape these lawsuits.
Bankruptcy reorganization, when successful, protects these companies from such an onslaught of lawsuits but allows them to stay in business. Specifically, Section 524(g) of the U.S. Bankruptcy Code allows the corporations to wiggle their way out of the tort litigation system. However, they must do something else in exchange for this privilege.
The U.S. Bankruptcy code, as the next step, then allows for the creation of so-called “asbestos trusts”, established funds into which these companies must deposit monies in amounts large enough to handle current and future asbestos claims.
Courts must approve the amount that is to be set aside, based on former claims as well as the potential for further litigation against the company. Economists and legal experts are brought in to help with the determination, as well as representatives of former and future claimants.
The first numbers submitted don’t always meet with the court’s approval so sometimes it takes years and years for the trust to finally be established. It’s a process that can be very frustrating for those who are sick with mesothelioma and awaiting compensation for themselves or their family. Nevertheless, once approval is granted by the bankruptcy court for a specified amount, the company must set aside the agreed upon funds, often billions of dollars.
There’s a long list of companies that have filed for bankruptcy due to an overwhelming number of asbestos-related lawsuits filed against them. These companies can be large or small, but all had the same thing in mind when they filed their bankruptcy petition – saving themselves.
The list of the companies that have filed for asbestos lawsuit-related bankruptcy is long but include these well-known names:
Armstrong World Industries
Babcock and Wilcox Co.
H.K. Porter Company
Owens Corning Corporation/Owens Corning FIbreboard
Philadelphia Asbestos Corporation
W.R. Grace and Company
Thus far, there are about 60 U.S. companies with asbestos trusts in place, and other companies – like Garlock Sealing Technologies, General Motors, and Todd Shipyards – are contemplating trusts. Experts hypothesize that more will appear in the next decade.
Once an asbestos trust fund is put into place, it is removed from the hands of the particular company responsible for depositing the funds. The company does not review claims made against the trust nor do they decide who gets the money and who doesn’t.
This often comes as a relief to potential claimants, who might be concerned that prejudice against them will keep them from getting the funds they deserve. They are pleased to know that the executives in the company are not responsible for trust-related monetary decisions.
Instead, the trust is operated by a “trustee”, a government-appointed person or persons who make the decisions for the trust. However, the trustee(s) must follow certain pre-designated procedures to make these determinations so that all decisions are made in a fair and equitable manner.
You or your attorney can locate specific rules and regulations that pertain to the trust from which you seek to obtain funds. Often, trustees set up websites that pertain to their particular trust. This includes information about their rules and regulations as well as the qualifications necessary to apply and to receive funds.
To file an asbestos trust claim, you’ll need much of the same information as you’d need to file any other litigation. Confirmation of diagnosis – You’ll need to show that you’ve been to a doctor or doctors and that you are definitively suffering from an asbestos-related disease. Most likely, there will be forms to be filed by these physicians and/or statements to be signed. The physicians will also need to determine to what extent asbestos exposure contributed to your disease.
Proof of exposure – Plaintiffs filing for compensation from a trust fund will need to establish proof of who was responsible for their exposure. Items such as witness statements and employment records may be needed as well as other similar documentation. It may take some time to assemble this needed paperwork.
Without knowing the specifics of your disease and parameters of the trust from which you seek funds, it’s impossible to predict how much you’ll receive if your application for funds is approved. Various types of asbestos injuries qualify for various levels of compensation. For example, an individual with Stage 4 malignant pleural mesothelioma might be at the top of the pay scale, so to speak.
Though some larger corporations are able to pay 100 percent of a particular claim, it seems that the average is about 25 percent. That means that if you file a claim for $200,000, you’re likely to receive $50,000.
Remember, payments must be limited because the trust fund is set up to address ALL future claims, a number that had to be estimated when the fund was organized. So, it’s likely that the trustee will be conservative when it comes to spending money.
Indeed, some wonder whether or not the trusts established by these negligent companies will be enough to cover all future claims. Of course, there’s no guarantee. Because of mesothelioma’s long latency period, it is likely that more cases will keep appearing for at least the next decade or two before the diagnoses slow. One can only hope that the “guess-timations” made by legal experts and others involved in the procedure will be enough to compensate everyone who makes a claim.
Still, doubts remain. “The dozens of trusts set up by companies forced into bankruptcy by asbestos liabilities are facing such heavy claims that many are paying only a few cents on the dollar,” reports an article in Reuters, written in 2012 by columnist Ben Berkowitz. “Some have had to suspend settlements. That has created inequality among victims.”
The simple answer to this questions is “yes”, but there’s a lot to consider before you do this. Rules about trust claims and the legal process vary from state to state, but mesothelioma victims should know that filing for funds from a trust could affect the outcome of a lawsuit and the amount of compensation received overall.
A mesothelioma lawsuit and a mesothelioma trust claim are certainly two different animals. The former is considered a personal injury claim and can be filed against multiple defendants as, often, there is more than one company or individual responsible for someone’s asbestos exposure. A mesothelioma-related lawsuit can also be filed as a wrongful death claim when the individual in question has already died as a result of exposure.
Some companies will only be able to be held responsible through these established trusts while other companies that are still solvent can be sued in a court of law, so the victim doesn’t necessarily need to choose one or the other.
Some states, including West Virginia, will permit what is known as “setoffs” for payments made from trust funds. For example, if the claimant receives a trust payment and then receives another award through the courts, the responsible defendant(s) may be able to deduct the amount of the trust payment from the award made as a result of a successful lawsuit.
In general, eligibility requirements vary from trust to lawsuit. The amount of paperwork that needs to be filed and the length of time it takes to obtain a settlement can vary as well. And, of course, the amount awarded to the injured can differ also.
With a trust settlement, the plaintiff will definitely get some money though it may not be as much as he/she could potentially receive in a lawsuit-related settlement if one chooses to go after multiple defendants. Often, the decision as to which way to proceed depends all how much time and energy the victim and his family wish to expend in order to receive the compensation they require to address medical bills, loss of income, and other expenses.
Statutes of limitation often enter the picture when determining whether to file both a lawsuit and an asbestos trust claim. In most cases, a lawsuit must be filed within two years from the date of diagnosis of mesothelioma, though there are a few states with a slightly longer statute of limitations. However, if the victim has missed that time window, he or she will mostly likely still be able to claim money from an asbestos trust.
As you interview lawyers for this all-important job, gauge his or her knowledge of both asbestos trusts and asbestos litigation. He should be familiar with which companies offer asbestos bankruptcy trusts, especially those in your immediate area. He should also be well-versed on how to file a claim with a trust and what kind of documentation is needed to do so. This speeds up the process and is essential, especially when the need for compensation is immediate.
Only an experienced asbestos attorney can guide you towards the path that will provide you with the most positive outcome for you and your family members. That’s why it’s imperative to choose the right attorney for your situation. Look for one who is experienced enough to review your scenario and recognize which road is best for you, whether it involves only a trust claim, only a lawsuit, or a combination of the two.