Following the discovery that the cancer hazards from exposure to asbestos was very well known within the private information and company files of companies that sold raw asbestos fiber, chose it as an ingredient to go into products they sold because of it was low cost, etc., many companies sought to avoid responsibility to the victims and those afflicted with disease by using the legal maneuvers available to them by “reorganizing” with the protection of bankruptcy laws. Rather than allowing the businesses to face up to their asbestos liability and obligations to those who were hurt, companies asked Judges to allow them to set up trust funds, usually using insurance policies they had bought, to compensate injury victims while reorganizing the business to support continued operations. In many instances, the companies did not disclose the extent of their product sales and thus the estimates of victims was grossly underestimated. Theoretically, those asbestos injured victims had an avenue of financial recovery while the business could continue to provide products to the public escaping responsibility to those who were harmed. Practically, the companies no longer have to worry about being responsible and injured victims may be paid pennies on the dollar of the value of their real claim from those trusts.
A report by the RAND Corporation estimates at least $10.9 billion dollars is held in the 26 largest asbestos bankruptcy trusts. These trusts exist solely to compensate victims of asbestos-related injury. Each trust has its own unique policies and procedures. While $10 plus billion dollars my on its face sound like a lot of money, it falls short because the number of people who will ultimately have their health affected by asbestos will number high into the hundreds of millions. Most victims end up with pennies on the dollar of the true value of their claim. For instance, the trust set up by the John Manville company pays less than 5 cents on the dollar. Thus for a trust claim against Johns Manville valued into the hundreds of thousands of dollars, victims will be lucky to receive $20,000. This situation has long-term implications for the next generation of victims, but the companies that profited from asbestos and hid the dangers are back to business as usual.
The American Bar Association reports that the rates of mesothelioma diagnosis have reached an all-time high and the numbers are predicted to grow well into the next decade. As the volume of injured people steadily increases, bankruptcy trusts are under increasing pressure to remain solvent to support all those who were injured. Asbestos manufacturers and other asbestos defendants typically steadfastly refuse to cooperate to help injured people get fair and full compensation once they have been set free by U.S. Bankruptcy laws that allow business “reorganization”. If you have an asbestos exposure-related injury, you need a lawyer who understands how to deal with these trusts and the legal system as a whole to obtain compensation you need and deserve.