One legal option mesothelioma victims have for seeking compensation is the submission of a claim to an asbestos trust. Whether this option is available will depend on the facts of a person’s case, including what kind of asbestos the person encountered.
Several decades ago, when information about the dangers of asbestos and the wrongful actions of asbestos companies started to pile up, thousands of people began filing lawsuits. Asbestos companies soon struggled to meet their legal liabilities, and in the face of mounting judgments, many companies turned to bankruptcy. Recent estimates indicate that more than 100 asbestos companies have filed for Chapter 11 bankruptcy and reorganization.
Not all of these filings have been granted. But for the companies that were allowed to declare bankruptcy, trust funds were created to continue compensating victims of asbestos exposure. Without these funds, people who developed mesothelioma would have no options for seeking legal recourse. The trusts usually bear the names of the bankrupt or defunct asbestos companies but are run by entirely separate entities and trustees.
Each potential claimant will have to meet specific criteria to be eligible for compensation from a trust fund. Every trust has its own set of criteria, but almost all of them will require proof of the following:
- Exposure to the subject asbestos. This will usually involve some evidence of working at a particular place or encountering/buying a specific product during a specific period of time. If a person cannot present any proof of exposure or the types of asbestos at issue, he or she is unlikely to succeed with a trust claim.
- Duration of exposure. Most trusts will require proof regarding the length of asbestos exposure. Many trusts have set minimums on exposure duration in order to collect from the trust.
- Proof of mesothelioma diagnosis. Exposure is not enough for any asbestos claim. Trust claimants must present proof of mesothelioma diagnosed by a doctor, and many trusts will have certain medical criteria beyond the diagnosis.
Because each trust fund has its own eligibility requirements, it is important for potential claimants to hire knowledgeable mesothelioma and asbestos attorneys to help them understand whether they can submit trust claims. The submission process will involve either sending in paper documentation or uploading documents to an online portal, which will again depend on the individual trust. Claims will always be filed with the trust fund, not against the bankrupt company.
Asbestos trusts pay a set percentage of a case’s total value. Upon review, if a claim meets a trust’s requirement for compensation, the case will be assigned a certain amount of money, usually negotiated between the fund and the claimant’s attorney. This process is known as “liquidating” the claim. The claimant will not receive the full amount assigned to his or her case, however. Rather, he or she will receive a percentage of that award, based on the trust’s set payment schedule.
Many trusts pay about 25 to 30 percent, which means if a claimant’s case is assigned a total value of $150,000, the claimant will actually receive $37,500 to $45,000. The final amount paid will depend on the trust involved, the damages alleged in the claim, and the strength of the evidence presented with the claim submission.
Asbestos trusts were created during the bankruptcy proceedings of asbestos companies. While intended to compensate all future claimants appropriately, the trusts were ultimately funded using estimations of future eligible claimants and the likely total obligation of the company. In litigation of this size, estimations were difficult to calculate. And some of them were not accurate. This means some trusts are underfunded and do not have enough money to reasonably compensate all eligible claimants.
One such underfunded trust is the Johns-Manville Trust. It was created with $2.5 billion to compensate future claimants, but it has more than once ceased making payments and has reduced its payout percentage to just 10 percent.
The fear of insolvency affects not only the trustees, who have a duty to stretch funds as long as possible but also future potential claimants. The long delay between exposure and development of mesothelioma symptoms (sometimes up to 50 years) makes it difficult for anyone to understand exactly how many people still might have future asbestos claims. A finite amount of money in asbestos trusts makes this litigation even more complicated.
Approximately 60 asbestos trusts have been created since companies began filing for bankruptcy in the 1980s. Some of these trusts include:
- ACandS Asbestos Settlement Trust (ACandS, Inc.) – $528 million in initial funding
- Armstrong World Industries Inc. Asbestos Personal Injury Settlement Trust (Armstrong World Industries) – $2.06 billion
- Asarco LLL Asbestos Personal Injury Settlement Trust (Asarco Inc.) – $830 million
- Babcock & Wilcox Asbestos Trust (Babcock & Wilcox Company) – $1.85 billion
- Bondex Trust (Bondex) – $797.5 million
- Celotex Asbestos Settlement Trust (Celotex Corporation/Carey Canada Inc.) – $1.25 billion
- Combustion Engineering 524(g) Asbestos Personal Injury Trust (Combustion Engineering) – $1.24 billion
- DII Industries LLC Asbestos Personal Injury Trust (DII Industries LLC/Dresser Industries) – $2.51 billion
- Eagle-Picher Industries Personal Injury Settlement Trust (Eagle-Picher Industries) – $730 million
- Federal Mogul U.S. Asbestos Personal Injury (Federal Mogul Corp.) – $690 million
- MLC Asbestos Personal Injury Trust (General Motors) – $625 million
- G-I Asbestos Settlement Trust (G-I Holdings) – $770 million
- Manville Personal Injury Settlement Trust (Johns-Manville Corp./Philadelphia Asbestos Corp.) – $2.5 billion
- Kaiser Asbestos Personal Injury Trust (Kaiser Aluminum Corp.) – $1.22 billion
- Western Asbestos Settlement Trust (MacArthur Co./Western Asbestos Company) – $2 billion
- Owens Corning Fibreboard Asbestos Personal Injury Trust – Owens Corning Subfund (Owens Corning) – $3.42 billion
- Owens Corning Fibreboard Asbestos Personal Injury Trust (Owens Corning/Fibreboard Corp.) – $1.56 billion
- Pittsburgh Corning Corporation Asbestos Personal Injury Trust (Pittsburgh Corning) – $3.41 billion
- Quigley Company Inc. Asbestos Personal Injury Trust (Quigley Co.) – $569 million
- H. Agriculture & Nutrition, LLC Asbestos Personal Injury Trust (T.H. Agriculture & Nutrition) – $901 million
- United States Gypsum Asbestos Personal Injury Settlement Trust (United States Gypsum Co./USG Corp.) – $3.96 billion
- WRG Asbestos Personal Injury Trust (W.R. Grace & Co.) – $2.98 billion