Two companies, Honeywell and Avon, have each finished the process of selling off asbestos liabilities and setting up a trust fund for compensating people with certain asbestos-related diseases.
Asbestos is a deadly mineral used during the 20th century for several industries. Companies manufactured products with asbestos to protect construction parts from fires. Electrical wiring, panels, switchboards, roof shingles, floor tiles, attic insulation and more had asbestos to absorb heat as well as protect against fires.
Exposure to asbestos can cause types of cancer like mesothelioma, lung cancer and colon cancer. People who develop these diseases and have known asbestos exposure can receive compensation by filing legal claims against manufacturing companies.
These companies can create asbestos trust funds to avoid being a defendant in lawsuits. Trust funds are bank accounts from which companies pay asbestos exposure claims a predetermined amount, usually less than from a lawsuit verdict or settlement. This is called the Texas Two-Step.
Honeywell Sells to Corporate Liability Acquisition Platform Delticus
Honeywell announced the new asbestos trust fund last week. The company makes products for aerospace, building technologies such as HVAC, performance materials such as specialty chemicals, and safety solutions such as personal protective equipment. Honeywell has been named in mesothelioma lawsuits in the past.
However, the latest sell-off mostly involves liabilities related to a company called Bendix, which made automobile brake linings containing asbestos.
The company moved all Bendix asbestos liabilities and non-Bendix asbestos liabilities to a shell company called Delticus. The company is called a “corporate liability acquisition platform”, which means it is a shell company that absorbs liability assets from another company or companies.
Delticus is buying Honeywell’s Bendix and non-Bendix asbestos liabilities and setting up an asbestos trust fund to compensate people. Honeywell and Delticus contributed a combined $1.68 billion in cash to establish the asbestos trust fund.
Honeywell inherited asbestos liabilities and lawsuits from buying North American Refractories Company (NARCO) and Bendix Friction Materials. People filed asbestos lawsuits against Honeywell from exposure through NARCO and Bendix products. Honeywell sold Bendix in 2014 but kept the liabilities. Honeywell set up a $1 billion asbestos trust fund with NARCO in 2022, which Mesothelioma Guide published a blog about at the time.
Avon Moves Forward With Bankruptcy Trust Fund
Avon was a once-popular beauty brand that manufactured talc products. Talc is a natural mineral, similar to asbestos. Talc and asbestos can mix together, leading to talcum powders containing asbestos fibers and making products dangerous to use.
Avon has faced lawsuits from cancer patients for years. Even as recently as 2024, the company lost a mesothelioma lawsuit verdict of $24.4 million for a former janitor exposed to asbestos from talc powder.
The same year, Avon started the asbestos trust fund process. The company created a subsidiary shell company, which filed for Chapter 11 reorganization bankruptcy.
Avon announced last week the approval of the bankruptcy. This officially establishes the asbestos trust fund and shields Avon from facing lawsuits related to asbestos in talc products.
Talc asbestos exposure has led to tens of thousands of cancer cases. Johnson & Johnson faces approximately 60,000 cancer lawsuits for Johnson & Johnson Baby Powder.
Mesothelioma Guide previously published a blog about Avon’s bankruptcy filing.
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