Honeywell International has joined an agreement with the North American Refractories Asbestos Personal Injury Settlement Trust to settle asbestos claims related to a subsidiary company’s past manufacturing of asbestos-containing products.
Honeywell pledged more than $1 billion to settle current and future claims related to asbestos exposure and diseases, such as mesothelioma and lung cancer. The commitment goes to an asbestos trust fund established when the subsidiary company filed for bankruptcy nearly a decade ago.
Details of Honeywell’s Asbestos Trust Fund Agreement
According to an SEC filing, Honeywell will contribute $1.325 billion – as a lump-sum payment – to the asbestos trust fund initially formed by North American Refractories Company (NARCO). Honeywell’s billion-dollar plus payment will relieve the corporation from any other funding requirements for the asbestos trust fund.
Upon payment and completion of the agreement with NARCO, Honeywell International will have “limited obligations” to the asbestos trust fund, which means the company is not responsible, liable or obligated to manage the trust or any related filings.
In 1979, Honeywell purchased NARCO, an asbestos refractory materials manufacturer. However, the cancer-causing properties of asbestos led to an overwhelming amount of asbestos-related lawsuits for NARCO and Honeywell.
NARCO filed for bankruptcy in 2013 and formed a $6.32 billion asbestos trust fund. Honeywell’s billion-dollar contribution to the asbestos trust fund will be available for any current or future asbestos claims against NARCO.
What Is an Asbestos Trust Fund?
Asbestos trust funds are a form of asbestos compensation and the result of companies filing for bankruptcy to avoid legal liability. These funds ensure victims receive adequate asbestos compensation.
How Did Asbestos Trust Funds Begin?
During the second half of the 20th century – when the public learned that asbestos could cause cancer – companies that profited off of manufacturing, selling, and using asbestos were the subject of a mountain of lawsuits. Many of these companies filed for Chapter 11 bankruptcy to run from the legal liabilities. Chapter 11 bankruptcy is a type of corporate bankruptcy that allows companies to maintain normal business operations, while they organize their finances and pay off their debt.
However, the U.S. court system stepped in and required the newly bankrupt companies to create asbestos trust funds to compensate future victims of asbestos diseases, since exposure to asbestos doesn’t immediately cause any health problems. If the bankrupt company was bought by another entity – like Honeywell bought NARCO – then the parent company is responsible for funding the asbestos trust.
In 1987, the Johns Manville Corporation established the very first asbestos trust fund and set the precedent for other companies to follow. The Johns Manville trust has compensated hundreds of thousands of asbestos victims and continues to do so decades later.
How Are Asbestos Trust Funds Different Than Lawsuits?
Asbestos lawsuits and asbestos trust funds differ in many ways. The main difference is asbestos lawsuits often involve courtrooms, plaintiffs, defendants, juries, deliberations and verdicts. Asbestos trust fund payouts are usually handled privately – between the victim’s lawyer and the at-fault company’s trust fund trustees.
Because asbestos trust funds do not involve courtrooms, juries or verdicts, these types of claims typically move along much faster than asbestos lawsuits. Asbestos trust fund claims often fall under two categories – expedited review or individual review.
If your case meets the criteria of an expedited review, your claim can be settled quickly with a fixed compensation amount. If your case does not fall within the specific criteria set for expedited review, you will file for an individual review. The individual review process can vary as it is based on special circumstances, but
Asbestos lawsuits can be unpredictable, lengthy and stressful. Asbestos trust funds have been established in favor of victims, making compensation more accessible. At-fault companies have set aside large sums of money to guarantee asbestos victims – current and future – will receive fair compensation.
If you or a loved one think you may have been exposed to asbestos, or have been diagnosed with an asbestos disease, contact our Registered Nurse, Karen Ritter. She can help answer any asbestos-related health questions – and even get you connected with an experienced mesothelioma lawyer to see if you are eligible to make an asbestos trust fund claim.
Sources & Author
Honeywell (HON) Inks $1.3B Deal to Settle Asbestos Claims. Yahoo! Finance. Retrieved from: https://finance.yahoo.com/news/honeywell-hon-inks-1-3b-194007059.html?guccounter=1. Accessed: 11/29/22.
Honeywell International Inc. SEC Filing. Retrieved from: https://honeywell.gcs-web.com/node/44816/html. Accessed: 11/29/22.
Sources & Author