According to the St. Thomas Source news outlet, Hess Corporation has settled St. Croix asbestos lawsuits and will create an asbestos trust fund for pending and future legal claims. The trust fund is for former oil refinery workers and their families who were impacted by asbestos diseases such as mesothelioma.
The settlement amount to conclude pending lawsuits and fund the trust is approximately $150 million. The St. Croix refinery refers to an oil refinery on the St. Croix island that is part of the U.S. Virgin Islands. Hess Corp. operated the oil refinery from 1965-1998.
What Are Asbestos Trust Funds?
Asbestos trust funds, also called mesothelioma trust funds or bankruptcy trust funds, are bank accounts created and funded by bankrupt asbestos companies to compensate people who have been affected by asbestos diseases such as mesothelioma. The companies that manufactured, sold, or used asbestos during the 20th century faced a substantial uptick in lawsuits toward the end of the century as the number of mesothelioma cases and other asbestos diseases rose in the United States.
As a tactic to avoid asbestos lawsuits, the companies that were involved in manufacturing this dangerous mineral filed for Chapter 11 bankruptcy. This controversial maneuver is called the “Texas Two-Step.”
Chapter 11 bankruptcy is a “reorganization bankruptcy,” and companies use it to split themselves into two entities. One entity is for assets, and the other is for debt and liabilities. The company with liabilities, such as lawsuits, files for bankruptcy.
The entities that go bankrupt are required to create trust funds to compensate people who have been affected by their harmful actions. If not for these trust funds, future potential claimants would not be able to receive any compensation from the responsible companies since bankrupt entities cannot be sued.
Johnson & Johnson, a health and beauty conglomerate popular for its baby powders and other products, is the most famous example of the “Texas Two-Step” and trying to avoid facing lawsuits. Johnson & Johnson is attempting to settle pending lawsuits and avoid future lawsuits related to the company’s talc Baby Powder. Talc is a naturally occurring mineral that can be contaminated with asbestos, and using the Baby Powder can cause asbestos exposure.
The company has created a subsidiary entity and tried to file for bankruptcy twice to create a trust fund, but both attempts were rejected.
How Asbestos Exposure Occurred in Refineries
Asbestos is a naturally occurring mineral often used during the 20th century in refineries and other worksites. The substance was used to construct the refinery itself, insulate machinery and absorb heat in high-temperature settings.
However, asbestos is dangerous, and any amount of exposure to it can lead to mesothelioma, lung cancer and ovarian cancer. Although it is durable, asbestos can easily break apart, and loose asbestos fibers can be unknowingly inhaled or swallowed. The fibers are sharp and can get stuck in cell linings, which leads to cancer.
Occupational asbestos exposure, which is asbestos exposure that occurs on the job, is the most common type of exposure.
How Much Money Will Be in the St. Croix Trust Fund?
The St. Thomas Source news report states that under the settlement agreement, which was reached in Texas bankruptcy court, Hess Corp. will pay $105 million into the St. Croix trust fund for 910 current claims.
Hess Corp. must also fund $45 million for any future claims:
- $25 million now
- $20 million more in five years (could increase to $37 million)
Of the $45 million for future claims, approximately $11.5 million will be reserved for mesothelioma claims.
When Did St. Croix Oil Refinery Lawsuits Begin?
Hess Corp., now called HONX, filed for Chapter 11 bankruptcy protection in April 2022. The basis for the bankruptcy filing, according to the St. Thomas Source report, is the company would need 40 years to litigate the 910 current claims in the U.S. Virgin Islands District Court.
According to the St. Thomas Source article, the first 400 cases were filed in 1997 and 1998. From 2013-2014, another 120 people filed lawsuits against Hess Corp. The claimants are usually former employees of the oil refinery, family members of former employees who died of asbestos diseases, family members who had secondhand asbestos exposure from workers bringing the mineral into the home, or nearby residents of the refinery.
The report states the Official Committee of Unsecured Creditors attempted to have the bankruptcy filing rejected. The organization alleged that HONX is a shell company used to protect the majority of Hess Corp.’s $37 billion in assets from the asbestos lawsuits. A bankruptcy judge in Houston, Texas, denied the request last December, all but confirming the trust’s creation.
If you or a family member ever worked at the St. Croix oil refinery in the U.S. Virgin Islands and developed mesothelioma – or if you or a loved one worked at another oil refinery and now have mesothelioma cancer, you can receive compensation for asbestos exposure. Email our patient advocate, Carl Jewett, at email@example.com to learn more.
Sources & Author
- Hess Corp. Settles St. Croix Asbestos Lawsuit for $150 Million. The St. Thomas Source. Retrieved from: https://stthomassource.com/content/2023/12/21/hess-corp-settles-st-croix-asbestos-lawsuit-for-150-million/. Accessed: 12/26/2023.
Sources & Author