Asbestos Trust Funds
Written by Retired LCDR Carl Jewett
Fact Checked
Asbestos was widely used in numerous industries, notably the construction and insulation trades, for most of the 20th century. These companies put many people, including their own workers, at risk of mesothelioma. Many of them were the subject of mesothelioma lawsuits and some were forced to create asbestos trust funds, another means of compensation for mesothelioma patients.
Compensation for Victims of Asbestos Exposure
Many people with asbestos-related diseases receive financial support from asbestos trust funds, a type of mesothelioma compensation. Soon-to-be-bankrupt companies organized these funds, per court orders, to ensure that victims of asbestos exposure could receive compensation for the companies’ wrongdoing. Asbestos trust funds support people with all types of asbestos-related diseases.
What You Need to Know About Asbestos Trust Funds
How Are Trust Funds Created?
The bankruptcy courts forced asbestos companies that filed for bankruptcy to set up asbestos trust funds. The purpose of these trusts is to set aside money for future asbestos-related claims. These trusts help protect asbestos-exposure victims, including people diagnosed with mesothelioma, who should be compensated by these bankrupt companies.
Asbestos trust funds are a result of Chapter 11 bankruptcy, which is a form of corporate bankruptcy that allows companies to reorganize their finances in order to continue doing business while also continuing to pay their debt.
Patients diagnosed with asbestos-caused diseases must file their claims against a trust fund if a company responsible for their disease has filed for bankruptcy.
The Johns Manville Corporation
The Johns Manville Corporation became one of the first companies to file for bankruptcy because of asbestos liability. They established the first asbestos trust fund in 1987, which created a precedent for other companies. Since Johns Manville created their trust, many other asbestos companies have had to file for bankruptcy and create their own mesothelioma trust funds.
The Johns Manville trust has paid hundreds of thousands of asbestos claims since it was established in 1987, and it continues to compensate victims.
Johns Manville was once a leading manufacturer of insulation and roofing materials. Their products contained substantial quantities of asbestos. Employees of Johns Manville began filing for disability due to lung diseases as early as 1929. The corporation was even involved in a violent strike at one of its supplying asbestos mines in Asbestos, Canada.
Top Companies With Asbestos Trust Funds
Tens of billions of dollars were set aside for mesothelioma patients in asbestos trust funds.
$41,000
median payout per trust
Company
U.S. Gypsum Company
2006
Owens Corning
2006
Johns Manville
1988
Armstrong World Industries
1988
Babcock and Wilcox Company
2006
Owens Corning/Fibreboard Corp.
2006
Combustion Engineering
2006
Kaiser Aluminum & Chemical Corp.
2006
Eagle-Pitcher Industries
1996
Federal Mogul/Turner & Newall
2007
National Gypsum Company
1993
Initial Funding
$3,957,000,000
$3,423,000,000
$2,500,000,000
$2,062,000,000
$1,845,000,000
$1,556,000,000
$1,243,000,000
$1,218,000,000
$730,000,000
$635,000,000
$446,000,000
Year Created
2006
2006
1988
2006
2006
2006
2006
2006
1996
2007
1993
Filing a Claim Against an Asbestos Trust Fund
The asbestos trust fund claims process is a four-step procedure.
Filing Asbestos Claims
Filing begins with determining which companies in the claimant’s (the asbestos exposure victim’s) occupational history are responsible for their disease. During filing, claimants select the method of review as either expedited or individual.
Claim Review
There are two types of reviews for asbestos trust fund claims and then two additional steps to the trust fund process once a review concludes:
Expedited Reviews — These reviews settle mesothelioma trust funds and asbestos claims quickly and the payout is a fixed value. Claimants use this procedure when they know the fixed value and meet a set of criteria established by the trust, providing medical evidence and occupational history. If the evidence is sufficient, the claim is valid and the process proceeds to liquidation. If not, claimants can file an individual review.
Individual Reviews — These reviews are required when claimants do not fall within the typical criteria set up by the trust for an expedited review. Payout values for individual asbestos claims might vary compared to the fixed values established for expedited claims. The individual review process and the result is usually based on special circumstances of a case, such as a claimant being diagnosed young, having minor children or losing earnings. In these cases, asbestos compensation tends to be higher.
Extraordinary claims — These are special cases where the claim meets the criteria of an expedited claim, but liquidation is allowed to be determined like an individual claim. These asbestos claims are used in cases where the claimant was a victim of one specific company under certain employment circumstances, such as being an employee who worked for the company for a significant amount of time (30 years, for example).
Claim Liquidation
Liquidation is the assignment of a monetary value to the claim. When filed as expedited and valid, asbestos claims already have a monetary value scheduled by the trust. Liquidation for individual claims, on the other hand, is determined by negotiation of the trustee and the claimant’s mesothelioma lawyer.
Claim Payment
After an offer is made and accepted, payment is the final step of the procedure.
Payment Percentages — To prevent an asbestos trust fund from running out of funds, trustees established “payment percentages” for claimants. Some trusts are unable to pay claimants 100 percent of their claim amount. Instead, they will pay claimants a specific percentage of their claim.
Payment percentages are different for each trust. Some trusts have a payment percentage of 100 percent, while others have low payment percentages of 1 to 2 percent. If a claim is hypothetically liquidated at $100,000 with a payment percentage of 25 percent, the trust would pay the claimant $25,000.
These payment percentages also fluctuate. If payment percentages increase, many trusts will pay prior claimants to make up the difference. If a percentage decreases, then prior claimants do not have to pay back the difference. Due to this structure, there is no benefit to waiting to file a trust fund claim. Claimants should start the process as soon as possible without worrying about the percentages dropping and them having to return their compensation.
Mesothelioma Compensation
Asbestos has been used in many industries because it is heat-resistant and inexpensive. However, asbestos has many health risks, which many asbestos manufacturing companies hid from their employees and the general public for years. As mesothelioma incidence increased, the number of legal cases concerning asbestos exposure grew. More people deserved compensation for their mesothelioma.
Asbestos compensation can be used to cover lost wages, treatment costs, funeral bills and restitution for pain and suffering. If you or a loved one has mesothelioma and knows of asbestos exposure incidents, you can access these trusts. Learn how to begin the asbestos trust fund claims process with free legal support from Mesothelioma Guide’s experts.
Last Edited: June 23, 2020.
