Asbestos Trust Funds
Companies have used asbestos for decades even though health risks have been known. Trust funds are available to compensate patients affected by mesothelioma.
Compensation for Victims of Asbestos Exposure
Many people with asbestos-related diseases receive financial support from asbestos trust funds. These trust funds were organized by bankrupt companies to ensure that there will always be monetary compensation for victims of asbestos exposure. These trust funds support people with all types of asbestos-related diseases, but mesothelioma patients typically collect highest compensation.
What You Need to Know About Asbestos Trusts
Billions Available in Compensation
Victims of asbestos exposure collectively received approximately $3.3 billion in total from asbestos trust funds in 2008. The median trust fund payout for a mesothelioma claim was $180,000.
Thousands Are Getting Financial Support
More and more mesothelioma patients and their families are turning to asbestos trust funds for financial support. Approximately 575,000 claims were paid out in 2008, helping families manage lost wages and treatment costs.
Mesothelioma Patients Are Victims
People who develop mesothelioma are victims of corporate misconduct. Companies using asbestos knew about the dangers of their products but neglected to inform their workers.
Get Access to Trust Fund Money
How Can Trust Funds Help?
- Over $30 billion is available for patients and families.
- Potential for an expedited review of your claim.
- Access financial assistance for treatments, lost wages and family support.
Asbestos has been used in many industries because it is heat and chemical resistant. It is also cheap. For these reasons, asbestos companies concealed the health risks of asbestos from workers. As more and more people were diagnosed with mesothelioma, the number of legal cases concerning asbestos exposure grew, creating a so-called “avalanche of litigation.”
Companies set up trust funds to finance these cases and reach settlements. They filed for bankruptcy protection, but with the stipulation that they could still operate as a functioning company. The size of the trust is determined by a bankruptcy court. There have been billions of dollars set aside in these trusts as compensation for patients and their families.
Anyone who has mesothelioma or has a family member diagnosed with mesothelioma can file a claim to receive compensation. This compensation may cover lost wages, treatment costs, funeral bills, and restitution for pain and suffering.
- As of 2013, there is an estimated $30+ billion set aside in trust funds for mesothelioma patients.
- About 27.5 million people were exposed to asbestos while working.
- Only 2.5 percent of those 27.5 million have filed for compensation.
- From the years 1980-2002 there was a $70 billion dollar payout to victims of asbestos-related illnesses.
The Johns-Manville Corporation
Originally founded in New York City in the mid-19th century, the Johns-Manville Corporation was once a leading manufacturer of insulation and roofing materials. These insulation and roofing materials, unsurprisingly, contained substantial quantities of asbestos. Employees of Johns-Manville started filing for disability for lung diseases as early as 1929, and the corporation was even involved in a violent strike at one of its supplying asbestos mines in Asbestos, Canada.
In the 1980s, the corporation would be one of the first companies to file bankruptcy as a result of asbestos lawsuits. The company subsequently established the first asbestos trust fund in 1987. This created a precedent that led many major manufacturing companies to file for bankruptcy, thus reorganizing their assets and establishing similar asbestos trusts.
Bankruptcy and the Role of Asbestos Trust Funds
Asbestos trust funds are a result of Chapter 11 bankruptcy. Asbestos companies that could no longer afford to pay their debts were forced to set up these trusts by the bankruptcy courts. The purpose of the trusts is to protect victims of asbestos exposure who were filing claims against bankrupt companies.
What is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy 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. Victims of asbestos exposure must file their claims against trust funds if the company responsible for their illness has filed for bankruptcy.
Bankruptcy code doesn’t limit victims from how many trust funds they may file a claim against, nor does it set a limit on how much money the victim may claim. If the victim can prove a work history at several different companies who used asbestos they can legally file a claim against each trust fund responsible.
In fact, many victims file claims against more than one trust and receive payment from each. However, victims may not, in some cases, receive the full amount they claim. This depends on how much funding is available through the trust.
Trust agreements are financial relationships between two parties; in this case, the asbestos companies at fault and their trustees. Trusts are traditionally set up to allow trustees to manage the property of another party. The property being managed by trustees of asbestos trust funds is the money set aside to pay victims of asbestos exposure.
The responsibilities of the trustees include:
- Managing investment of the trust
- Filing tax returns
- Filing annual reports to the bankruptcy courts
- Standing in as the defendant in place of the debtor (the asbestos company at fault) in bankruptcy courts
Filing a Claim Against an Asbestos Trust Fund
Alternative dispute resolution is typically used to reach a settlement between the victim and the trust. This allows both parties to settle a claim out of court, sometimes with the help of a mediator or arbitrator rather than a judge.
If the parties involved cannot reach an agreement on their own, the claim is settled in court. However, this is very rare when filing a claim against an asbestos trust fund.
The claims process, assuming out-of-court settlement, is broken up into a 4-step procedure.
1Filing Claims – Filing begins with determining which companies in the claimant’s (i.e. the victim of asbestos exposure) occupational history are responsible for their illness. During filing, claimants select the method of review as either expedited or individual review.
2Claim Review – There are two separate procedures for reviewing claims.
These reviews settle claims quickly and the payout is a fixed value. This procedure is used when claimants know the fixed value and meet a set of criteria established by the trust, providing medical evidence and occupational history. If the evidence is determined to be sufficient, the claim is valid and the process proceeds to liquidation. If not, claimants can file an individual review.
These reviews are required when claimants do not meet the criteria set up by the trust for an expedited review. Payout values for individual claims may be greater or less than the fixed values established for expedited claims. Good law firms always try to file for individual review to avoid being restrained by fixed values associated with expedited claims. Therefore, claims tend to be much higher.
3Claim Liquidation – Liquidation is the assignment of a monetary value to the claim. Valid claims filed as expedited 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 lawyer.
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 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).
4Claim Payment – After an offer is made and accepted, payment is the final step of the procedure.
Unfortunately, paying out claims is not always a straightforward procedure. Asbestos trusts set up by companies that no longer exist have a limited amount of funds available to claimants.
Predictions of how many workers might develop mesothelioma per any given company are naturally flawed.
Payment percentages are the proportion of the fund entitled to the claimant. This is predominantly set up to avoid huge individual claims from exhausting the fund. Therefore, if a claimant’s claim was hypothetically liquidated at $100,000 with a payment percentage of 25 percent, the trust would pay the claimant $25,000.
Payment percentages can change over time, and are different for each trust. Some trusts have a payment percentage of 100 percent, while others have egregiously low payment percentages of 1 to 2 percent.
Learn how to access these trust funds with our free legal support.
Top Companies With Trust Funds
There are over 50 companies that have set up asbestos trust funds within the past 30 years. The following are the top 6 companies that had the largest trust claim payment ratios in 2011.