This Is The History Of Asbestos Settlement In 10 Milestones
Asbestos Bankruptcy Trusts
Companies who file for bankruptcy typically establish asbestos bankruptcy trusts. They then compensate personal injury claims of those who were exposed to asbestos. At least 56 asbestos bankruptcy trusts have been created since the mid-1970s.
Armstrong World Industries Asbestos Trust
In 1860, when it was first established in Pittsburgh, PA, Armstrong World Industries is the world's largest wine cork manufacturer. It employs over 3000 people and has 26 manufacturing plants all over the world.
During the early years the company employed asbestos in a variety of items such as insulation, tiles and vinyl flooring. In the process, workers were exposed material, which can cause serious health issues, such as mesothelioma and lung cancer and asbestos litigation asbestosis.
The asbestos-containing products of the company were extensively used in residential, commercial as well as the military construction industries. As a result of this exposure many thousands of Armstrong employees were affected by asbestos-related diseases.
Although asbestos is a naturally-occurring mineral, it isn't safe for human consumption. It is also often referred to as a fireproofing material. Companies have established trusts to pay victims for the dangers of asbestos.
A trust was set up to compensate victims of Armstrong World Industries' bankruptcy. The trust has paid out more than 200,000 claims during the first two years. The total amount of compensation was greater than $2 billion.
The trust is managed by Armor TPG Holdings, a private equity firm. In the beginning of 2013, the company owned more than 25 percent of the fund.
According to the asbestos litigation Victims Compensation Trust, the company is estimated to be liable for more than $1 billion in personal injury claims. The trust has more than $2 billion in reserves to pay for claims.
Celotex Asbestos Trust
In the early and mid 1980s, Celotex Corporation, a manufacturer and distributor of building materials, was hit with an avalanche of lawsuits claiming asbestos-related property damage. These claims, as well as others claimed billions of dollars of damages.
Celotex filed for bankruptcy protection in 1990. To settle asbestos-related claims the Asbestos Settlement Trust was created in the reorganization plan of Celotex. The Trust filed a claim at the United States District Court for Middle District of Florida. Saiber L.L.C. represented the Trust.
In the course of the investigation the trust sought to secure coverage under two extra comprehensive general liability insurance policies. One policy offered coverage for five million dollars, and the second policy provided coverage for 6.6 million. Jim Walter Corporation was also asked to provide coverage. However, it could not find proof that the trust was required to give an advance notice to any excess insurers.
Celotex Asbestos Trust submitted proofs of bodily injuries claims on December 31 of 2004. The trust also filed a motion seeking to overturn the special master's ruling.
Celotex had less that $7 million in primary coverage when it filedfor bankruptcy, however, it they believed that asbestos litigation in the future could affect its excess insurance. Celotex had anticipated the need for multiple layers of excess insurance coverage. However, the bankruptcy court found no evidence to establish that Celotex provided adequate notice to its insurance companies that had excess coverage.
The Celotex Asbestos Settlement Trust is a complex process. It is responsible for the settlement of claims against Philip Carey (formerly Canadian Mine) and also providing treatment for asbestos-related illnesses.
It can be difficult to understand. Fortunately, the trust offers a user-friendly tool for managing claims and an interactive web site. There is also a page on the website to address claims-related deficiencies.
Christy Refractories Asbestos Trust
Christy Refractories originally had an insurance pool of $45 million. However, in early 2010 the company filed for bankruptcy. The reason for filing was to settle asbestos lawsuits. Then, Christy Refractories' insurance carriers have been settling asbestos-related claims at approximately $1 million per month.
Since the 1980s asbestos trust funds have dispensed more than 20 billion dollars. These funds can be used to cover the loss of income and therapy costs. Among these funds are the Western MacArthur Trust, the M.H. Detrick asbestos trust fund Trust and Thorpe Insulation Settlement Trust are among these funds. Porter asbestos compensation Trust.
Products of the Thorpe Company included insulation and refractory materials. Asbestos was also a component in their products. The company filed for Chapter 11 bankruptcy in 2002 however it was revived in the year 2006. It handled more than 4,500 claims.
The Western MacArthur Trust has paid out more than $1.1 billion in claims. The Synkoloid Company, Abex Corporation, and Pneumo Corporation all used asbestos in their products. The United States Gypsum Company used asbestos in its products.
The Utex Industries, Inc. Successor Trust has paid out over 2,000 asbestos claims. It supplied sealing products to the oil extraction industry.
The Prudential Lines Trust was subject to hundreds of lawsuits, mass tort actions, and a 20 year period for the disbursement of funds.
The Western MacArthur Asbestos Settlement Trust has paid more than $500 million in claims. It also manages Yarway claims.
The Thorpe Insulation Settlement Trust covers the Pacific Insulation Company and the Thorpe Insulation Company.
Federal Mogul's Asbestos PI Trust
Originally filed in 2007, Federal Mogul's Asbestos Personal Injury Trust was originally filed in 2007. It is a trust that is meant to aid victims of asbestos exposure. The Federal Mogul Asbestos PI Trust is a bankruptcy trust which provides financial compensation for ailments that resulted from asbestos exposure.
The initial assets of $400 million were used to establish the trust in Pennsylvania. It paid out millions of dollars to claimants following its establishment.
The trust is currently located in Southfield, asbestos litigation MI. It is comprised of three separate coffers. Each is devoted to the administration of claims against entities who produce asbestos products for Federal-Mogul.
The primary objective of the trust is to pay financial compensation for asbestos-related diseases among the roughly 2,000 jobs that require asbestos. The trust has already paid more that $1 billion in claims.
The US Bankruptcy Court estimated the asbestos liabilities' total value to be approximately $9 billion. It also found that it was in the best interest of the creditors to increase the value of the assets they have access to.
In 2007, the Asbestos PI Trust (PI Trust) was established. Elihu Inselbuch was a partner at the firm Caplin & Drysdale and served as the Trust attorney.
To deal with claims, the trust created Trust Distribution Procedures (or TDPs). These TDPs are intended to be fair to all claimants. They are based upon past precedents for nearly identical claims in the US tort system.
Reorganization helps asbestos companies protect themselves from mesothelioma lawsuits
Many asbestos lawsuits are settling every year, thanks in part to the bankruptcy courts. Large corporations are employing innovative strategies to access the judicial system. Reorganization is a common strategy. This allows the business to continue to function and provide relief to creditors who have not been paid. Furthermore, it is possible for the company to be shielded from individual lawsuits.
For example the trust fund could be established for asbestos victims as part of a restructuring. These funds can be used to pay in cash, gifts or the combination of both. The reorganization discussed above consists of an initial funding quote and a court-approved plan. A trustee is appointed after the reorganization was approved. This could be an individual or bank, or even a third party. A successful reorganization will benefit everyone involved.
Alongside announcing a fresh strategy for bankruptcy courts, the reorganization offers some effective legal tools. It's not surprising that a large number of businesses have filed for chapter 11 bankruptcy protection. Some asbestos companies were forced to declare bankruptcy under chapter 7 to ensure their safety. Georgia-Pacific LLC, for example was the first to file chapter 7 bankruptcy in 2009. The reason is straightforward. To guard itself against mesothelioma cases that have been rife, Georgia-Pacific filed for a restructuring and rolled all of its assets into one. It has been selling its most valuable assets to get control of its financial problems.
FACT Act
The "Furthering Asbestos Claim Transparency Act" is currently in Congress. It will make it harder to file fraudulent claims against asbestos trusts. The legislation will make it more difficult to make fraudulent claims against asbestos trusts and will grant defendants access to unlimited information in litigation.
The FACT Act requires that asbestos trusts publish a list of those who are claiming on a docket of court. They are also required to disclose the names of the claimants, their exposure history, as well as compensation amounts they pay these claimants. These reports, which are publically accessible, can stop fraud from occurring.
The FACT Act would also require trusts to divulge any other information, including payment details even if they are part of confidential settlements. The Environmental Working Group's report on FACT Act found that 19 House Judiciary Committee members voted for the bill. They also received donations from asbestos-related organizations.
The FACT Act is a giveaway to big asbestos companies. It could also delay the process of settling compensation. Additionally, it creates significant privacy concerns for victims. In addition, the bill is a terribly complicated piece of legislation.
The FACT Act prohibits publication of information in addition to information that must be published. It also prohibits release of social security numbers, medical records or other information that is protected by bankruptcy laws. It is also more difficult to seek justice in courts.
In addition to the obvious issue of how a victim's compensation may be affected by the FACT Act is a red herring. The Environmental Working Group studied the House Judiciary committee's most significant achievements and found that 19 members were awarded campaign contributions from corporations.
