October 8, 2011

Asbestos Trust Funds Scrutinized by Republicans in Congress

Imagine a hammock that more and more people keep piling into without anybody getting out. The weight would quickly become too burdensome to bear and, sagging with a tangle of limbs and torsos, the rope would break. That’s what companies whose livelihoods were once asbestos dependent are like. With billions paid in asbestos news, Asbestos litigation each year, the financial strain of numerous personal injury lawsuits from employees exposed to asbestos is too much for any corporation to hold.
What’s best for both the injured employees seeking compensation as well as the companies themselves is for the hammock to hold, or at least have a safety net in place. That’s why more and more of those companies have filed for Chapter 11 bankruptcies to reorganize their assets and debts as well as put aside money for injured asbestos workers into what are known as asbestos bankruptcy trusts. More and more of these have been established as more and more companies have filed Chapter 11’s over the past two decades. 

The only problem with asbestos bankruptcy trusts is that the asbestos  news for workers who are ill from asbestos litigation — whether with asbestosis news, or some other type of asbestos-related cancer — don’t receive what they need and deserve, which is the full value of their settlements. The system was created to make asbestos claims easier to file, often requiring no more than a diagnosis and a form to fill out. Yet, the amount of money that actually makes it to the injured worker is typically less than one third the amount of the settlement, according to a study by the RAND Corporation. 

Now, there are around 50 different asbestos bankruptcy trusts paying out billions in asbestos claims each year. However, there are still many solvent companies liable for asbestos litigation injuries. Mesothelioma lawsuits are being filed against these solvent companies as regularly as the spinning of a well-oiled wheel. The companies have lawyers scrambling for ways to limit their liability and avoid taking responsibility for the widespread tragedy of asbestos-related cancer and other illness. To that end, defense lawyers want access to detailed records from asbestos bankruptcy trusts, allowing them to see who is paid how much for what specific illness. 

Lately, Republicans in Congress are looking at the issue, deciding whether to make changes to these asbestos bankruptcy trusts. As reported by the National Law Journal (subscription required), asbestos lawyers and asbestos news argue that the corporate defense lawyers want this reform only to expose the spokes of that well-oiled wheel so that they can throw in sticks. 

There is no telling how soon or in what way Republicans in Congress will act on this issue. Meanwhile, if you have asbestos problem or another asbestos-caused illness, you may have a claim against an existing or future asbestos bankruptcy trust. If you were exposed to multiple asbestos products that were manufactured by different bankrupt companies, you may actually qualify for compensation under several trusts.