Asbestos Bankruptcy Trusts
Companies that file for bankruptcy typically establish asbestos bankruptcy trusts. These trusts then cover personal injury claims for those who were exposed to asbestos. At least 56 asbestos bankruptcy trusts have been set up in the late 1970s.
Armstrong World Industries Asbestos Trust
Armstrong World Industries was founded in the year 1860 in Pittsburgh. It is the largest wine cork maker in the world. It employs more than 3000 workers and has 26 manufacturing locations around the world.
The company used asbestos in a variety of products like tiles, insulation, vinyl flooring, and tiles in its early years. As a result, employees were exposed to the material, which can lead to serious health issues like mesothelioma or lung cancer and asbestosis.
The company’s asbestos-containing products were widely used in the residential, commercial and military construction industry. Due to the exposure hundreds of Armstrong employees were affected by asbestos-related illnesses.
While asbestos is a naturally occurring mineral, it isn’t safe for human consumption. It is also known as a fireproofing material. Because of the dangers associated with asbestos, businesses have established trusts to compensate victims.
A trust was established to pay the victims of Armstrong World Industries’ bankruptcy. The trust was able to pay out more than 200,000 claims during the first two years. The total amount of compensation was greater than $2 billion.
Armor TPG Holdings, which is a private equity corporation is the trustee of the trust. In the beginning of 2013 the company owned more than 25 percent of the fund.
According to the Asbestos Victims Compensation Trust, the company is estimated to have been liable for more than $1 billion in personal injury claims. The trust has more than $2 billion in reserves to cover claims.
Celotex Asbestos Trust
During the early to mid 1980s, Celotex Corporation, a manufacturer and distributor of building products, was confronted with numerous lawsuits alleging asbestos related property damage. These claims, as well as others claimed billions of dollars in damages.
Celotex filed for bankruptcy protection in the year 1990. The plan of reorganization created the Asbestos Settlement Trust to process asbestos-related claims. The Trust filed a claim at the United States District Court for [empty] Middle District of Florida. Saiber L.L.C. represented the Trust.
The trust applied for coverage under two policies of excess comprehensive general liability insurance. One policy provided coverage of five million dollars. While the second policy provided coverage for 6.6 million. The trust also requested coverage from Jim Walter Corporation. However, it found no evidence that the trust was required to send notice to excess insurers.
Celotex Asbestos Trust submitted proofs of bodily injuries claims on December 31 2004. The trust also filed a motion seeking to overturn the special master’s decision.
Celotex had less that $7 million in primary insurance at the time of filing, but was of the opinion that future asbestos litigation would affect its excess coverage. The company actually anticipated the need for several layers of excess insurance coverage. The bankruptcy court was unable to find any evidence that Celotex provided adequate notice to its insurers who were in excess.
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.
The process can be difficult to understand. The trust offers a simple claim management tool as well as an interactive website. The website also has a section dedicated to claim inaccuracies.
Christy Refractories asbestos lawsuit edinboro Trust
Christy Refractories originally had an insurance pool of $45 million. The company was declared bankrupt in 2010 however. The filing was filed to settle asbestos lawsuits. Christy Refractories’ insurers have been settling asbestos claims for approximately $1 million per month since.
There have been more than 20 billion dollars distributed from asbestos trust funds since the end of the 1980s. These funds are able to cover the cost of therapy as well as lost income. Some of these funds include the Western MacArthur Trust, the M.H. Detrick Asbestos Trust, the Thorpe Insulation Settlement Trust, and the M.H. Porter Asbestos Trust.
The Thorpe Company’s product range included insulation and refractory materials, which contained asbestos. In 2002, the company filed for Chapter 11 bankruptcy. However, it was reemerged in 2006. It handled over 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 over 22,000 asbestos claims. It also supplied sealing products to the oil industry.
The Prudential Lines Trust was subject to hundreds of lawsuits, mass tort actions, and a twenty year limitation on the distribution of funds.
The Western MacArthur Asbestos Settlement Trust has paid out more than $500 million in claims. It also handles claims against Yarway.
The Thorpe Insulation Settlement Trust includes the Pacific Insulation Company as well as the Thorpe Insulation Company.
Federal Mogul’s Asbestos PI Trust
Originally filed in 2007, Federal Mogul’s Asbestos Personal Injury Trust was filed in 2007 and is an insurance trust designed to aid victims of asbestos exposure. The Federal Mogul Asbestos PI Trust is a bankruptcy trust that provides financial compensation for diseases that were caused by asbestos exposure.
The initial assets of $400 million were used to establish the trust in Pennsylvania. After the trust’s establishment, it paid out millions to those who claimed.
The trust is located at Southfield, MI. It is made up of three separate coffers of money. Each is dedicated to handling claims against asbestos lawsuit in westfield product entities belonging to the Federal-Mogul group.
The main purpose of the trust is to provide financial compensation for asbestos-related illnesses within the 2,000 occupations that employ asbestos. The trust has paid out more than $1 billion in claims.
The US Bankruptcy Court estimated the asbestos liabilities’ value to be around $9 billion. It was also decided that creditors should maximize the value of their assets.
The Asbestos PI Trust was created in 2007. Elihu Inselbuch, a partner in the firm Caplin & Drysdale, served as the Trust attorney.
To deal with claims, the trust created Trust Distribution Procedures (or TDPs). These TDPs are designed to be fair to all claimants. They are based on historical values for claims that are substantially comparable in the US tort system.
Reorganization of asbestos companies helps protect them from mesothelioma lawsuits
Every year thousands of asbestos lawsuits are settled thanks to the bankruptcy courts. As a result, big corporations are using new methods to access the judicial system. Reorganization is a common strategy. This allows the company to continue operating and provide relief to creditors who have not been paid. Additionally, it could be possible for the company to be shielded from lawsuits filed by individuals.
As an example, during an organizational reorganization, there is a trust fund for asbestos victims may be established. These funds may pay out in the form of gifts, cash or a combination of both. The reorganization described above is an initial funding estimate and is followed by a reorganization plan approved by the court. A trustee is appointed once a reorganization has been approved. This could be an individual, a bank or a third party. The best way to organize will benefit all affected.
The reorganization announcement not only reveals a new strategy to bankruptcy courts, but also unveils powerful legal tools. Hence, it’s no wonder that a lot of companies have filed for chapter 11 bankruptcy protection. Some charleston asbestos law firm companies were forced to make chapter 7 bankruptcy filings in order to protect themselves. Georgia-Pacific LLC, for example had filed chapter 7 bankruptcy in 2009. The reason is easy. To protect itself from mesothelioma-related claims, Georgia-Pacific filed for a restructuring and rolled over all of its assets into one. To alleviate its financial woes, it has been selling its most important assets.
FACT Act
Presently, there is a bill in Congress, called the “Furthering Asbestos Claim Transparency Act” (FACT) that will change how asbestos attorney in phoenix trusts function. The law 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 listing plaintiffs on a public court docket. They must also provide the names, exposure history, and the amount of compensation they paid to these claimants. These reports, which are made publicly available, would prevent fraud from happening.
The FACT Act would also require trusts to share any other information including payment information, even if they are part of confidential settlements. In fact the report on FACT Act by the Environmental Working Group found that 19 members of the House Judiciary Committee who voted for the bill received campaign contributions from Asbestos Law Firm Durham-related businesses.
The FACT Act is a giveaway for asbestos companies with huge profits. It could also delay the process of settling compensation. Additionally, it raises serious privacy issues for victims. The bill is also a complex piece of legislation.
In addition to the information required to be published, the FACT Act also prohibits the publication of social security numbers, medical records, and other information protected by bankruptcy laws. It’s also more difficult to seek justice in courtrooms.
Apart from the obvious question of how a victim’s compensation may be affected, the FACT Act is a red herring. The Environmental Working Group examined the House Judiciary committee’s most notable accomplishments and discovered that 19 members were given corporate campaign contributions.
