Asbestos Bankruptcies and Your Case
Just because an asbestos company has filed bankruptcy does not mean you can’t pursue compensation.
Since the early 1980s, many companies that manufactured asbestos products have filed for bankruptcy after facing numerous asbestos lawsuits. These companies claimed that they did not have enough money to sustain all the current and projected mesothelioma and asbestos disease claims, so filing for bankruptcy allowed them a level of protection from mesothelioma and asbestos lawsuits.
The Creation of Asbestos Trusts
In the wake of the harmful and often deadly effects of the asbestos crisis, Congress amended the United States Bankruptcy Code and created asbestos trust funds. Asbestos companies filing for bankruptcy could now establish trusts for asbestos victims and shift all liability for present and future asbestos exposure claims in order to emerge from bankruptcy without liability. These trusts make payments based on agreements negotiated by the asbestos companies and approved by the courts.
The Mechanics of a Bankruptcy Trust
When an asbestos company decides to file for bankruptcy and establish a trust, any pending or future lawsuits are suspended and are funneled to the trust after it is established. A court oversees the creation of an asbestos creditors’ committee composed of representatives from different stakeholders to help create and govern the trust. There are two kinds of creditors: the businesses that the asbestos company currently owns and representatives for current and future parties who currently have or will have a claim against the company for an asbestos illness, such as mesothelioma.
The creditors’ committee works with the company to create a reorganization plan and to transfer all current and future mesothelioma lawsuits to a bankruptcy trust. Once the court accepts the reorganization plan, asbestos claims can resume and are redirected to the trusts.
Our attorneys sit on several Asbestos Trust Advisory Committees, including trusts for the companies listed below. However, we have the experience to file claims against any company with a bankruptcy trust.
- Armstrong World Industries
- Babcock & Wilcox
- Combustion Engineering
- Federal Mogul
- Fuller Austin
- G-1 Holdings, Inc.
- JT Thorpe Co.
- Owens-Corning Fibreboard
- Swan Transportation
- United States Gypsum (USG)
What does this mean for your case?
When we file a claim against a company (or companies) that has filed for bankruptcy, you will go through the normal discovery process with one of our mesothelioma attorneys. During this process, we will work with you to find when and where you were most likely exposed to asbestos. After the discovery process, your mesothelioma attorney will submit your claim(s) to the asbestos trusts separately from your lawsuit, if you have an active lawsuit in addition to bankruptcy claims.