Asbestos trust funds provide financial compensation to people who have been exposed to asbestos and contracted an asbestos-related disease such as mesothelioma, a lethal cancer of the cells lining the lungs or abdomen. These trusts are established by asbestos manufacturers that had been sued multiple times and filed for bankruptcy reorganization. The trusts – also referred to as asbestos bankruptcy trusts or asbestos compensation funds — are created under section 524(g) of the U.S. Bankruptcy Code – to cover current and future asbestos disease claims. The establishment of trusts also prevents victims of asbestos disease from filing lawsuits against the funding corporation.
Today, there are more than 50 asbestos trust funds with over $32 billion in remaining assets. The funding level for each trust is determined through rigorous court reviews that estimate future claims, which could come decades after exposure to asbestos.
Trusts are not administered by the corporations that established them; they are managed by court appointed trustees.
The first asbestos trust funds
UNR Industries, Inc. was the first asbestos company to file for bankruptcy protection in July 1982. Not long after, Amatex Corp. followed with its own filing later that year. UNR Industries, Inc. and Amatex Corp. were relatively small compared to Johns-Manville Corp., which also filed for bankruptcy in 1982.
Johns-Manville Corp. was the first major asbestos bankruptcy filing. Johns-Manville was a manufacturer of asbestos insulation and roofing since 1901. By the 1930s, the corporation’s employees had contracted an unusual amount of lung disease. Employees began to sue Johns-Manville, and by 1982 the company was facing so many individual lawsuits that it decided to file for bankruptcy protection. In 1988, Johns-Manville established one of the largest asbestos trusts. The company’s asbestos trust fund, Manville Personal Injury Settlement Trust, was seeded with $2.5 billion in funds, has paid out more than $4 billion to victims, and still has to pay for future claims.
Other major asbestos trust funds include:
- Armstrong World Industries Asbestos Personal Injury Settlement Trust
- Babcock & Wilcox Asbestos Personal Injury Settlement Trust
- Combustion Engineering 524(g) Asbestos PI Trust
- G-I Holdings Inc. Asbestos Personal Injury Settlement Trust
- Kaiser Asbestos Personal Injury Trust
- Owens Corning/Fibreboard Asbestos Personal Injury Trust
- United States Gypsum Asbestos Personal Injury Settlement Trust
- W.R. Grace Asbestos PI Trust
To date, the trusts have paid out more than $21 billion to approximately 1 million individual claimants.
Eligibility and claims
A person who has been diagnosed with mesothelioma, lung cancer caused by asbestos, or another asbestos-related disease, is eligible to receive compensation from asbestos trust funds, and if exposed to asbestos from multiple companies, he/she is eligible to receive compensation from each company’s trust fund.
After a person has been diagnosed, he/she can file a claim with the trust fund(s). Each fund lists guidelines for filing. The guidelines generally include a verified doctor’s diagnosis of the asbestos-related illness and documentation of dates and locations of exposure to asbestos.
After a claim has been submitted, it can take anywhere from a few months to over a year for the trust to process and review the claim and return an award amount.
People can file claims by themselves but they may receive bigger awards when they are assisted by experienced asbestos attorneys, who can make sure that all related evidence is presented and all documentation is completed correctly. An attorney may also be able to negotiate higher compensation.
The amount paid out to each victim can vary widely. The average payment for claimants with mesothelioma is about $260,000, but some claimants can receive several times that amount.
Expert legal services
Steven Kazan is one of the nation’s preeminent and most experienced asbestos litigation attorneys. For the past 44 years, he and the law firm he founded have represented hundreds of injured workers suffering from asbestos-related mesothelioma in some of the most high-profile cases in history, against Johns-Manville, Fibreboard, Johnson & Johnson, and others.
Steven and his law firm provide advice to hundreds of potential clients each year and have filed more than 2,000 individually-developed cases.
Steven’s groundbreaking work has helped victims and their families redress the wrongs done to them, and his work has prompted changes in asbestos law that benefit victims.