The Mesothelioma Fund
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Mesothelioma and Asbestos Trusts
Asbestos bankruptcy trusts exists to compensate workers and their families who were
injured by companies that manufactured asbestos. Those companies establish the trusts, but
they are managed by trustees who decide the amount of compensation paid to claimants.
Mesothelioma patients and others who have been injured by asbestos may be eligible to
receive compensation by suing those responsible for their injuries. But what happens if a
negligent company has filed for bankruptcy?
Companies that successfully file for bankruptcy reorganization are protected from lawsuits.
Fortunately, the U.S. Bankruptcy Code allows for the creation of asbestos bankruptcy
trusts. Asbestos defendants who have been approved for bankruptcy reorganization under
code section 524(g) are required to fund these trusts with enough money to pay current and
future asbestos claims.
How Are Trusts Created?
Asbestos defendants file for protection under a legal process known as bankruptcy
reorganization with hopes of staying in business. Section 524(g) of the U.S. Bankruptcy
Code allows defendants to bow out of the tort litigation system. But in exchange, the
defendants must put money aside to pay current and future claims. The court must approve
the amount that is set aside before the company is granted bankruptcy protection. Since
bankruptcy reorganization is a lengthy process, receiving that approval can take several
years.
How Trust Claims Are Decided
Bankruptcy trusts are set up on behalf of companies with asbestos liabilities, but the
companies do not operate the trusts. In fact, these companies do not review claims or make
any determinations based on the evidence submitted by claimants.
Trustees manage asbestos trusts for the benefit of present and future claimants. The claims
are processed and decided under preset trust distribution procedures. Representatives of
current and future claimants must consent to any significant changes to these procedures.
Trusts often publish additional information about their rules, guidelines and qualifications.
Among the information they can publish is a list of confirmed exposure sites.
