Since the early 1980’s, companies responsible for inflicting asbestos-related
illness on hundreds of thousands of Americans have sought to limit or
escape legal liability through filing for Chapter 11 bankruptcy protection.
By filing Chapter 11, a company is given immediate immunity from lawsuits
filed by the victims of its asbestos products. The company is then given
many years to satisfy a number of legal requirements while the victims,
many of whom do not have the luxury of time, are forced to wait. Upon
meeting the requirements, the company is granted permanent immunity from
lawsuits filed by all past and future victims, and is able to emerge from
bankruptcy and continue doing business as usual.
The one consolation to asbestos illness victims is the requirement that
the company pool assets and insurance proceeds and place them in a trust
to compensate past and future victims. The trust establishes guidelines
dictating the amount of compensation to be paid to claimants based primarily
on severity of illness. While it is not necessary for victims to appear
in court or provide testimony, the amount received from the trust is often
far less than what would have been received if the company could be sued
in a lawsuit.
Since the first major bankruptcy filing by Johns-Manville Corp., in 1982,
nearly 70 companies that either made or installed asbestos insulation
or that sold or used products containing asbestos have filed for bankruptcy.
Since the beginning of 2000, at least 40 companies have filed for bankruptcy
(Click Here for a List Bankrupt Manufacturers)
From Roger Worthington
A Message to Asbestos Defense: Solve the Problem, Cure the Cancer.
Explosion of Unimpaired Claims, Uncaring Congress and Legal Loopholes Accelerate Asbestos Company Bankruptcies;
Bankruptcy Courts Wrestle With Payout Ratio For Mesothelioma Victims vs.
Los Angeles Times, December 18, 2001
A series of multi-million-dollar jury awards to victims of asbestos exposure
in recent months is sending shock waves through corporate America, contributing
to several major bankruptcy filings and warnings of massive future damages.
The wave of new litigation and a surge in the number of people reporting
exposure are a blunt reminder that the asbestos problem, a largely forgotten
product liability mess of the 1980s, has not gone away.
Wednesday August 15, 2001
All major U.S. asbestos makers are likely to be bankrupt within the next
two years as people with asbestos-related ailments continue to file injury
and compensation claims against the companies, a study published on Wednesday said.
Just as the ongoing epidemic of asbestos-caused mortality and injury has
been overshadowed by the controversy over litigation, the origins of asbestos
lawsuits have been buried beneath claims that litigation has "bankrupted"
dozens of large U.S. companies, and that Congress must put an end to asbestos
litigation in order to protect more companies from going bankrupt in the future.
- Key to Owens Corning Bankruptcy Exit (10/25/06)
- OCF and Fibreboard $5.1 Billion Asbestos Settlement Trust Approved, Takes
Effect October 30, 2006. (10/4/06)
- Owens Corning Files for Bankruptcy (10/5/00)
United Stated Gypsum
Automobile/Friction Product Manufacturers
A.P. Green, Harbison Walker Company
North American Refractories
- U.S. Gypsum Files for Chapter 11 (6/28/01)
- Former Asbestos Maker USG Considers Bankruptcy (6/4/01)
Against Backdrop of Rash of Chapter 11 Bankruptcies, Time to Consider Legislation
That Preserves Right of Access to Courts for Malignancy/Disabled Asbestos