Billion-dollar companies are increasingly using bankruptcy courts to avoid paying full compensation to people harmed by asbestos exposure — even when they have the resources to pay.
Whittaker, Clark & Daniels, a former supplier of talc for cosmetics, faces more than 1,000 lawsuits from individuals who developed serious illnesses linked to asbestos. Instead of allowing victims their day in court, Whittaker filed for bankruptcy in 2023. Although the company is backed by a Berkshire Hathaway subsidiary, it is seeking to limit payouts through a $535 million fund — negotiated largely without input from those affected.
“This is extraordinary,” said attorney Matthew Kutcher, who represents asbestos victims.
“The company and its insurer are essentially deciding what victims should receive, without truly negotiating with them.”
The tactic Whittaker is using, known as the Texas Two-Step, allows companies to shield assets by shifting liabilities into a newly created entity and forcing it into bankruptcy.
The stakes are particularly high. Mesothelioma diagnoses among women have risen by nearly 30% over the past two decades, increasingly from exposure to asbestos from everyday makeup powders and talc products. Advocates warn that if companies can use bankruptcy to escape responsibility, thousands of victims will be left without justice.
To read the full article in Environmental Health News, please visit: https://www.ehn.org/billion-dollar-firms-are-using-bankruptcy-court-to-dodge-responsibility-for-asbestos-contaminated-products
