An asbestos trust fund is designed to compensate individuals exposed to asbestos and developed mesothelioma as a result. A company will file a Chapter 11 bankruptcy and set up a trust fund if it receives numerous claims for negligently exposing individuals to asbestos. This will ensure there is compensation available for present and future claims.
Asbestos trust funds provide compensation to eligible individuals with asbestos-related diseases. According to the Rand Corporation, 730,000 asbestos exposure victims filed lawsuits against asbestos companies who had negligently exposed them to asbestos during the period from the early 1970s through the end of 2002, and these numbers are rising.
Mesothelioma patients are not always eligible for asbestos trust fund proceeds, nor are trust funds the only method by which victims can receive compensation. The Lanier Law Firm is a nationwide law firm with extensive experience in asbestos litigation. We help our clients identify all responsible parties and obtain maximum compensation through every means available.
What is an asbestos trust fund?
The dangers of exposure to asbestos and asbestos-containing products were recognized as far back as the 1930s, and by the 1950s, many asbestos manufacturers and employers were aware of the dangers of asbestos products but failed to provide workers with warnings or protective measures. Many companies actively concealed this information, knowingly subjecting their workers to years of daily exposure to a highly hazardous product.
Since asbestos-related illnesses often have a latency period of 20 to 50 years, workers were unaware of the danger until large numbers of them became ill with mesothelioma, lung cancer, asbestosis or other asbestos diseases. As vast numbers of injured workers filed mesothelioma lawsuits against the negligent companies, these companies quickly became overwhelmed with their liabilities.
Facing insolvency, the companies filed for Chapter 11 bankruptcies. The companies were court-ordered to set aside monies to compensate future asbestos claimants through trust funds set up as part of their reorganization under the Chapter 11 bankruptcy code. The purpose of the asbestos bankruptcy trusts was to ensure mesothelioma compensation would be available for present and future claims.
Chapter 11 U.S. Code § 524(g) establishes these funds as a no-fault system that protects the companies from asbestos lawsuits. This helps to ensure enough money will be available for future victims.