July 30, 2012
Putting your trust in asbestos trusts
If you watch TV then you have likely seen ads about money being held in trust for victims of asbestos exposure. Many friends have asked me about these. Who is eligible? When can a claim be made? How do trusts work? Is it too good to be true? So, I thought I would enlighten our blog readers on this subject matter.
What is an Asbestos Trust, and How Does it Work?
An Asbestos Trust reviews and pays claims submitted by people suffering from asbestos-related diseases caused by products made or sold by a company that declared bankruptcy.
There are a number of Asbestos Trusts. Many companies that made or supplied asbestos or asbestos-containing products have declared Chapter 11 bankruptcy. A large number of these companies and their affiliates did so in the early 2000s, although a few of them declared Chapter 11 as late as 2010 and 2011.
For bankrupt companies, the question of litigation, asbestos claims, pensions and the company’s general restructuring must now take place within the bankruptcy system. This means that a judge will oversee and approve the entire operation. For large corporations, this can be complex and time-consuming. Sometimes, it can take years to work out all the details. Other times, it can be accomplished rapidly.
For many bankrupt companies that made or supplied asbestos or asbestos-containing products, a special kind of trust, a 524(g) Trust is proposed, funded and implemented to handle the claims of people suffering from or whose loved ones died as a result of certain asbestos-related diseases. Section 524(g) trusts are specifically designed by Congress to make sure people with asbestos-related injuries caused by now-bankrupt companies get paid. The Trusts are often funded through a combination of the Company’s insurance, stock or other assets. Each company’s case is different, and each Trust is specifically tailored with input from all interested parties to address the Company’s particular situation and liabilities.
Who is Eligible?
To qualify for payment, victims must meet medical criteria and prove their exposure level to the company’s products.
If a person has an asbestos-related cancer, they must provide a pathology report diagnosing their disease as the primary cancer, not secondary or one which has metastasized from another site. The pathology report must be signed and dated by a board-certified pathologist. Physical examinations may also be used as proof in certain circumstances. Certain malignant cancers also require a person to submit evidence of the “underlying” disease (the effect the disease has on their lungs). Certain tests, described below, will also be needed in order to meet the medical criteria under the Trust.
If a person has a non-malignant disease, it must be in both lungs for them to qualify for payment. Depending on how severe their disease is, they may also have to submit results of particular tests to the Trust. These include a pulmonary function test and B-reading. A B-reading is a review of an x-ray report performed by a specialist. If pulmonary function tests and B-readings show that their disease is severe enough, the person may qualify for payment.
In addition to qualifying medically, the asbestos victims must also provide evidence that they were exposed to the particular company’s asbestos-containing products for a certain length of time. They do this through in a variety of ways. Affidavits and other documents showing that the victim was at certain work sites during specific time periods and co-workers providing information in the form of sworn testimony are a few of the ways to prove exposure.
When must a claim be made?
If a company’s Trust is opened and established, exposed people must generally make their claims within a limited window of time after they were diagnosed with their asbestos-related disease. However, not all Trusts follow this rule. Some allow victims more time than others after their diagnosis to file claims. Perhaps the person or their family did not know until later that there was the possibility that asbestos helped cause their disease. For people diagnosed with cancer, they and their families are focused on treatment options and getting through the next few days, weeks or months.
Each asbestos disease is worth a certain amount (a scheduled value) under each Trust. All Trusts pay the most for mesothelioma because it is the most devastating and deadly form of asbestos cancer. In addition, because each Trust is funded by the bankrupt company‘s assets, it has a limited amount of money to pay all of the company’s victims. This means that many Trusts only pay a part of a claim’s value. How large a part is determined by the Trust’s Trustees. If the payment percentage is 100%, approved claims get paid 100% of their scheduled values. If the payment percentage is less than 100%, for example, 25%,each person is paid 25% of their qualified claim’s scheduled value. A Trust’s payment percentages can decrease or increase at any time. When a trust pays only a percentage of a claim’s value, there is also always the chance that additional money may be available for previously approved and paid claims.
So, where does all this leave us? Is this too good to be true? Not for those who suffer from an asbestos-related disease. Asbestos Trusts are there for those people and their families suffering from or hurt by the effects of an asbestos-related disease. They are set up to give those suffering from the malfeasance of bankrupt companies access to funds that might lessen their and their family’s suffering. They can be the only way to get paid by a bankrupt company. If you qualify, it is often worth pursing your claims.
So, the next time you see a TV commercial talking about asbestos trusts you’ll be more informed on what they are referring to.