Mesothelioma and Asbestos Trust Funds
A mesothelioma trust fund is created on behalf of negligent asbestos companies that have gone bankrupt. The purpose of trusts is to set aside money for future asbestos claims. This trust fund protects mesothelioma victims who are eligible for compensation from asbestos companies that file for bankruptcy.
What is the Mesothelioma Trust Fund?
When asbestos producers file for Chapter 11 bankruptcy protection, they create an asbestos trust fund. These are sometimes referred to as “mesothelioma trust funds” and they provide future compensation for mesothelioma victims and others injured by asbestos exposure.
Key facts about Mesothelioma Trust Funds:
- In these trust funds created in bankruptcy court, money is set aside to cover future claims.
- Mesothelioma patients can file claims with more than one trust fund.
- In addition to mesothelioma, trust funds may be available to help people with other asbestos-related diseases.
It is important to find an experienced asbestos attorney who is well versed in the asbestos trust fund claims process. A mesothelioma lawyer can help you gather evidence to prove that exposure to asbestos products was responsible for your cancer to help you document your eligibility to file a successful trust.
Who is eligible to file an asbestos trust fund claim?
Those exposed to asbestos who develop mesothelioma or another asbestos-related disease are usually eligible to sue.
People eligible to submit a trust fund claim include workers exposed to asbestos through their employer, workers who use asbestos-containing products, people with secondhand exposure to household members, people who are environmentally exposed, and family members who have lost a loved one to asbestos exposure.
How much money is left in the asbestos trust fund?
There are approximately 60 active asbestos trust funds with approximately $30 billion available to future claimants.
These trusts have paid out nearly $20 billion to claimants since the late 1980s. This figure includes an estimated $15 billion paid out between 2006 and 2012, the most recent data available.
Given the long latency period of asbestos-related diseases, new claims are expected to emerge for several decades.
Trusts are established after a rigorous due diligence process. This procedure determines how much money should be set aside for current and future asbestos claims. Management processes are established to ensure that funds last long enough to compensate future claimants.
To ensure that enough money is available for future claims, claimants usually receive a percentage of the value of their claim. This prevents funds from running out too soon, but it also means that most victims receive less than they might otherwise receive.
How does trust fund payout percentage work?
Trust funds offer a fixed payout percentage of the value of a claim to save money for future victims who will be diagnosed years from now.
For example, using an average value of $180,000 for mesothelioma claims, if the trust’s payout percentage is 25%, the payout would be $45,000. That compensation can be substantial enough to help cover medical bills and lost wages.
Related: Workers’ Compensation for Best Mesothelioma Patients 2022
Filing an Asbestos Trust Fund Claim
There are several steps involved in filing a trust fund claim, including meeting the fund’s criteria and gathering evidence before filing the claim. A mesothelioma attorney will guide you through these steps to give you peace of mind and let you focus on your recovery.
Step 1: Meet Trust Fund Criteria
Each asbestos trust fund sets its own criteria that must be met to file a successful claim. The criteria are typically outlined on the trust fund’s website.
The criteria commonly include:
- When your asbestos exposure occurred
- Where the exposure took place
- Proof of an asbestos-related diagnosis
- Information or evidence about the asbestos products you were exposed to
- Statute of limitations for filing a claim
Step 2: Collect Evidence to Support Your Claim
You and your attorney will work together to gather evidence to support your claim.
Evidence required to file an asbestos trust claim usually includes:
- Patient’s Diagnosis: Medical documentation proving an asbestos-related diagnosis such as a pathology report and imaging scans.
- Physician Statement: A statement drafted by a qualified physician, such as a doctor or oncologist, confirming the diagnosis.
- Exposure Site: Evidence confirming asbestos exposure, which may include witness affidavits, employment records and invoices.
- Asbestos Involvement: Medical documentation describing the extent to which asbestos contributed to the claimant’s disease.
Step 3: Submitting Your Claim
Once your attorney has gathered evidence, they will submit it in accordance with the trust’s protocols. Most trusts accept claims submitted electronically through their websites, while others may require submission of a printed claim through the mail.
Your attorney will find the best method to submit your claim to ensure a smooth approval process.
Step 4: Claim Reviewed for Approval
There are generally two options to choose from when asking a trustee of a fund to review your claim, but make sure to inquire with the trust’s administrators or ask your attorney to explain the process.
The evidence in your claim will be reviewed by the trust’s administrators, typically in one of two ways:
- Expedited Review: Your claim will be grouped with other claims based on your diagnosis, which allows trust administrators to more quickly review the claims. A fixed payment amount is associated with an expedited review, and payment is typically received faster than an individual review.
- Individual Review: Your claim will be individually reviewed, which takes longer than an expedited review. More factors are considered through an individual review such as the extent of your disease and how many dependents you have. The payment amount could be higher or lower than the fixed amount associated with an expedited review.
Filing Limitations for Mesothelioma Trust Fund Claims
Before filing a trust fund claim, it’s important to know all of your legal options. A qualified mesothelioma attorney can help you navigate this process and determine whether filing an asbestos trust fund claim is right for you.
Statutes of Limitations: A trust fund claim must be filed within the statute of limitations prescribed by each trust. Each trust sets its own time limit for filing a claim, usually about two to three years after a mesothelioma diagnosis or death.
State laws: The federal government leaves it up to each state to create its own asbestos laws. State laws determine how trust compensation affects the determination of litigation awards.
Setoffs: Often, if claimants have already received trust payments, the defendants they sue can deduct the amount of that payment from the court’s award. Some states, including Illinois, New York, Texas and West Virginia, may allow setoffs for trust payments.
Filing Multiple Claims and Lawsuits: In some cases, claimants may file asbestos trust claims and asbestos lawsuits at the same time. Various state laws require claimants to disclose information about other claims they have filed in the past.
Sharing of Information: State courts have different rules regarding sharing trust claim information with claimants. Some courts require disclosure of any claims submitted to the trust during the discovery phase of the lawsuit.
How is an asbestos bankruptcy trust created?
Mesothelioma trust funds are typically created by Chapter 11 bankruptcy courts and funded with enough money to cover future claims, allowing people with all types of asbestos-related diseases to file claims in the trust fund instead of suing the company. .
Mesothelioma patients can file claims against one or more trusts. The process may require you to provide medical records, a physician’s statement, and an asbestos exposure summary. An experienced asbestos lawyer can provide you with a list of asbestos bankruptcy trusts and help you navigate the trust fund process. These trust funds are available to help people with all types of asbestos-related diseases, but mesothelioma claims typically result in the highest compensation.
Some asbestos manufacturers who did not have sufficient financial standing to reorganize and establish a trust fund filed for Chapter 7 bankruptcy liquidation instead. Through the Chapter 7 liquidation process, the company sells its assets and the courts distribute the money to claimants and others.
Companies submit plans to bankruptcy court
Companies that cannot pay their asbestos liabilities and want to continue in business must submit detailed plans to the bankruptcy court for reorganization. These plans include money they will put into trust to pay current and future asbestos claimants and creditors.
Estimates of asbestos claims have been established
Courts conduct estimation proceedings, which are similar to court trials. In this proceeding, each interested group submits its estimate of how much money should be placed in the trust for asbestos claims. They support their estimates of how much the company has paid in compensation for past asbestos claims with testimony from experts, including legal experts who are knowledgeable about the cost of settling past asbestos lawsuits.
The judge considers the reorganization plan
The bankruptcy judge weighs the evidence, including estimates and expert testimony. The judge then decides how much money should be set aside for the asbestos claim. Court approval can take many years and multiple estimation proceedings. Once the plan is approved, the company transfers the money to the trust fund and a trustee is appointed to manage the trust.
A trustee manages the fund
An appointed trustee administers the trust and the claimant process to ensure that sufficient funds are available to compensate future victims. Trustees must provide annual reports on the financial condition of the trust.
How Asbestos Trust Fund Claims Compare to Other Mesothelioma Claims
Trust fund claims are a legal option for victims of asbestos exposure, but they are separate from lawsuits and VA claims. Asbestos trust fund claims are procedurally different from filing a lawsuit in court, but they can still pay substantial compensation to people injured by asbestos products.
Compensation from lawsuits comes through mesothelioma settlements or jury verdicts. Asbestos companies that have successfully filed for bankruptcy reorganization and established a trust are protected from future asbestos lawsuits because the claims are handled by the trust fund, not by the reorganized company.
VA claims are not technically legal claims, but they provide compensation and health care to veterans of the US armed forces and their families. A qualified attorney at a mesothelioma law firm can help you determine your legal options.
FACT Act and Asbestos Tort Reform
The federal government oversees asbestos trust funds and how they distribute money. A law that seeks to govern the trust fund, known as the Furthering Asbestos Claims Transparency (FACT) Act, has drawn criticism from plaintiffs’ lawyers and support from defendants’ lawyers.
The FACT Act would amend the bankruptcy code to require asbestos trust funds to report their payments. Those who oppose the act note that it would put claimants’ personal information in a public database. The bill had repeatedly stalled in the legislature in previous years. It has stalled and no notable action has been taken since 2017.
DOJ Review of Trust Fund Claims
Since late 2018, the Justice Department has increased scrutiny of the Asbestos Trust Fund, urging greater accountability. The department has suggested that trust funds lack adequate safeguards to prevent fraudulent claims and mismanagement.
In September 2018, the department filed an official statement of interest in bankruptcy proceedings for Kaiser Gypsum Company. Shortly thereafter, the department challenged the appointment of a trustee for the Duro Dion Company Trust, claiming that the attorney was too conflicted to represent the interests of future claimants.
“Asbestos victims should be confident that they will receive compensation when promised, but fraudulent claims and mismanagement call that promise into question,” Jesse Panuccio, DOJ’s principal deputy associate attorney general, said in a statement of interest.