View Full Version : Who pays for the asbestos/mesothelioma trust funds?
02-04-2015, 01:58 PM
Seen a lot of lawyer commercials talking about how billions have been set aside in trust funds for people with mesothelioma (and how you should call their law office to get a piece).
Since there's no such thing as free money, where do the funds in these trusts come from?
02-04-2015, 02:19 PM
insurance companies and syndicates like Lloydes of London.
02-04-2015, 06:50 PM
And I would guess ultimately consumers.
The Second Stone
02-04-2015, 06:54 PM
The lives of the people killed by mesothelioma are traded for the right to sue in court for money from the trust funds, which are funded by the manufacturers of the products and their insurers.
02-04-2015, 07:25 PM
Lloyd's wants absolutely nothing to do with asbestos, having nearly been obliterated by asbestos claims in the early 1990s, leaving thousands of "names" personally responsible for billions in claims and bankrupt. It took the creation of a special reinsurance unit called Equitas with backing by Berkshire Hathaway to keep Lloyd's alive. In light of all that, I can't imagine any other insurance companies would be interested in this market.
The companies that made asbestos-containing products have had to set aside funds for future claims as part of their bankruptcy reorganizations. At the core, it's primarily shuffling and shielding of assets.
As one example that I used to be (very!) tangentially involved with, a company called Owens Corning Fibreboard (OCF) was created to handle asbestos claims against Fibreboard (FIB) and Owens Corning (OC). OCF doesn't make anything, but they have billions of dollars set aside for claims. While people are making claims against OCF for damages caused by exposure to asbestos-containing products made by OC or FIB in the past, OC continues to stay in business, unaffected by these claims.
Some general info on this is at http://asbestos.com/legislation/trust-fund.php
02-04-2015, 07:30 PM
Because they were overwhelmed with claims many of the asbestos manufacturers went bankrupt. For example Johns Manville:
Asbestos litigation and Johns Manville
Starting as early as 1929, Johns Manville employees began claiming disability from lung diseases. From approximately 1930-1950, attorney Vandiver Brown handled involvement in such lawsuits.
During the 1960s, 70s and 80s, J-M faced thousands of individual and class action lawsuits based on asbestos-related injuries such as asbestosis, lung cancer and malignant mesothelioma. Many new settlements include offering $600 for asbestosis while the Fait Act calls for $12,000 for this condition level. As a result, Manville voluntarily filed for chapter 11 bankruptcy protection in 1982. At that time, it was the largest company in United States history to have done so. ...
The bankruptcy was resolved by the formation of the Manville Trust to pay asbestos tort claimants in an orderly fashion by giving the trust the lion's share of the equity in the company. The bankruptcy took over 5 years to process and resulted in protracted litigation. The Manville Trust is still in operation today.
The company emerged from Chapter 11 in 1988 as Manville Corporation.
vBulletin® v3.8.7, Copyright ©2000-2018, vBulletin Solutions, Inc.