01. Development of Trust Funds
Development of Asbestos Trust Funds
After the link was discovered between asbestos exposure and several deadly diseases in the 1960s, companies that mined asbestos and produced asbestos-containing materials started to face a series of lawsuits for personal injury claims and wrongful death claims.
Through environmental exposure, use of asbestos products, occupational exposure and secondary exposure, diagnoses of mesothelioma and other asbestos cancers have continued to rise.
Many asbestos companies couldn’t pay out the settlements and jury awards that emerged from these lawsuits and filed bankruptcy in an attempt to reduce or eliminate their liability. In many cases, they were forced to set up asbestos trust funds with ample compensation set aside to pay out current and future claims.
Since the first asbestos-related bankruptcies filed by Johns-Manville Corporation and UNR Industries, an estimated 100 other asbestos companies have since gone on to file for Chapter 11 reorganization. Not all of these companies have established trusts, as some company reorganizations were not approved, and other companies were ultimately forced to file Chapter 7 bankruptcy instead, which required a liquidation of their assets to pay debtors.
How Asbestos Trust Funds Work
Asbestos bankruptcy trusts established under section 524(g) are set up to pay mesothelioma claims quickly with as little overhead cost as possible. Some trusts use centralized claims processing partners to help manage the significant amount of claims that come in, which number into the thousands. Some of the largest trusts are managed by such centralized processing, making it easier for victims to receive the mesothelioma compensation they are entitled to.
Claim Eligibility
To file a claim with a trust, generally, you have to prove that you or your loved one were exposed at a particular worksite or that exposure resulted from a particular product. Many asbestos trusts also have established exposure and medical criteria that set a baseline for those looking to seek compensation. Specifically for mesothelioma, most trusts use the same or very similar criteria to meet the minimum level of eligibility.
Since each trust fund sets its own eligibility criteria, the best way to determine if you are eligible is to talk with a skilled mesothelioma attorney who can break down the requirements for you and explain their implications.
Trust Fund Payment Amounts
Each trust fund sets up its own schedule for making payments, typically based on a percentage of what the claimant is entitled to. For example, if a patient or loved one is listed to receive $100,000, a trust fund with a 30% payment percentage would end up paying the claimant $30,000. These percentages can change over time.
The amount of compensation that you receive will ultimately depend on a variety of factors, including eligibility. An experienced mesothelioma lawyer will be able to negotiate with the trust fund to get you the most monetary compensation possible.
Trust Fund Solvency
A common concern is that asbestos trust funds will run out of money to continue making payments, especially with many trust fund companies no longer in business. During bankruptcy proceedings, trusts were often funded based on estimates that were made too low. Companies also tried to put as little money as possible into the trust. As a result, there is concern that trusts will not fund the number of emerging mesothelioma cases.
One example of an underfunded trust is the Johns-Manville Trust, which started out with $2.5 billion to pay victims of asbestos exposure. Since its creation, the trust has had to stop payments twice, and the current payout percentage has been reduced to 4.3%.
Regardless of how much money asbestos trusts start with, they’re typically required to stretch their funds out to pay something towards future claims. However, this can lead them to make very small payments now to maintain payments in the future, further stressing the importance of a qualified mesothelioma lawyer to fight your case.
Resources for Mesothelioma Patients
02. List of Trust Funds
List of Asbestos Trust Funds
Below is a comprehensive list of asbestos trust funds, including the year that they were created, if known, and the initial funding that was put into the account upon creation.
03. Claim Process
Trust Claim Legal Process
Asbestos trust funds are set up with the intent to lessen the burden put on asbestos victims. The process for recovering compensation from a trust fund is generally much easier than through a mesothelioma lawsuit. However, there are steps that still need to be followed to properly file a claim and recover funds.
Step 1: Understand Trust Fund Criteria
Trust funds each have their own established criteria that claimants must meet before they can file a claim. This criteria is often published on a public website for mesothelioma patients or family members and lawyers to easily review as they prepare their case. Common trust fund criteria for establishing a mesothelioma claim include:
- Date(s) of asbestos exposure
- Workplace(s) where exposure occurred
- Diagnosis of mesothelioma or another asbestos-related illness
- Information about asbestos-containing products or materials that led to exposure
Other criteria may apply to trust funds, and a lawyer can best identify what requirements need to be met for a given fund.
Step 2: Gather Evidence
Your mesothelioma lawyer will help you gather all evidence needed to establish your case. If you’ve already prepared a lawsuit, much of the evidence previously gathered will likely be used for the trust fund claim. Evidence may include:
- Employment records
- Military service records
- Union membership records
- Medical records including diagnosis
- Witness testimony or affidavits
Step 3: Filing a Trust Claim
After sufficient evidence has been gathered, a claim will need to be filed with the trust fund. Depending on the asbestos trust fund, this can be done by sending paper documentation or by uploading your forms and documentation through an online website.
Your asbestos attorney will be able to lessen this burden by filing the claim on your behalf. They will also be able to check over all of your documentation and verify the evidence to make the process move as quickly and smoothly as possible.
Step 4: Trust Claim Reviews
After your claim has been filed, the trust fund administrators will review everything submitted. The review can take one of three forms, including an expedited review, individual review or extraordinary review. Your lawyer will be able to advise what review is best for you and work with the trust to ensure the proper review takes place.
- Expedited Review: If the claimant meets all of the trust fund’s established criteria, such as medical diagnosis and worksite requirements, the claim will be eligible for expedited review. This means that the claim will be paid out according to the fixed payout schedule established by the trust fund.
- Individual Review: If the claimant does not meet the requirements for an expedited review, the claim will be reviewed individually. This process is slower, but it also may result in a much higher claim payout.
- Extraordinary Review: In certain special circumstances, a claimant can receive more money through an expedited claim. This may involve situations where a claimant meets a particular set of employment criteria, such as having been employed by a single company for several decades.
Step 5: Claim Liquidation and Payment
Your claim must be validated before you can receive financial compensation. Once validated, money to pay the claim will be liquidated, meaning the payment amount will be determined and assigned to the claim. Your lawyer will negotiate with the trust fund to determine the amount of money to be paid, and after a successful negotiation, the trust fund will pay you, the claimant.
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Don't lose your rights, request a free case evaluation now!04. Trust Fund Laws
Mesothelioma Trust Fund Laws
The type of bankruptcy that an asbestos company filed for determined whether or not they were able to set up trust funds. Chapter 11 bankruptcy (under section 524(g)) allowed personal injury trust funds to be established as part of a company reorganization. Companies that filed for Chapter 7 bankruptcy were not able to set up trust funds, as all of their assets were sold to pay debtors.
Legal establishment of an asbestos trust fund can take years. The bankruptcy process is lengthy and complicated, often spanning across several years as companies file and put together a reorganization plan. Asbestos trust funds are established during the reorganization plan, which is confirmed by the bankruptcy court. During court, there are many hearings and procedural motions to determine the initial amount of the fund and how it will be established.
Applicable State Laws
Trust funds are established under United States federal law, so state laws typically don’t apply to them. Trusts therefore typically aren’t subject to the same deadlines and statutes of limitations that lawsuits are. Asbestos trust fund deadlines depend on a variety of factors, and as a result, many people end up seeking compensation through a lawsuit before submitting claims to a trust.
A mesothelioma attorney can help you understand what deadlines need to be taken into consideration and can also help you determine what route is best for you to recover compensation.
Trust Fund Privacy
Most trust funds provide a confidentiality clause that guarantees the privacy of claimants who receive money from the trust. This is important to ensure mesothelioma victims and their families who receive trust payments will not be unfairly targeted by those who might want to take advantage of them. In general, the only time a trust fund will provide information about trust claim payments is with the claimant’s express permission, or if necessary, according to a subpoena reviewed by a judge.
Trust Funds and the FACT Act
Recently there has been a legislative attempt to undermine many of the privacy considerations that trust funds have made through confidentiality clauses. The Furthering Asbestos Claim Transparency (FACT) Act, which has been introduced into various bills in the U.S. Congress for several years now, is an attempt to expose the identities of asbestos victims for “transparency” based on a set of claims made by asbestos industry lobbyists.
If passed, the FACT Act would delay or deny compensation to asbestos victims and their families. For those who do receive compensation through trust funds, the act would require disclosure of important information including:
- Names
- Medical records
- Partial social security numbers
The release of this personal information would leave claimants open to being further victimized through potential identity theft, not to mention the possible harassment of asbestos companies and their lawyers, who would then have access to a large list of individuals who have received compensation because of asbestos exposure.
A mesothelioma law firm with experience handling these claims can best advise on the advantages and disadvantages of asbestos trust funds, while also answering any questions or concerns that you might have about your legal options.
