Mesothelioma and Asbestos Trust Funds

Companies that have been negligent in exposing their workers to asbestos are in a position to be sued by those former employees who developed mesothelioma and other illnesses. Plaintiffs in these cases have likely acquired huge medical bills and face shortened lives as a result of that negligence. They have valid reasons and arguments to be entitled to receive compensation from their employers. Many of these employers, though, have filed for bankruptcy, which usually makes recovering compensation challenging.

Filing for bankruptcy and reorganizing under the bankruptcy laws protects a company from being sued by a former employee. This is a strategy for a company to avoid lengthy and costly lawsuits, but it still comes at a price. Asbestos companies that make the move to reorganize have to set aside money that will pay current and future claims, and the courts must approve the amount to ensure it will be enough. These are the asbestos trust funds and they hold the money that injured workers need and have a right to claim.

For a company that has exposed workers to asbestos to file for bankruptcy and reorganize under the law, the process has several steps. First it must submit plans to the court for reorganization, including plans for setting up an asbestos trust fund. The court holds proceedings so that the company and the plaintiffs’ representatives can weigh in. The proceedings are much like litigation in which each side can argue its case and present evidence for how much money should be involved in a trust fund.

Both sides must then estimate how much money is needed in a trust fund to pay all claims now and those that may arise in the future. Because mesothelioma is often not diagnosed in workers until decades after the exposure occurred, estimating future needs is an important part of the process. The judge listens to arguments and either approves the reorganization or sends the company back to the beginning to try again.