Recent legal activities in a federal court in Connecticut are revealing an insidious plot by asbestos company executives to avoid paying claims to victims of malignant mesothelioma and other asbestos-related diseases. There are two parallel cases filed by the company’s bankruptcy trustee: One accuses the executives of conflicts of interest and concealing their transfer of assets, and an avoidance action trying to undo the transfers to dozens of the executives’ family members and their trusts.
Pump Company Named in Thousands of Mesothelioma Lawsuits
Both cases revolve around The Nash Engineering Company, or TNEC, an asbestos company named in tens of thousands of mesothelioma and asbestos-related disease lawsuits. The company manufactured pumps used in vacuum steam heating and sewage collection systems, as well as pulps and papers. With over 1,600 more claims pending, the company filed for Chapter 7 bankruptcy protection in October 2021.
When any company files for Chapter 7 bankruptcy, they are assigned a trustee who takes control of its assets and sells or distributes all but those that are exempt for the benefit of creditors. If assets were transferred improperly before the filing, the trustee can return them to the company, and this is the focus of one of the two lawsuits the trustee has filed against the executives. Trustee George I. Roumeliotis has accused the executives of improperly transferring $59.7 million to stockholders to avoid paying mesothelioma claims, of conflicts of interest, and of concealing their conduct.
Judge Denies Asbestos Company Execs’ Motion to Dismiss
The executives’ motion to dismiss the trustee’s claims did not deny their plan to avoid paying mesothelioma plaintiffs. Rather they argued that the case was filed too late and that they had no fiduciary duty to inform the asbestos claimants about the transfer. The judge rejected these arguments and allowed the case to move forward.
As for the avoidance action in which the trustee is trying to claw back the funds transferred to the executives’ family members and their trusts, the judge dismissed some of the trustee’s claims but kept the claim of unjust enrichment and the claim to undo the transfers. Mesothelioma victims with claims against the company are watching and waiting for the resolution of both cases.
If you or someone you love has been harmed by the actions of an asbestos company, the Patient Advocates at Mesothelioma.net can help. Contact us today at 1-800-692-8608 to learn more.
