Asbestos trusts have long been a lifeline for mesothelioma victims diagnosed years after the companies responsible for their illnesses have filed for bankruptcy, but a ruling by a bankruptcy court has led people sickened by Revlon’s talc products to file an appeal to a federal appeals court. Forty-two claimants diagnosed with asbestos-related diseases after the company’s 2022 bankruptcy filing asked the Second Circuit to reverse a ruling that time-barred their compensation claims. The victims argue that bankruptcy law and precedent should require asbestos trust funds to allow future claims since the disease can emerge decades after exposure.
Court Asked to Reverse Decision Based on Trust Fund Precedent for Mesothelioma Victims
The question before the Second Circuit is whether Revlon’s reorganization should follow the same pattern as dozens of previously established asbestos trust funds, which allow payments to mesothelioma claimants whose illnesses emerge years later, long after the companies’ bankruptcy cases have concluded. The fundamental question arose after the bankruptcy court ruled that the plaintiffs’ claims against the company had been time-barred. The parties also disputed whether the claimants had received sufficient notice of Revlon’s claims deadline.
As is typical of people diagnosed with mesothelioma and other asbestos-related diseases, the claimants filing the appeal were diagnosed after Revlon filed for bankruptcy protection. They had submitted claims after the case’s claims deadline and now are arguing that bankruptcy law should require companies with asbestos liability to establish trust funds without deadlines, to allow for future claims. Their argument rests on Section 524(g) of the Bankruptcy Code, which outlines rules for establishing trust funds to pay future mesothelioma and asbestos claims without time limits—recognizing that these illnesses may emerge decades after initial asbestos exposure.
Trust Fund Framework Stems from Johns Manville Precedent in Mesothelioma Claims
The asbestos victims’ argument refers to the first trust established to pay future asbestos claims. Facing overwhelming liability from workers exposed to its asbestos products, the company filed for bankruptcy protection in 1982 and established the Manville Trust under Section 524(g), This created the template for dozens of subsequent asbestos bankruptcy trusts that continue compensating mesothelioma victims today.
Section 524(g) allows debtors to channel future asbestos claims to trusts funded by company assets. This protects reorganized companies from litigation while ensuring compensation for victims whose diseases haven’t yet manifested. Revlon’s attorneys argued that Section 524(g) trust provisions are optional, noting that bankruptcy courts have approved previous plans that included claims deadlines for asbestos cases. The court’s decision is pending.
If you or someone you love has been diagnosed with mesothelioma or another asbestos-related disease, you need someone to guide you through the challenges that lie ahead. Contact the Patient Advocates at Mesothelioma.net at 1-800-692-8608 to learn how we can help.
