Some companies facing substantial asbestos liabilities reorganized through bankruptcy and established trusts to address eligible present and future asbestos claims. A trust claim is an administrative process governed by that trust's documents; it is not the same as filing a lawsuit against an operating company.
Why trusts exist
Section 524(g) of the U.S. Bankruptcy Code provides a framework under which qualifying asbestos liabilities may be directed to a trust established through a confirmed reorganization plan. The trust assumes responsibility for evaluating and paying claims within its rules and available assets.
Eligibility is trust-specific
Each trust establishes its own:
- Covered companies, products, worksites or occupations
- Medical and exposure criteria
- Documentation requirements
- Claim-review procedures
- scheduled values and payment percentages
- Statutes, limitations or filing provisions
- Releases and audit rules
Eligibility for one trust does not establish eligibility for another.
General claim process
Identify a possible trust connection
Exposure investigation may identify a reorganized company, product or location covered by a trust.
Collect evidence
The claimant may need medical documentation, work or service history, product or site evidence and sworn statements. The trust's current procedures control.
Select a review path
Some trusts offer expedited and individual review. Expedited review may use defined criteria and scheduled values; individual review may consider additional circumstances but can require more evidence and time.
Trust decision and payment
A trust may approve, defer, deny or request more information. Approved values may be multiplied by a payment percentage intended to preserve assets for future claimants. Figures can change and should never be quoted without current trust documents.
Trust claims and lawsuits
State law, court orders and trust rules may require disclosure of trust claims in litigation. Trust payments may affect other recoveries through setoffs, credits, releases or coordination rules. Timing decisions can have legal consequences.
Avoid misleading promises
No website should promise a trust payment, list a universal “average” amount or imply that applying is automatic. The correct trusts and evidence depend on the person's history.
Questions for an attorney
- Which trusts may be connected to the documented exposure?
- What current trust procedures apply?
- How could trust filings affect a lawsuit?
- What information will be shared among courts, defendants and trusts?
- How are legal fees and claim expenses calculated?
- Who will verify the claim before submission?
Sources
- 11 U.S.C. § 524(g), available through the U.S. House Office of the Law Revision Counsel.
- U.S. Department of Justice. Statement concerning an asbestos trust proposal.
- United States Courts. Asbestos Bankruptcy Trusts and § 524(g).
Legal review: [Add only after completed attorney review]