Since the first major bankruptcy filing by Johns-Manville Corp., in 1982, more than 90 companies that either made or installed asbestos insulation or that sold or used products containing asbestos have filed for bankruptcy *1. In April 2010 Durabla Manufacturing, a Pennsylvania company that made sealing products, collapsed under the weight of 108,000 asbestos suits. And Just this year, both State Insulation Corp. and United Gilsonite Laboraties have also filed for bankruptcy.
When a company files for bankruptcy, a “trustee” is appointed by the bankruptcy court. The trustee takes an inventory of the funds and assets belonging to the company and assesses the company’s “creditors,” that is, the individuals or companies to whom the bankrupt company may owe money. The bankruptcy court, with the help of the trustee, develops “claims administration procedures” to try to equitably pay each class of creditors. Once these procedures have been set up, the creditors typically must submit their claims (called a “proof of claim”) for approval for payment according to the procedures established by the court. Claims are submitted, either manually or electronically, with the requisite documentation. Both proof of an asbestos related illness and proof of exposure is required. You must specify if you wish for an expedited review or individual review of the claim.
- Expedited Review is the more time efficient process in which a claim is reviewed solely to determine medical level, as defined by the trust, and verified company exposure. The value of the claim is determined solely by the medical level proven.
- Individual Review is an option for claims that may entail extenuating circumstances. In addition to the standard medical and exposure documents, a claimant may submit additional medical reports, dependent, smoking, and hardship information. This claim with the additional details is reviewed with more specificity and is assigned a value by the reviewer.
Once the submission is reviewed and all the requirements of the trust are met, an offer is made and a release is generated. Should the claimant choose to accept the offer, he/she must execute the release and return it to the trust. The trust then verifies that it has been correctly executed and will then process that claim for payment. If the claimants believes that the trust should have approved the claim for a greater amount, he/she has the option of providing additional information and requesting a re-review of the claim. However, the only manner in which to obtain funds from the bankrupt company is to process your claim within the guidelines of the trust.
When a company files for bankruptcy, you can generally no longer sue them in court. Even if you have already filed suit against the defendant, your lawsuit against that defendant is “stayed” (put on hold) pending the resolution of the bankruptcy proceedings. Should the company reorganize, that company is usually protected from any claim / lawsuit against the original company. Federal law prohibits asbestos-related lawsuits against the reorganized company or the trust.
Along with the number of bankrupt companies, the number of asbestos claims are steadily increasing, and they are not all based on dire circumstances of terminal illness. While mesothelioma, lung cancer and other asbestos related malignancies develop in thousands of people each year who have been exposed to asbestos, The majority of claims are for a non-malignant condition: Asbestosis and Pleural Disease.
With the steadily increasing number of claims, the monies held in trust to compensate claimants is steadily decreasing. The payment percentage, or the percentage of the liquidated claim value that the trust has determined it is capable of paying, is also steadily decreasing. Annually, the trust may re-analyze the number of claims it anticipates receiving, the estimated value of those claims and what percentage of that total amount the trust is capable of paying. This decrease in the financial ability of the trust to pay the escalating number of claims is one of the main reasons why if you or a loved one has been diagnosed with an asbestos related disease, it is imperative that you learn your rights and file now.
If you or a loved one have been diagnosed with an asbestos related illness let us help you protect your rights. You may be eligible to receive compensation from the manufacturers of asbestos-containing products. Our dedicated lawyers at Reyes, O’Shea and Coloca fight for the rights of these individuals who were unknowingly put at risk because of their exposure to asbestos. Each case is handled individually and given the attention and priority it deserves by our carefully trained legal team.
*1 Bankruptcy List.xlsx Compiled by Reyes, O’Shea & Coloca P.A.