Mesothelioma trust funds provide compensation for asbestos victims and their families. Many negligent asbestos companies established trust funds after going bankrupt. They created asbestos trusts to pay out current and future claims. More than $30 billion is set aside across more than 65 trust funds.
What Is a Mesothelioma Trust Fund?
Mesothelioma trust funds are large amounts of money set aside by asbestos companies to handle asbestos claims. Eligible patients and loved ones can file a claim against the trust to receive compensation.
During the past few decades, asbestos companies have faced thousands of claims resulting in large settlements and jury awards from mesothelioma lawsuits. In an attempt to limit the amount of money they would have to pay to mesothelioma victims, many of these companies reorganized under Chapter 11 bankruptcy protection. This forced companies to create trust funds to compensate then-current and future victims who had been exposed to their products. These trust funds are referred to as asbestos trust funds, mesothelioma trusts funds or asbestos bankruptcy trust funds.
Asbestos use was popular until the late 1970s, when its dangers became well known. Many asbestos companies were aware of health risks but continued to use asbestos. Asbestos companies are not only the businesses mining and producing the asbestos mineral, but also the facilities using asbestos to produce asbestos-containing materials.
Thousands of people have been exposed to asbestos and are at risk of developing diseases, such as mesothelioma. People are exposed to asbestos in the following ways:
The number of asbestos-related diagnoses grows each year. Victims continue to seek compensation from the companies responsible for wrongful asbestos exposure. Compensation from these trust funds can help victims with treatment costs and lost income.
Why Were Asbestos Trusts Created?
Asbestos trusts were created to provide compensation to victims of exposure and their loved ones. Trust funds provided companies with a way to handle multiple asbestos claims, as well as future claims.
Many companies filed for bankruptcy in an attempt to reduce or eliminate their liability. Some had no other option as they lost any profit to paying out asbestos claims. Asbestos companies filed for two types of bankruptcy: Chapter 11 or Chapter 7.
Companies filing for Chapter 11 bankruptcy must reorganize. Reorganization protects the companies against mesothelioma lawsuits. Instead, their trust funds handle all claims.
The companies must present a business plan in court, including an estimate of initial funding for the trust. A judge approves or denies the plan for reorganization and appoints a trustee. The trustee is responsible for trust valuation.
Mesothelioma Fund Eligibility Requirements
Trust fund eligibility requirements limit the number of individuals that can file a claim. They also help determine compensation amounts.
Common criteria typically include documented proof of exposure and validation of an asbestos-related diagnosis. Although most trust funds have the same eligibility requirements, some have additional criteria.
Mesothelioma patients and their loved ones should work with an experienced asbestos attorney to determine which trust fund to file against, as well as eligibility requirements. Asbestos law firms have experience handling mesothelioma claims. They can help ensure claimants receive adequate compensation as quickly as possible.
How Much Is the Average Asbestos Trust Fund Payout?
The amount of compensation a claimant receives from a trust fund varies. Factors that may influence the payout amount include:
- Type of asbestos diagnosis
- Initial payment schedule of the trust fund
- Current payment percentage
Asbestos trust fund settlements from higher-paying trusts can exceed $125,000. Currently, the highest paying trusts are:
- Pittsburgh Corning
- Harbison-Walker Refractories Company
- W.R. Grace
- U.S. Gypsum Company
- Owens Corning
- Western MacArthur
Ultimately, claimants should discuss payout amounts with their lawyer. Attorneys will take multiple factors into account to provide an estimate for a claimant’s specific case.
How Much Money Is Left in Asbestos Trust Funds?
The amount of money in a trust fund varies by company. Companies have to ensure their trusts have enough money to pay present and future claims.
Each trust fund has a payment schedule to ensure continued payouts. Schedules are typically based on a percentage of what the claimant is entitled to and are subject to change over time. This percentage is referred to as an asbestos trust payment percentage. For example, if a patient or loved one is entitled to $100,000, a trust fund with a 30% payment percentage would pay $30,000.
The payment percentage can increase or decrease based on the number of claims the trust has budgeted for versus how many claims they actually receive over a certain period of time. This is one reason it is important for victims to file a claim with any applicable trusts as soon as possible.
- If a payment percentage increases, claimants previously paid at a lower percentage will receive an additional payment for the difference.
- If a payment percentage decreases, claimants previously paid at a higher percentage will keep the full payment amount.
Asbestos victims may be concerned trust funds will run out of money and stop making payments. This concern arises from the following circumstances:
- Companies are no longer in business
- Bankruptcy proceedings based initial funding amounts on estimates that were too low
- Some companies put as little money into their trust funds as possible
- The number of asbestos victims and trust claims continues to increase
One example of an underfunded trust is the Johns-Manville Trust. The trust began with $2.5 billion but has had to stop payments twice. Payout percentages have also been dramatically reduced to continue making payments to claimants.
Mesothelioma lawyers have experience negotiating with trusts and can help ensure victims receive the highest compensation possible.