Asbestos trust funds were created to help victims of asbestos exposure receive financial justice, even after the companies responsible for that exposure closed or went bankrupt. In this blog post, we’ll outline exactly how mesothelioma trust funds work.
How Asbestos Trust Funds Started
Mesothelioma trust funds were ordered by the federal courts after numerous companies exposed workers to asbestos and then filed bankruptcy to avoid impending lawsuits and responsibility for their negligence.
In fact, some companies’ behavior was downright criminal.
One of the first mesothelioma trust funds came from the John-Mansville Corporation, a company that knowingly hid asbestosis diagnoses from its employees during routine medical exams in the 1960s.
By the 1980s, litigation against John-Mansville had piled up, and the company filed for Chapter 11 bankruptcy. A few years later, the Manville Personal Injury Settlement Trust was created to compensate victims of John-Mansville Corporation’s devastating treatment of employees.
Unfortunately, trust funds often pay significantly less than a successful lawsuit would have, essentially giving John-Mansville yet another opportunity to exploit their workers.
Asbestos Companies Filed Bankruptcy
But John-Mansville Corporation was not alone. Companies across the United States had knowingly exposed their workers to asbestos, despite being warned about the health risks. One by one, these companies began to fold under the pressure of costly lawsuits.
Chapter 11 bankruptcy was an attractive option for these companies, as no future lawsuits can be filed against a bankrupt company, yet the “bankrupt” company can shuffle funds around and ultimately stay in business.
Numerous asbestos-related companies that willingly endangered workers filed Chapter 11 claims to escape existing and future lawsuits and were forced to create mesothelioma trust funds as part of their claim.
To date, over $30 Billion has been set aside across over a hundred trust funds to help mesothelioma victims and their family members receive compensation for their medical costs and suffering.
Who Determines Trust Fund Payouts?
Mesothelioma trust funds are managed by trustees, who are responsible for reviewing claims and determining the payouts. Trustees are expected to make the trust last as long as possible, to help pay out victims who have yet to receive a mesothelioma diagnosis.
Because mesothelioma takes 10-50 years to develop, people who worked at companies that shut down may still develop mesothelioma or other asbestos-related diseases in the years to come. It’s a trustee’s job to take financial care of the fund and ensure that money is available for as many of those people as possible.
Trusts can be invested, allowing the money to generate future returns, and those returns are subject to taxes. Trustees will keep the trusts profitable, take care of the tax returns and otherwise ensure the trust remains healthy for as long as possible. However, mesothelioma is an expensive disease to treat and not all trusts can afford to adequately compensate victims.
Managing Limited Asbestos Trust Funds
Despite trust funds totaling billions of dollars, there isn’t enough money in trusts to take care of all the victims. In fact, many trusts have been depleted, leaving nothing for future victims (while some of the companies that created the trusts continue to profit).
Trustees try to manage the limited funds by determining a “fair” Trust Payment Percentage, giving anywhere between 1% to 100% of the claimed amount. In many cases, trusts pay out less than half the requested claim, failing to cover the cost of medical bills.
Working with an attorney who is experienced in mesothelioma trust funds is one of the best ways to ensure you get the maximum payment possible.
Accessing Asbestos Trust Funds
People who have been diagnosed with mesothelioma, as well as their loved ones, may be entitled to some of the money contained in one or more trust funds.
Victims with mesothelioma or other asbestos-related conditions are expected to file a claim and prove that the guilty company’s actions negatively impacted their health. Each trust fund has its own set of guidelines for accessing the trusts.
Numerous mesothelioma support networks have been created to help victims navigate trust funds and other legal avenues for receiving compensation. If you are considering your options, contact the Justice Support Team today. Or, request a FREE Mesothelioma Justice Guide to help you understand your legal options.