Asbestos trust funds, also called mesothelioma trust funds, have an estimated $30 billion in reserve for asbestos-disease victims and their families. The amount each person collects depends on a number of factors, including the extent of illness and total amount of people making claims on the individual trusts.
To date, more than 60 companies have established trusts. From 2006 to 2012, the trusts paid out about $15 billon to asbestos victims, with the median payout amount about $180,000.
All trusts have “presumptive medical and exposure criteria” to determine if a claim qualifies for a payment.
Making a claim on a trust can be a detailed process because each company may have different standards and requirements. Overall, however, each company follows the same general guidelines. Many people make claims on multiple companies.
Asbestos companies and manufacturers do not run the trust funds that were established in their names. Boards of trustees oversee the accounts and manage the trusts.
The individual trustees on the boards, who are appointed by the bankruptcy judges, review the claims and calculate the amount of payments based on predetermined schedules.
Trust funds started in the 1980s when companies with significant asbestos-related liabilities began filing for bankruptcy protection from creditors.
These companies used section 524(g) of the Chapter 11 U.S. bankruptcy code to reorganize and establish trusts to pay current and future asbestos claims.
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Asbestos trusts assign financial value to the diseases and levels of illnesses. Mesothelioma patients usually receive the highest level of financial compensation from trust funds due to the disease severity.
Since there are usually large amounts of people making claims to the individual trusts, many trusts are woefully underfunded and must stretch the funds to meet needs.
Because of this, trusts only pay a percentage of the amount the claimant is granted. For example, if a trust determines a claimant is entitled to $100,000 due to asbestos injuries and the trust is paying 30 percent, the claimant will receive $30,000. Each trust has a different payout percentage, ranging from 1 percent to 100 percent.
These percentages often change every few years based on the projections of future claim obligations.
It is important to note that most claimants make multiple claims on multiple trusts, due to exposure over time.
When a trust payment percentage increases, prior claimants are awarded retroactive, or “true up,” payments equal to the difference between the previous payment and the current payment.
In addition to the individual trust schedules, another factor that determines how much claimants receive from trust funds are the claims filing processes: expedited or individual.
The expedited review is a shorter process so the response is faster. There is a single, fixed payment as long as the claim meets the presumptive medical and exposure criteria. Expedited reviews are paid the payment percentage of the scheduled disease values.
The individual review requires claimants to provide more details of exposure and disease. While this type of claim can provide a bigger payment, it does take longer than an expedited review. Individual reviews can sometimes provide payments greater than the scheduled values.
Since each claim is based on individual circumstances, and each trust has different procedures, it is impossible to give specific details about claims.
For the purposes of a sample claim, we will use the trust established by Johns Manville Corp., called the Manville Personal Injury Settlement Trust. The trust is currently paying 5.1 percent. All Manville claims require exposure to have occurred before Dec. 31, 1982.
The trust has eight scheduled asbestos-related diseases, ranging in order of severity and values, as follows:
|Other Asbestos Disease
(diagnosis of a bilateral asbestos-related nonmalignant disease or an asbestos-related malignancy)
(diagnosis of a bilateral asbestos-related nonmalignant disease, among other medical requirements)
(diagnosis of asbestosis or bilateral pleural disease, among other medical requirements)
|Severe Asbestosis Disease
(diagnosis of severe asbestosis, among other medical requirements)
(diagnosis of a primary colorectal, laryngeal, esophageal, pharyngeal, or stomach cancer, plus evidence of an underlying bilateral asbestos-related nonmalignant disease, among other medical requirements)
|Lung Cancer (One) (diagnosis of primary lung cancer does not meet requirements for Manville trust fund claim)||$0|
|Lung Cancer (Two)
(diagnosis of primary lung cancer plus evidence of an underlying bilateral asbestos-related nonmalignant disease, among other medical requirements)
(diagnosis of mesothelioma)
Manville Trust also lists maximum values of claims settled by individual evaluation or arbitration (as a result of claims rejected by the trust or claimant rejection of the offer). The schedule is as follows:
|Other Asbestos Disease||$600|
|Severe Asbestosis Disease||$400,000|
|Lung Cancer (One)||$50,000|
|Lung Cancer (Two)||$400,000|
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