If you've been exposed to asbestos

Legal action

Bankruptcy of asbestos companies?

There has recently been much public concern that legal actions taken against asbestos companies have resulted in bankruptcy amongst many of them, and that these bankruptcies have had an adverse effect on the economy in the USA.

In fact, these 'Chapter 11' asbestos bankruptcies rarely result in closure of the company involved. They differ from Chapter 7 liquidations in that they are actually reorganizations that allow the companies to continue trading (during which they have typically remained competitive and flourished afterwards). Furthermore, Chapter 11 asbestos bankruptcies allow companies to seek bankruptcy protection from future liability if they can prove that such liability is likely to exceed the company's assets; they are therefore often the preferred option. The company must set up a special asbestos bankruptcy trust, but it is also allowed to seek injunctions to prevent all asbestos litigations from moving forward until it has reorganized and prioritized payments.

US Senate Majority Leader Bill Frist recently promoted a bill designed to protect asbestos companies from lawsuits brought by the asbestos-exposed and to set up a special fund to take care of asbestos victims 'once and for all' -- a difficult task given that the proposed trust would have had very inadequate funds and that asbestos-related diseases may not become apparent for 50 or more years. Fortunately the bill was defeated on April 22nd 2004.

Asbestos-exposed workers are continuing to bring successful lawsuits against the companies that have wronged them.