Yarway Corp., a manufacturing company and unit of Tyco, recently filed for bankruptcy due to overwhelming asbestos liability. A judge approved its plan to pay $325 to a trust that will compensate thousands of current and future asbestos injury claims. Asbestos exposure attorneys at Pintas & Mullins explain what an asbestos trust is and how victims can apply for compensation.
After two years of negotiations, Yarway agreed to contribute all its available money to the asbestos trust after filing for Chapter 11 bankruptcy. Yarway’s parent company, Tyco, agreed to fund the remainder of the trust to total $325 million.
Yarway was established in Pennsylvania in 1908 under the name Simplex Engineering. In 1986 it was purchased by Keystone International, which Tyco acquired in 1997. The asbestos exposure claims are from various products Yarway made, sold or distributed between the 1920s and 1970s, including control valves, steam traps and gauges.
Although the company stopped using asbestos entirely in 1988, decades of asbestos-related injury lawsuits depleted its resources. In the five years between 2008 and 2013, Yarway was hit with another 10,000 asbestos claims, costing it over $182 million in legal fees.
What is an Asbestos Trust?
Companies that mined, manufactured, distributed, or sold asbestos-containing products in the past face massive liability for asbestos-related injuries today. Due to this immense legal responsibility to pay injured claimants, many have gone bankrupt.
Under the Chapter 11 Bankruptcy Code, the government established the Gypsum Asbestos Personal Injury Settlement Trust (gypsum is another type of toxic mineral). This Trust is intended to pay all valid asbestos personal injury claims against these companies that declare bankruptcy. More information on this Trust can be found here, on its website.
There is currently approximately $30 billion in U.S. asbestos trusts. When someone is diagnosed with an asbestos-related disease – mesothelioma, asbestosis, lung cancer, gastrointestinal cancer, etc. – they may sue the companies responsible for their exposure. If the company or companies responsible have filed for bankruptcy, the injured person would file a claim with its asbestos trust. All trusts are managed by trustees, who determine the amount of compensation paid to each claimant.
Most trusts have categories of disease types that determine how much the claimant receives. For example, patients diagnosed with mesothelioma would be in a different category than those with asbestosis, since asbestosis is not a fatal ailment and mesothelioma is extraordinarily fatal. Claimants must show medical evidence of their asbestos-related diagnoses as well as evidence regarding their exposure to be eligible.
Many patients were exposed to asbestos at more than one site, which may result in an asbestos lawsuit against a non-bankrupt company. Each state has its own laws on how patients file trust claims versus an asbestos lawsuit. It is critically important to hire an experienced asbestos exposure attorney who can help guide you through this process.
In 2008 alone, asbestos funds paid about $3.3 billion to victims and families. This compensation is meant to pay for past, current and future medical care, loss of quality of life, lost wages, pain and suffering, loss of a loved one, and funeral expenses. As mentioned, another $30 billion is available for patients and families.
It is important to note that these trusts are only established for companies that declare bankruptcy. There are many more companies that exposed people to asbestos that are still in operation. If the company responsible for exposure has not filed for Chapter 11, an injured victim should file an asbestos lawsuit.
One such asbestos suit in California recently concluded when Goodyear Tire & Rubber agreed to a settlement with the family of a man who died from mesothelioma. The man was a Navy aircraft repairman who worked with many asbestos-containing products throughout his career. After his death from mesothelioma in 2008, his wife and son sued several companies who contributed to his exposure and death.
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