A proposed federal bill would impose administrative responsibilities on bankruptcy asbestos trusts.
Legislation has been reintroduced in the U.S. House of Representatives that would require federal asbestos bankruptcy trusts to produce and make public voluminous, private claims filed by workers or their families seeking partial financial compensation for injury and death from asbestos exposure caused by the entities that created the bankruptcy trusts.
Affected workers were commonly exposed in industries like automotive repair, shipbuilding, construction, oil, manufacturing, mining and more. Asbestos related diseases such as mesothelioma, lung cancer, other cancers, and asbestosis take decades to develop and are typically fatal.
The Proposed FACT Act and Asbestos Bankruptcy Trusts
The so-called Furthering Asbestos Claim Transparency Act, known as the FACT Act, was introduced in the current session of Congress on January 26, 2015. In the last session of Congress, the bill passed the House, but stalled in the U.S. Senate.
When a company with asbestos claims liability files for Chapter 11 bankruptcy (referring to Chapter 11 of the U.S. Bankruptcy Code), the company's liabilities and debts are restructured under a plan that the bankruptcy judge must approve. Part of the plan can include the creation of asbestos trusts to provide for settlement and payment of claims to present and future victims of asbestos-related disease caused in part by their exposure from the company's asbestos-containing products or conduct. These trusts typically pay only cents on the dollar.
In this way, such a company can continue to carry on business and all asbestos claims against it must be funneled to and handled by the trust.
This so-called the Furthering Asbestos Claim Transparency Act (FACT Act) does two things:
- Requires the private asbestos bankruptcy trust funds to reveal on a public website detailed personal and private information about all of the asbestos victims and family members who make a claim against the trust after the bill is enacted.
This information would include partial Social Security numbers, work and asbestos exposure history, and medical diagnoses.
- Provides non-bankrupt asbestos company defendants with access to any and all documents they request of the private asbestos trust funds.
This would include all information asbestos victims and their families have provided to the trusts in order to make a claim. This applies to all claims, regardless of when the claim was made.
The bill was written by corporate lobbyists for asbestos companies - the very same asbestos companies that caused an epidemic of asbestosis, lung cancer, and mesothelioma all over the United States. These asbestos companies have told Congress that claims for compensation from the private asbestos trust funds are a fraud, despite the fact that the Government Accountability Office has investigated these trusts and found that there is no evidence of fraud whatsoever. The FACT Act is a solution in search of a problem. There is no need for so called transparency, because there is no fraud, and asbestos defendants involved in lawsuits are already entitled to obtain this information when legitimately necessary. These asbestos companies have told Congress that victims are double-dipping, when in fact the undisputed medical science demonstrates that all of a worker's exposures contributed to cause his disease, and each defendant or trust only ends of paying a small portion of the damages. In fact, no victim is double-dipping, and most receive far less in total than 100 percent of their damages.
Bottom line: The asbestos companies behind this bill want personal information to be made public to discourage victims from holding them accountable, but they want to keep their corporate wrongdoing secret as they have for almost a century. This is the ultimate insult to families whose loved ones have died or are dying from asbestos-related diseases.
This bill has been strongly opposed by asbestos victims, their families, and organizations like the Asbestos Disease Awareness Organization (ADAO). But to this date, Congress has refused to allow asbestos victims to testify about their concerns with the bill.
As of February 12, 2015, the bill is being considered by the House Committee on the Judiciary's Subcommittee on Regulatory Reform, Commercial and Antitrust Law. Victims' advocates will watch this proposal with keen interest.
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