Several companies involved with asbestos manufacturing and products have filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code (reorganizations) in recent years. When a company files for bankruptcy, actions against it are suspended pending a decision by the Bankruptcy Court, which must approve a plan of reorganization.
The reorganization plan must be submitted to creditors and to the court. Most companies set up settlement trusts as part of the plan. These are trusts that are organized to process, liquidate and pay all valid asbestos personal injury claims according to procedures approved by the bankruptcy court. Asbestos claimants, including future claimants, file claims against the settlement trust rather than against the company declaring bankruptcy.
Monies may not be disbursed to claimants until the court approves a bankruptcy plan. The large number of asbestos claims, some of which pose complex medical issues, often causes the bankruptcy process to take from several months to several years.
Claimants should be aware that the medical and asbestos exposure requirements vary for each settlement trust. Approved claims are paid based on the current payment percentage at that time. Typically, the trusts determine the settlement value of the claim, then apply a payment percentage which is only a fraction of the total value of the claim. Most trusts now pay from 5% to 15% of a claim’s value.
A trust will not contact doctors for additional information nor will it assist claimants with determining product exposure information. Therefore, it is very helpful to have an experienced attorney handle the details of an asbestos claim. Contact an experienced attorney today.