Bankruptcy Trusts over $30 Billion in assets
According to the General Accounting Office, (GAO) of the U.S. Congress, “asbestos litigation arose out of millions of Americans’ lengthy occupational exposure to asbestos which is linked to malignant and nonmalignant diseases. Because of the prolific use of asbestos products in hundreds of manufactured products, involving thousands of companies, to date about 100 companies have declared bankruptcy at least partially due to asbestos-related liability. In accordance with Chapter 11 and 524(g) of the federal bankruptcy code, a company may transfer its liabilities and certain assets to an asbestos personal injury trust, which is then responsible for compensating present and future claimants.
Since 1988, 60 trusts have been established to pay claims with about $30 billion in total assets remaining”.
Additionally, the bankruptcy court requires an oversite of the assets and liability payouts by a trustee (s) responsible for the maintenance of the trust funds independent of the companies who established them. The asbestos trusts are privately managed and are generally comprised of at least one or more trustees, a trust advisory committee (TAC), and a future claimants’ representative (FCR). Trustees manage the daily operations of the trusts, including managing the trusts’ investments, hiring and supervising support staff and advisers, filing taxes, and submitting annual reports to the bankruptcy court, as required by the trusts’ TA.