Wallace & Graham, P.A.
Helping Asbestos & Mesothelioma Victims Nationwide
Call For A Free Consultation 888-698-9975
To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options.

Understanding asbestos trust funds

Over the course of six decades of litigation in North Carolina and elsewhere involving the health hazards of asbestos, many companies have elected to seek protection from such claims under the federal Bankruptcy Act. A bankruptcy proceeding proved to be an effective method of controlling an asbestos company's legal exposure for damages, but claimants were often left short-changed or even empty-handed even when they had compelling claims for damages.

In 1994, Congress attempted to create a compromise solution based upon the outcome of the bankruptcy proceeding commenced by Johns-Manville Company. Under Section 524(g) of the Bankruptcy Code, a company facing numerous tort claims based upon asbestos product exposure can create an asbestos trust fund to receive and pay claims. Each trust fund must establish Trust Distribution Procedures ("TDPs") that are appropriate for the company in question. If the bankruptcy court approves the amount of money that will be committed to the fund, and approves the proposed TDPs, all asbestos claims against that company are assigned to the trust fund, and no independent claims can be made in any other court. The company is legally discharged from all future liability for asbestos claims.

In the twenty years since Section 524(g) was passed, asbestos trusts have paid out billions of dollars to claimants. To receive a distribution, a claimant must demonstrate only that he or she meets the TDP's exposure and medical criteria established for the company in question. A person who satisfies these tests is then paid a prescribed amount from the trust assets. Independent claims for damages caused by exposure to asbestos-containing products manufactured by companies that have not filed bankruptcy are still allowed.

Anyone who has become ill or lost a loved one because of exposure to asbestos-containing products will benefit from consulting an attorney who specializes in handling asbestos claims. Such a consultation can provide a helpful evaluation of the case. In addition, an attorney can help to identify companies that may be liable and provide an estimate of the likelihood of recovering damages from any asbestos trust fund or solvent company whose products may be at fault.

Source: American Bar Association, "Bankruptcy Trusts and Asbestos Litigation," Lee Blanton Ziffer, June 11, 2012, accessed on Dec. 8, 2015

No Comments

Leave a comment
Comment Information

No Matter Where You Are, We're Here For You

Based in North Carolina, Wallace & Graham, P.A. represents clients nationwide. Call 888-698-9975, or contact us online for a free case evaluation. Our skilled and caring attorneys will explain your rights and fight for the justice you deserve.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

This site uses Google's Invisible reCAPTCHA, which is subject to Google's Privacy Policy and Terms of Use.

The Law Offices of Wallace & Graham

525 N. Main Street
Salisbury, NC 28144

Toll Free: 888-698-9975
Fax: 704-633-9434
Salisbury Law Office Map