UNR Asbestos Trust Annual Reports, 2010–2019

UNR’s final annual report shows net claimants’ equity declining from $2.40 million to $331,880 during 2019 as the Trust completed claims operations. The financial statements recognized $1.76 million in settled claims and reported $1.91 million in cash claim payments. Operating expenses of $338,112 and claims-processing expenses of $29,103 added to the drawdown, while investment income and net gains contributed $58,298. At December 31, total assets were $363,323, accrued expenses were $31,443, and no settled but unpaid claims remained.

After reviewing the late-2018 filing surge, the Trust adopted a final payment percentage of 1.50% in May 2019. It made the last payments on valid open claims and ceased claims processing on December 31. The report also includes unaudited wind-down figures through March 31, 2020 showing $161,838 in remaining net equity after further administrative costs and liquidation of the investment portfolio. It describes arrangements to reserve funds for post-termination matters and ultimately donate any residual balance to the Mesothelioma Applied Research Foundation; those arrangements should not be read as a further claimant distribution.

UNR ended 2018 with net claimants’ equity of $2.40 million, down $1.89 million from $4.29 million. The Trust recognized $1.76 million in settled claims and paid $1.71 million in cash to claimants. Operating and claims-processing expenses totaled $319,304. Investment income of $64,643, a net investment valuation and realization loss of $35,793, and filing fees of $158,850 produced $187,700 in total additions. Claim distributions remained the principal use of the remaining fund, while administrative costs also exceeded the year’s additions.

The Trust established December 31, 2018 as the final claims-filing deadline in preparation for closure. A larger-than-expected surge in filings that December led to a temporary suspension of new offers in early 2019 while the Trust evaluated remaining valid claims and reassessed the final payment percentage. The report therefore captures the transition from ongoing distributions at the 2.12% percentage to the final claims-resolution process; the suspension and reassessment occurred after the 2018 reporting year.

UNR’s net claimants’ equity declined by $2.05 million in 2017, from $6.34 million to $4.29 million. The financial statements recognized $1.80 million in settled claims, while cash claim payments totaled $1.76 million. Operating expenses were $330,363 and claims-processing expenses were $58,008. Investment income of $73,201 was reduced by $24,917 in combined realized and unrealized losses; filing fees of $83,700 brought total additions to $131,984. Claims and expenses substantially exceeded these additions, continuing the drawdown of the Trust’s remaining assets.

The Trust continued paying Individualized Review claims under the 2.12% payment percentage and single-payment arrangement adopted in 2016. Those arrangements were intended to distribute the fund ahead of the planned termination, so the shrinking asset base was part of the reported distribution strategy. Investment income covered only a small portion of the year’s claims and administrative requirements.

UNR ended 2016 with net claimants’ equity of $6.34 million, down $2.29 million from $8.63 million. The Trust recognized $1.92 million in settled claims and paid $2.29 million in cash to claimants, with the difference reflecting payment timing. Operating expenses, investment fees and claims-processing costs totaled $441,706. Investment income of $107,003 and unrealized gains of $29,771 were largely offset by $117,766 in realized losses. Including $59,400 in filing fees, total additions were only $78,408, so claims and expenses were funded primarily from the existing asset base.

Following the short payment moratorium, the Trust increased its payment percentage from 1.38% to 2.12% in February and replaced its installment and discounted-payment options with a single payment based on the applicable percentage. The report links these changes to lower claims filings and the plan to distribute remaining funds before anticipated termination around 2019. The decline in equity therefore reflects implementation of the planned distribution strategy, as well as the limited contribution from investments.

UNR’s net claimants’ equity fell by $1.99 million in 2015, from $10.62 million to $8.63 million. Settled claims recognized in the financial statements rose to $1.70 million, and cash payments to claimants totaled $1.74 million, compared with $270,527 in 2014. Operating expenses, investment fees and claims-processing costs totaled $490,243. Investment income of $137,192 was reduced by $69,068 in realized and unrealized losses; filing fees of $131,750 brought total additions to $199,874. Claim distributions were the main driver of the reduction in the fund.

The higher payments followed the lifting of the earlier processing moratorium and the increase to a 1.38% payment percentage in late 2014. The Trust continued preparing for termination around the end of 2019 and began another short payment moratorium in December 2015 to reassess payment arrangements and the percentage. The report describes the resulting February 2016 increase to 2.12% and move to a single-payment system as subsequent steps in distributing the remaining assets before closure.

UNR ended 2014 with net claimants’ equity of $10.62 million, down $961,354 from $11.58 million. The Trust recognized $540,000 in settled claims but paid $270,527 in cash during the year, reflecting the timing of settlements and distributions. Operating expenses, investment fees and claims-processing costs totaled $567,275. Investment income of $186,276 and filing fees of $55,950 were partly offset by $96,305 in combined realized and unrealized investment losses, leaving total additions of $145,921.

The year marked a significant change in the Trust’s distribution plan. After obtaining court instruction, the trustees revised claims procedures to plan for termination around 2019, increased the payment percentage from 0.82% to 1.38% in October, and lifted the claims-processing moratorium. The revised approach sought to direct more of the remaining assets to claimants before closure, rather than reserve funds for decades of continuing administration. The year’s limited cash payouts therefore preceded the fuller implementation of that plan.

UNR’s net claimants’ equity declined by $880,139 in 2013, from $12.46 million to $11.58 million. The Trust recognized $389,313 in settled claims and paid $518,556 in cash to claimants. Operating expenses, investment fees and claims-processing costs totaled $638,092, exceeding the year’s claim-settlement charge. Investment income of $225,077 was reduced by combined realized and unrealized investment losses of $132,511; with $54,700 in filing fees, total additions were $147,266.

The low level of claims activity occurred during a processing moratorium announced in April while the trustees examined the timing and economics of closure. The report explains that continuing operations through the prior projected horizon of 2050 could consume more money in administration and processing than in claimant payments. The trustees were therefore preparing to seek court guidance on a planned termination around 2019, with the aim of distributing more of the remaining fund to claimants before closure. The lower claims payments should be read in that operational context.

UNR ended 2012 with net claimants’ equity of $12.46 million, down $1.02 million from $13.48 million. Settled claims recognized in the financial statements totaled $970,331, and cash claim payments were $962,956. Operating expenses, investment fees and claims-processing costs together totaled $424,576. Investment income of $271,849 was reduced by $183,907 in realized losses and supplemented by $161,223 in unrealized gains; filing fees added $120,900. These sources generated $370,065 in total additions, insufficient to cover claims and expenses.

Cash and cash equivalents increased to $1.28 million because investment sales and maturities exceeded new purchases, even as total net equity declined. The report also describes court-approved changes to investment guidelines and continued consideration of the Trust’s eventual termination as claims activity and the remaining fund diminished. The improved cash balance thus reflected conversion of investments into cash, rather than growth in overall resources.

UNR’s net claimants’ equity fell by $1.16 million in 2011, from $14.64 million to $13.48 million. The financial statements recognized $1.02 million in settled claims, while cash payments to claimants totaled $1.23 million. Operating and claims-processing expenses were $445,583 and $111,350, respectively. Net investment income of $310,383, filing fees of $117,400 and a $106,886 ROHN stock recovery helped fund these outflows, although realized investment losses exceeded unrealized gains by $114,120. Total additions of $420,549 remained substantially below claims and expenses.

In March, the trustees reduced the Option 2 payment percentage from 1.24% to 0.82% following an updated cash-flow forecast. The year therefore combined a lower payment percentage with continued use of principal to meet claims and administrative costs. The ROHN recovery provided additional resources but did not prevent the decline in the remaining fund.

UNR ended 2010 with net claimants’ equity of $14.64 million, down $1.60 million from $16.24 million. The Trust recognized $1.48 million in settled claims and paid $1.14 million in cash to claimants; the difference reflects settlement and payment timing. Operating and claims-processing expenses totaled $386,510. Net investment income of $476,933 was partly offset by $672,543 in realized losses, while $311,978 in unrealized gains and $141,811 in filing-fee revenue helped limit the decline. Total additions of $258,179 were well below claims and expenses.

The Trust increased its Option 2 payment percentage from 1.1% to 1.24% in March 2010 after incorporating the prior year’s ROHN litigation recovery into its forecast. The report also describes a subsequent reduction to 0.82% in March 2011 following a new actuarial forecast. The trustees highlighted the growing importance of administrative costs as the remaining fund diminished, an issue separate from the year’s investment results.