Asbestos Trust Fund

An asbestos trust fund is a pool of money set aside by a bankrupt asbestos company to pay current and future injury claims. When a manufacturer faced more lawsuits than it could afford, it often reorganized in bankruptcy and funded a trust to compensate victims instead of paying through the courts. Dozens of these trusts hold tens of billions of dollars and pay claims according to published criteria.

Origin

The trust model grew out of the 1982 bankruptcy of Johns-Manville and was formalized when Congress added Section 524(g) to the Bankruptcy Code in 1994, allowing companies to channel all asbestos liability into a dedicated trust.

Significance in Asbestos Context

For patients, trusts are often a faster and more certain source of compensation than a lawsuit, and you can usually file trust claims in addition to suing companies that are still solvent. Each trust publishes a matrix listing qualifying diseases and payment amounts, and requires proof that you were exposed to that company's products along with a medical diagnosis. Because a single work history often involves products from many bankrupt companies, your legal team will frequently file with several trusts at once. The value of your claim can depend on which trusts your exposure history qualifies you for.

Example Sentence

After his mesothelioma diagnosis, the shipfitter's attorney identified six asbestos trust funds covering the insulation brands used at his former shipyard.

Related Terms

Section 524(g) Trust, Manville Trust, Trust Distribution Procedures, Payment Percentage, Bankruptcy, Proof of Exposure

Notes

• Gather employment, union, and product-identification records early; trusts require proof of exposure to a specific company's products.
• Ask your attorney which trusts match your work history and whether filing affects any lawsuit against solvent companies.
• Each trust sets its own filing deadlines and payment percentage, which can drop as the fund depletes.