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Clear as Mud: Asbestos Trusts and Empirical Evidence



One of the most frustrating things about studying the intersection of bankruptcy and asbestos personal injury is the lack of transparency concerning the asbestos claims filed against the debtor and, ultimately, the asbestos trusts established by asbestos bankruptcy plans.

This is particularly troubling in recent years because lawyers and firms that submit claims to the trusts have increasingly argued that the trust distribution procedures, whose terms are generally left to the discretion of leading plaintiffs' tort lawyers, are nonetheless excluding valid claims and/or requiring more information that the tort system. In other words, these highly-sophisticated players in the tort bar could not maximize payouts and minimize time to payment when left almost entirely to their own devices.

As ridiculous as this may sound on its face, the representations may "ring true" when framed in the proper venue or manner - plaintiffs' bar presentations about "pitfalls" to avoid, selective representation of facts about claims that were denied, etc. - but that does not make them so. Adverse parties that obtain access to this information are bound by strict confidentiality orders concerning the information they may disclose, so they may not be able to fight this particular P.R. battle even when they know the facts are being misrepresented. And the information available publicly is, at best, sparse. In short, the evidence framing these debates is mostly anecdotal and inevitably far from complete - self-serving representations about the "true" state of affairs, largely unhelpful macro disclosures concerning operations, and "common sense" assessments of how trust distribution procedures seem to work.

If we are going to continue to rely upon privately-designed and administered trusts to address the asbestos injury and litigation crises, we need sufficient information made available for PUBLIC discussion. The parties that design these trust procedures again and again are in the best position to ensure that this happens. It's one thing to be forced to rely on anecdotal evidence because that's all that is available; it's another when that's all you choose to make available. Indeed, as we saw in the asbestos injury conspiracy, it speaks volumes about the reliability of the "evidence" deemed suitable for public consumption.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.