In the early 1980’s, the Johns Manville Corporation, a former manufacturer and producer of asbestos and asbestos containing products, filed a bankruptcy petition for reorganization in order to protect itself from its creditors, mainly persons suffering asbestos-related injuries from exposure to Johns Manville products. When Manville went into bankruptcy, it was acknowledged that it had assets greater than its liabilities. Nonetheless, United States Bankruptcy Law allowed the filing of the petition and ultimately the reorganization of the company and the development of a plan to compensate, at drastically reduced rates, those persons suffering from all varieties of asbestos-related disease who were exposed to Johns Manville products, either occupationally or through household exposure. Today, the Manville Personal Injury Settlement Trust, recognizes and settles claims on a rigid schedule of benefits and pays out 10% of the scheduled value of the claim. In the case of a person suffering from mesothelioma, for example, Manville evaluates the claim at $200,000 and issues a check in the amount of $20,000 in exchange for settlement documents acknowledging that the injured party may never receive more than the $20,000 initial pro rata distribution.
Since Manville went into bankruptcy, a string of other asbestos manufacturers have filed for bankruptcy for more or less the same reasons invoked by Manville. This year alone three corporations which produced asbestos containing materials or utilized them in the construction of equipment filed bankruptcy petitions. The Babcock and Willcox Corporation, which made industrial boilers coated with asbestos insulation, filed for bankruptcy in February; Pittsburgh Corning Corporation, which made a form of pipe covering and block insulation called Unibestos, filed a petition for bankruptcy in April; and in early October, Owens Corning, one of the manufacturers of asbestos containing pipe covering and block in the United States filed a bankruptcy petition. Other companies which have filed for bankruptcy over the past two decades are the Celotex Corporation, Forty-Eight Insulations, HK Porter, Eagle Picher Industries, Union Rubber and Asbestos Corporation, Raytech Industries, and Stone and Webster.
The filing of a bankruptcy petition has the effect of bringing to a halt the prosecution of your claim against the bankrupt defendant. In other words, we are prohibited by law from continuing your lawsuit against the company, for example, Owens Corning, or otherwise attempting to collect damages from that company until such time as a plan is put into place to compensate asbestos personal injury victims.
Unfortunately, the bankruptcies of asbestos manufacturers will inevitably diminish the recoveries which our clients receive in settling their asbestos disease cases. Each of these bankrupt companies have or will develop a plan for payment to asbestos victims. The amount of money each company ultimately pays depends on such factors as the severity of asbestos disease you have and the amount of monies each company has left to compensate each asbestos victim. We are mindful of this problem, and we are tracking the various bankruptcies involved and filing proofs of claim as allowed by the bankruptcy courts. As for Owens Corning settlements already agreed to, settlement payments will be deferred until the bankruptcy court approves the reorganization plan. Therefore, although you may have received and signed a release for this company, payment will not be made as promised. It is not clear at this time what value will finally be paid to the open claims against Owens Corning Fiberglass Corporation. We appreciate your patience with this process.
Despite the bankruptcies, your claim is important and remains valuable. We continue to pursue all potentially responsible parties on your behalf.