How Do Asbestos Trust Funds Work?

Quick Answer

Asbestos bankruptcy trusts were created when asbestos defendants went bankrupt under the weight of asbestos liability. 60+ trusts now hold over $30 billion. Most mesothelioma claimants qualify for 8-15 trusts simultaneously. Process is faster than lawsuits — typically 30-180 days from filing to payment.

Asbestos bankruptcy trusts emerged in the 1980s-2000s when major asbestos defendants — Johns-Manville (1982), UNARCO, USG, Owens-Corning, W.R. Grace, Federal-Mogul, Halliburton's Harbison-Walker, and dozens more — went bankrupt under the weight of asbestos liability. Federal bankruptcy courts required these companies to establish trust funds (under Section 524(g) of the Bankruptcy Code) to compensate current and future asbestos victims. The trusts continue to operate today, paying out billions annually to mesothelioma claimants.

How Trust Fund Claims Work

1. **Identify applicable trusts** based on documented exposure to specific manufacturers' products. Most claimants qualify for 8-15 trusts.

2. **Submit claim package** to each trust including: medical records confirming mesothelioma, work history establishing exposure, and trust-specific claim forms.

3. **Trust review** — typically 30-180 days. Some trusts use expedited review for terminal claimants.

4. **Payment** — trusts pay a percentage of the original 'scheduled value' (typically 5-50% depending on the trust's solvency). Combined trust payments typically range $300K-$800K per claimant.

Largest Asbestos Trust Funds

• Manville Personal Injury Settlement Trust ($2.5B+ paid since 1988)
• Owens Corning / Fibreboard Trust
• USG Asbestos Trust (Bestwall liabilities)
• W.R. Grace Asbestos Trust (Monokote + Zonolite)
• Combustion Engineering, Babcock & Wilcox, Foster Wheeler (boiler trusts)
• Garlock, Crane Co. (gasket/packing trusts)
• CertainTeed, Eternit (cement product trusts)