by Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform
Originally Published in The Hill
In 1994, Congress amended the bankruptcy code allowing for the creation of giant asbestos bankruptcy trusts for the benefit of asbestos victims. Over the years, bankrupt companies and their insurers have funded these trusts with $36 billion, which according to the Government Accountability Office had paid out over $17.5 billion by 2010, including up to 40 percent in fees to plaintiffs’ lawyers.
Unfortunately, recent court cases and news reports indicate that some of the money paid out by these trusts was for fraudulent or inflated claims.