March 8, 2018

Dubious Distribution: Asbestos Bankruptcy Trust Assets and Compensation

Sens. Thom Tillis, Chuck Grassley, and John Cornyn introduced the PROTECT Asbestos Victims Act yesterday to provide “much-needed oversight of asbestos bankruptcy trusts to ensure victims receive just compensation.”

Sen. Grassley, the chairman of the Senate Judiciary Committee, said the bill would “ensure that the trust fund is not syphoned away from the victims it was intended to help.” It would give the U.S. Department of Justice oversight authority to investigate fraud against asbestos trusts, which it currently does not have. Sen. Tillis said “adding in layers of oversight, accountability and transparency” would help return the trusts to their original purpose: compensating “asbestos victims, not trial lawyers.”

The press release cites a Forbes article on “institutionalized fraud” in asbestos trusts as an example of how fraud drains the trusts of resources “potentially causing compensation for future victims to be reduced or unavailable altogether.”

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