Caroselli, Beachler & Coleman, L.L.C.

Pennsylvania manufacturer seeks to create asbestos trust fund

Individuals who acquire mesothelioma, asbestosis or other illnesses as a result of exposure to asbestos fibers may be entitled recover financial compensation for the injuries they have suffered. Liability can lie with a number of different parties, including with the manufacturers of asbestos-containing products.

Because asbestos-containing products were once so widely used, many asbestos manufacturers now owe victims significant amounts of money. These obligations have even forced some manufacturers into bankruptcy. In an effort to ensure that victims are not denied compensation as the result of the manufacturers' insolvency, bankruptcy courts have ordered the companies to create "asbestos trusts" that provide paths to financial recovery.

Pennsylvania-based United Gilsonite Laboratories is one of the latest manufacturers to go down this path. Between 1954 and 1975, UGL sold cement construction sealant that contained asbestos. The company and its insurers have already paid more than $25 million in damages stemming from asbestos-related lawsuits. In addition, UGL is currently facing more than 950 lawsuits in 14 states.

Given these significant liabilities, UGL filed for Chapter 11 bankruptcy in March 2011, despite having nearly $49 million in sales in 2010. Recently, as part of its proposed reorganization plan, UGL asked the bankruptcy court to approve the creation of an asbestos trust fund.

If approved, the company would deposit $2 million into the fund and pledge an additional $8 million. Shareholders would contribute $1.75 million. UGL's insurers would also put money into the fund, though their contributions have not yet been disclosed.

If approved, potential claimants would be required to seek compensation within one year of the date the trust is created. This sort of time limit is not rare. As such, it is important for individuals with asbestos-related illnesses to take steps to identify and protect their rights soon after they are diagnosed.

Source: Citizens Voice, "Dunmore-based UGL considers $11.75M trust to settle asbestos-related claims," James Haggerty, Oct. 5, 2012.

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