Facts, figures and details about asbestos and the Manville Personal Injury Settlement Trust, which may be reorganized under a plan presented to a federal judge yesterday.
WHAT IS ASBESTOS?
Asbestos is a flaky, white mineral with natural fire, heat and electrical resistance. It was used widely for decades in various industries, predominantly shipbuilding, boilermaking and construction. During World War II, asbestos manufactured by what was then known as Johns-Manville Co. and several other companies provided the bulk of asbestos used in shipyards nationwide. Hundreds of thousands of workers were exposed to asbestos, but it wasn't until the 1970s that a definitive link between the mineral and severe respiratory diseases including lung cancer was established. Asbestos today has been removed from many public buildings. WHO'S LIABLE?
Manville Corp., which was the nation's leading asbestos maker, entered Chapter 11 bankruptcy court proceedings in 1982 because it couldn't meet its legal liabilities from thousands of asbestos health lawsuits. The Manville trust was formed as part of the company's 1988 court reorganization. Dozens of other companies nationwide face mounting legal problems due to asbestos liability. Several have entered bankruptcy court, others are financially burdened by the liability and many are looking to the Manville settlement as a possible model for resolving claims. Asbestos cases comprise the biggest product liability issue in U.S. history. LEGAL HISTORY
Plaintiffs and defendant companies have been wrangling over asbestos compensation since the mid-1970s and well over $2 billion has been paid to workers or their families. Thousands of claimants died before being paid. Companies have been held liable predominantly for a failure to provide adequate health warnings to workers. More than 90,000 asbestos lawsuits crowd federal and state court dockets nationwide. THE TRUST
The Manville trust is the biggest claims resolution mechanism in the country. It was set up with about $3 billion in cash and Manville securities. The Washington-based trust has paid more than $1.1 billion to settle more than 23,000 claims to date. But it has another 130,000-plus claims pending and faces an estimated 100,000 future claims. Earlier this year, the trust declared it had run out of cash and said some claimants wouldn't get any money until well into the 21st century. U.S. District Judge Jack B. Weinstein ordered an overhaul of the trust to meet its claims. THE PLAN
The trust previously had settled cases based on the time of filing rather than the type of disease and victims' need. The restructuring scraps that plan, dividing claims into two categories: serious ailments such as lung cancer and less severe problems. Claimants would receive only about 45 percent of their settlements' value. Annual payments would be made, dividing the total amount owed to a claimant by the total amount of the trust's available resources. Claimants in the first group would receive priority during the plan's first two years; the second group would not receive any payments until the third year of the plan. The plan still must be approved by Judge Weinstein. WHO PAYS?
Manville Corp. has agreed to inject an additional $520 million over seven years into the trust, which owns 80 percent of the company's common stock. Manville would pay $280 million in dividends over four years to the trust and another $240 million in years four through seven. The trust also holds $1.8 billion in Manville bonds that it plans someday to sell. Manville would make $75 million a year in bond payments to the trust starting next year and give the trust 20 percent of its annual profits beginning in 1992. Participants in the restructuring envision using the stock dividends for three years and then selling the bonds and some common stock to finance payments to victims. All agree there still is not enough money to meet victims' demands.
SOURCE: ASSOCIATED PRESS