Asbestos Bankruptcy Trust Transparency Series: Another One Bites the Dust
June 22, 2020
Trane Technologies is the fourth company to file bankruptcy in 2020 to manage its asbestos-related personal injury liabilities. See https://news.bloomberglaw.com/bankruptcy-law/trane-technologies-units-go-bankrupt-to-handle-asbestos-claims. The asbestos-related bankruptcy was filed on June 19, 2020, in the Western District of North Carolina by subsidiaries of Trane, Aldrich Pump LLC and Murray Boiler LLC, which include the asbestos liabilities for Trane, Ingersoll Rand and various other brands which have been part of the Trane group of products over the past several years.
Trane’s Informational Brief filed last week includes an overview of the challenges facing companies that remain viable defendants in asbestos litigation. The story of these companies is the same story replicated across the country in asbestos litigation – companies who never mined or manufactured an asbestos-containing product become bigger and bigger targets in hundreds of thousands of cases. “In the words of one plaintiffs' lawyer, asbestos litigation became the ‘endless search for the solvent bystander.’” The plaintiff’s product exposure is often minimal, and case values are inflated because of the lack of transparency between the tort system and the bankruptcy trust system. The result is that companies that only had minimal, if any, asbestos-related products are paying millions to defend baseless claims.
According to Bloomberg Law, “The companies lamented a nationwide ‘sue and settle’ system of asbestos litigation in which multiple manufacturers are named in exposure cases.”
Bottom line, companies are finding that channeling of the asbestos claims through the 524(g) asbestos bankruptcy process is the only “rational resolution of the asbestos litigation being asserted against them.”
Now more than ever, viable companies facing asbestos liabilities are relying on trust value estimations to properly value their cases and expose alternative exposures early in litigation. This same information may also be used later to support their petitions for bankruptcy relief. Billions of dollars remain available in the trust system to compensate claimants.
Bankruptcy trust claims information is voluminous and constantly changing, and Gay Jones & Kuhn have remained at the forefront of this issue to assist parties, including estimating available claim dollars. To discuss alternative exposure development with our team, please email Sarah Beth Jones (sbjones@gayjoneslaw.com), Mary Margaret Gay (mmgay@gayjoneslaw.com), or Joanna Kuhn (jkuhn@gayjoneslaw.com).
ABOUT GJK: Gay Jones & Kuhn PLLC offers a broad spectrum of legal services for clients in Mississippi, Arkansas, and Alabama, including mass tort and personal injury defense, asbestos bankruptcy trust transparency, strategic counsel services, general counsel and small business services, special education counsel, and personal legal counsel and estate planning services. For more information about GJ&K, visit www.gayjoneslaw.com.