Delaware Supreme Court Rejects Broad Asbestos Trust Data Preservation Effort
by Sarah Beth Jones, GJK Attorney

On July 31, 2026, the Delaware Supreme Court issued a significant decision limiting efforts by asbestos defendants to require asbestos bankruptcy trusts to preserve historical claims data for future use. Its decision reversed the Court of Chancery’s decision denying the trusts’ motion to dismiss, finding that the asbestos defendants had adequately pleaded an equitable bill of discovery and could pursue broad preservation of trust claims data. The Delaware Supreme Court directed the chancery court enter a judgment dismissing the action.

 

What the Court Held
The Court rejected a request for a broad preservation order because it was not tied to any specific case. It emphasized that any preservation remedy must:

• Relate to a specific pending or imminent claim;

• Seek information material to that claim; and

• Be necessary because the information cannot be obtained through standard discovery.

 

Implications for Trust Transparency Strategy

The Delaware Supreme Court did not eliminate the possibility of preserving trust data, but it significantly narrowed the circumstances in which such relief is available. This decision signals courts are unlikely to impose blanket obligations on bankruptcy trusts to preserve large categories of claims data absent a case-specific showing.  Instead, defendants seeking trust-related discovery or preservation relief are more likely to be successful if requests are tied to active litigation, identify specific plaintiffs and claims, and demonstrate that data is at risk of loss and not otherwise obtainable through ordinary discovery tools.

Because trust data may be modified or deleted over time, defendants may face heightened risk of evidentiary loss if they do not promptly pursue discovery in filed cases.
 

Going forward, defendants should consider:

• Early identification of trust-related exposure in individual cases;

• Prompt, targeted discovery requests directed at specific trusts and claims; and

• Use of jurisdiction-specific trust transparency statutes where available.

 

The Delaware Court of Chancery has not yet entered its dismissal order following the Delaware Supreme Court’s decision. We will continue to monitor developments and assess strategies to reduce the risk of trust data loss in active and future asbestos litigation.

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ABOUT GJK: Gay Jones & Kuhn PLLC offers a broad spectrum of legal services for clients in Mississippi, Louisiana, Arkansas, and Alabama, including mass tort and personal injury defense, asbestos bankruptcy trust transparency, strategic counsel services, general counsel and small business services. For more information about GJK, visit www.gayjoneslaw.com