With tens of thousands of asbestos lawsuits already filed, chemical companies Bondex International, Specialty Products Holding Corp., and RPM International INC are in the process of estimating future asbestos claim numbers. Claimants are seeking a number close to $55 million, while the debtors’ are hoping for nearer to $30 million. Asbestos injury attorneys are keeping a close watch on this important case.
This issue was brought to public attention in 2010, when the two subsidiaries of RPM, Bondex and Specialty Products, filed for bankruptcy in attempts to resolve current and future asbestos-related lawsuits. The companies are using the constituents of Chapter 11 bankruptcy to establish a trust for lawsuit payments. Unfortunately, the companies did not enter into Chapter 11 with any pre-determined or pre-negotiated plan for claimant settlements, hence the long drawn-out trial proceedings in Pennsylvania federal bankruptcy courts.
Chapter 11 bankruptcy allowed the former defendants immediate immunity from civil suits and forced those companies to establish trusts to settle claims outside of the tort system. During the estimation hearing each side is allowed 17-and-a-half-hours to present their respective cases. Numerous medical, scientific, and economic experts are testifying for both sides during the hearing.
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Many of the asbestos liabilities stem from RPM’s acquisition of the Reardon Company, which manufactured asbestos-containing home repair products until 1977. Previously, RPM’s insurance covered 90% of the asbestos settlements and judgments. Insurance companies claimed exhaustion and ceased payments in 2003. Between 2005 and 2009, the asbestos claims against Bondex and Specialty Products cost them anywhere from $60 to $82 million per year.
The type of asbestos found in Bondex and Specialty Products goods was chrysotile, a frequently debated strain of the mineral. There is much speculation (mostly by liable companies and their paid experts) that chrysotile is less carcinogenic than the other strains of asbestos, and the RPM subsidiaries are maintaining that it is unlikely to cause mesothelioma. One doctor, Laura Welch, who is a board-certified physician specializing in occupational medicine, argued for just the opposite. Welch has personally conducted and published studies of industrial workers since the mid-1990s. Her studies found that chrysotile can and does directly lead to mesothelioma, even in the absence of other asbestos strains.
There is much peer-reviewed academic literature to support Welch’s claim, although debtors continue to claim their products alone are not responsible for the development of mesothelioma. Debtors are claiming that this particular case varies significantly from previous asbestos litigation because they already filed for bankruptcy, and claim they have already settled past asbestos cases.
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The majority of asbestos claims arise from a Bondex joint compound product, which was designed for at-home, do-it-yourself use. Because the product at the center of this case was meant for at-home use, debtors are able to claim that exposure to other forms of asbestos are the real culprit, and that blame should not be entirely placed on Bondex. The companies maintain that most mesothelioma victims developed the disease from working in industrial or commercial settings instead of from their product.
Many of those testifying on behalf of the debtors have an illustrious history with asbestos companies. One of whom, Dr. Feingold, has been paid by more than one asbestos company to testify in proceedings such as this. Timothy Coleman, who is also a debtors’ witness, seems to view the case more fairly. A New York-based global investment and advisory firm employee, Coleman stressed that these estimations are pure guesswork, and that there are a lot or risks involved in setting such estimation in stone. Coleman testified that such factors as changing healthcare costs and the development of potential mesothelioma treatments could affect the amount of money paid to claimants in the future.
The hearing is expected to continue into this week. Mesothelioma lawyers at Pintas & Mullins Law Firm are keeping a close watch on this case and will report on any updates and judgments. If you or someone you love was the victim of asbestos exposure, contact an experienced attorney for a free legal consultation.