A new article is out regarding problems with asbestos bankruptcy trusts, which are the antithesis of transparency, as previously described here and here. In a prior article last year, three Cozen O’Conner lawyers (they represent insurers) wrote a significant Norton Bankruptcy Journal article detailing the lack of transparency in the asbestos trusts. The authors are William P. Shelley, Jacob C. Cohn and Joseph A. Arnold. You can obtain the full article here at Cozen’s website. Now, Messrs. Cohn and Arnold are back with an updating June 22, 2009 article titled: New Generation of Asbestos Trusts Encourages Double Dipping. The article is published at the Daily Journal, which requires a subscription.
Among other things, the article describes two recent events that are helping focus more sunshine on the asbestos trusts and give trial defendants the benefit of offsets. Thus, they describe a Washington state court decision in which a trial judge allowed “asbestos defendants “a setoff for amounts: “received to date,” “agreed to and to be received,” “that can be obtained by application to existing bankruptcy trusts” and “that can be obtained from bankruptcy trusts expected to soon become available” Coulter v. AstenJohnson, 2008 WL 4103199 (Wash. Super Ct., May 30, 2008). The authors also address developments in Los Angeles where the judge presiding over asbestos cases issued a May 27 Third Amended General Order No. 29 requiring plaintiffs to file a case report disclosing basic product identification and exposure information, and to attach a “copy of each bankruptcy proof of claim relating to asbestos exposure which plaintiff(s) has submitted to any bankruptcy Trust.”
As simple as those steps sound, most trial courts have not yet entered similar orders. Why? Some plaintiff lawyers have too often managed to defeat letting sunshine make a its way into asbestos trusts. Much more sunlight is needed.