Strong Justice For Serious Disease

Does business bankruptcy eliminate asbestos liability?

On Behalf of | Feb 26, 2022 | Asbestos

Businesses exist to make money, and they often try to avoid obligations that cut into their profit margins. They may fire workers who need accommodations or benefits, even though the law prohibits them from doing so. Some businesses will go so far as to file for bankruptcy to avoid financial or legal claims by customers or former employees.

That is exactly what some people suspect Johnson & Johnson wants to do in response to multiple asbestos contamination lawsuits losses in court recently. When a business files for bankruptcy in light of legal claims against it, the company can discharge some of its obligations and liabilities.

Does that mean you can’t sue a company for an asbestos-related illness after their bankruptcy?

Companies that deal with asbestos usually establish bankruptcy trusts

Bankruptcies don’t simply erase an individual’s or business’s obligations to others. A company that exposed customers or employees to asbestos will still have obligations to those affected individuals even after the business files for bankruptcy.  

The courts will usually require that the company establishes and funds a trust for future claims related to asbestos against the business. The trustee managing the trust will be the one to respond to claims from workers and their family members about asbestos-related illnesses like mesothelioma.

Even if the company that employed you or your spouse has since gone out of business, you may still be in a position to seek compensation for medical expenses and other losses your family suffered because of asbestos exposure. Learning about the rules that apply to asbestos-related illness claims will help you get compensation for your family’s losses.