What happens to former employees when a company that used asbestos closes?

On Behalf of | Jan 19, 2024 | asbestos

Businesses that have historically used asbestos in their products do not always continue operating indefinitely. Many of these companies eventually shut down. They may have struggled to adapt to asbestos limitations and bans or may have faced too much economic pressure due to worker illnesses.

Workers exposed to asbestos may eventually develop mesothelioma, a deadly and frequently devastating form of cancer. Individuals with mesothelioma often require expensive treatments and have a poor long-term prognosis. Those diagnosed with mesothelioma and certain that it came from workplace exposure can pursue lawsuits against their former employers.

What happens if the business that exposed ill workers to a known human carcinogen has ceased operating?

Businesses often establish trusts

Even big, successful companies may crumble under the pressure of asbestos-related lawsuits. The paint brand Kelly-Moore Paints was a popular option for homeowners and professionals for 78 years. However, the company has now decided to cease operations because of expensive and continuing asbestos lawsuits.

The company uses asbestos in both cement and texture products. Even though it has been decades since the company used asbestos in its products, it faces modern lawsuits. This massive delay stems from the slow development of mesothelioma. Many people exposed to asbestos get diagnosed with mesothelioma three decades or more after their exposure.

So far, the lawsuits against the company have resulted in roughly $600 million in settlements. The company had an analysis performed that indicated the organization would likely face another $170 million dollars in liability through lawsuits in the upcoming years.

It remains to be seen what assets the company has as it moves through the dissolution process. However, the organization could very likely need to fund an asbestos trust as part of the process. Businesses that shut down or declare bankruptcy after exposing workers to asbestos often need to earmark financial resources to reimburse the people harmed by the company’s business practices.

Securing compensation from an asbestos trust can be as difficult as filing a lawsuit in many cases. Learning about the available protections for sickened workers by seeking legal guidance can make a big difference for those adjusting to life after a tough diagnosis.