Spotlight on Asbestos Bankruptcy VCFs

The saga of a retired nurse in Belfast highlights the ups and downs of the bankruptcy victim compensation fund claims process.

Monica Johnston worked at the Royal Victoria Hospital for almost 50 years. She started working as a nurse in 1977, in a building that, unbeknownst to her, was laced with asbestos.

"I loved my job, and I was very fortunate that I had very good health for most of my life, and I never smoked or anything like that," she said.

In November 2021 she started noticing that she was constantly out of breath but was unable to get a diagnosis for some time. She received a diagnosis of mesothelioma, an asbestos-related cancer, in January 2023.

The 66-year-old from Bangor said when she received the diagnosis, "it was like a bomb was dropped on my family."

"I kept thinking, 'How could this happen?' I've only ever worked as a nurse; it has changed our lives forever," she said.

She turned to the Belfast Trust for compensation. Between 2019 and 2024, the three Belfast Trusts paid over $500,000 to asbestos exposure victims. Between 2014 and 2023, there were 699 asbestos-related deaths in Northern Ireland.

Background

Beginning around 1900, many construction, manufacturing, and other companies used asbestos for various purposes, mostly as an insulator. Although the first victims partnered with nationwide asbestos lawyers in the 1960s, the use of this substance continued unabated. These companies continued to deny that their products posed health risks, in much the same way that Big Tobacco later fervently denied that cigarettes were addictive.

By the 1980s, the carefully-constructed asbestos coverup had almost completely unraveled, as exposure victims began filing liability actions in droves. At that point, to avoid facing a mesothelioma lawyer in court, many asbestos providers declared bankruptcy.

Bankruptcy’s Automatic Stay immediately stops all civil actions. Furthermore, the entity which emerges from bankruptcy is legally different from the one that filed a petition. So, in effect, the Automatic Stay’s protections last forever.

To cure this problem and compensate victims, federal judges forced bankrupt asbestos providers to transfer their assets into large victim compensation funds. Today, some 50 years later, these funds still contain tens of billions of dollars.

Exact procedure varies among funds, as each VCF typically sets its own rules. Nevertheless, here’s how it usually works.

When a nationwide mesothelioma lawyer files a petition, the system places it on the fast track or the slow boat. Victims who are expected to die within the next six months are usually on the fast track. Everyone else is on a slow boat.

Significantly, no adverse lawyer challenges a mesothelioma lawyer’s evidence and legal contentions. Therefore, a bare-bones petition is usually sufficient. Additionally, whereas the litigation claims process may take years, the VCF process usually takes months, even if the petition is on a slow boat.

Frequently, bankruptcy VCF matters are easy to file, but difficult to resolve. No judge oversees the process, most significantly the settlement process. Many Fund Administrators take advantage of this lapse and make take-it-or-leave-it or low-ball settlement offers.

If a bankruptcy VCF is not a good alternative, for whatever reason, others are available, such as Social Security Disability.

Asbestos exposure diseases are generally fatal. So, they certainly meet the Social Security Administration’s definition of disability. As a result, applicants are usually entitled to monthly cash benefits and Medicaid membership.

This streamlined process is even faster if, as is usually the case, the victim is over 65 at the time of filing. As a rule of thumb, many victims were exposed to asbestos in their 20s and became disabled in their 70s.

Mesothelioma victims need and deserve significant compensation. For a confidential consultation with an experienced nationwide mesothelioma lawyer, contact the Throneberry Law Group. We routinely handle these matters on a nationwide basis.