ADVWG applauds investigation into asbestos bankruptcy trusts

The Asbestos Double-Victims Workgroup (ADVWG) is calling on additional state officials and federal authorities to join 13 states investigating whether several large national asbestos bankruptcy trusts are mismanaging funds, including if they failed to reimburse Medicaid and other medical providers as required in federal secondary payer laws.
In March, attorneys general from the states of AlabamaArkansasKansasLouisianaMichiganMontanaNebraskaNevadaSouth CarolinaSouth DakotaUtahWest Virginia, and Wisconsin joined forces in issuing a Civil Investigation Demand (CID) to four of the nation’s largest bankruptcy trusts. The trusts did not comply with the CID which led to the Utah-based lawsuit asking the court to require compliance.
Those trusts are formed under a law allowing companies with asbestos liability to emerge from a bankruptcy process solvent while creating trusts to pay currents and estimated victims. The AGs are concerned that negligent management of the trusts is cutting the amounts available to help victims, a disproportionate number of whom are veterans, and may not be repaying health care costs. Those victims may be unaware of possible claw-back actions coming down the pike.
The multi-state investigation comes on the heels of the “Garlock” case in North Carolina when a federal judge disclosed that evidence had been suppressed in all 15 cases where he had allowed specific discovery. Both the CID and the Utah lawsuit make clear links to the Garlock case and represent the first law enforcement action on the judge’s findings.
Sara Warner, Courts Monitor publisher, is a founding member and spokesperson for the ADVWG.