In its final round of large settlements, the Manville Property Damage Settlement Trust announced this month that it is paying out $60.7 million in partial reimbursement to schools and other asbestos property-damage claimants.
To date, the trust has disbursed $153.7 million to nearly 25,000 claimants. Smaller amounts will be distributed in 1992 and 1993, after which the trust will indefinitely suspend operations due to a lack of funds, a trust official said.
More than 5,000 public schools and school districts and 1,220 private schools were eligible for partial compensation from the Johns-Manville Corporation. The former asbestos maker filed for protection from creditors under Chapter 11 of the federal bankruptcy code in 1982 in response to many asbestos-related lawsuits.
Only those schools that originally filed property-damage claims with the company by Jan. 31, 1985, were eligible for compensation.
Schools that filed claims with the trust by November 1989 were eligible to receive funds in early 1990. Schools that filed by November 1990 will receive funds during this current round of settlements.
Schools that filed claims received a maximum of 12 percent to 32 percent of the damages they sought, depending on the nature of the asbestos material they purchased and the type of work that was needed to remove it. On average, claimants received 20 cents to the dollar, said Vincent Blake, the trust’s treasurer.
Mr. Blake said future payments will be quite limited because the trust is nearly insolvent. Last November, he said, the U.S. Court of Appeals for the Second Circuit took this situation into account when it allowed the trust to stop operations after its scheduled fourth cycle of payments, in March 1993.
Theodore Mayer, a lawyer for the trust, said it will develop a plan for suspending operations and will submit it to the court for its approval by early summer. The plan will outline under what circumstances the trust would begin to distribute money again, he said. In the interim, the trust will continue to collect claims but will not process them, he said.
Observers said they expected this development. Under its bankruptcy and reorganization agreement with the court, Johns-Manville created two trusts to handle asbestos-related claims: a property-damage trust and a personal-injury trust. The property-damage trust received $125 million and was slated to receive any funds left over from the personal-injury fund, which received $3 billion from the former asbestos manufacturer.
The property-damage trust also received money as a result of settlements with insurance companies and through its investments.
But claims filed against both trusts far exceeded their resources, according to an annual report filed by the property-damage trust late last month in a U.S. Bankruptcy Court in New York City. With the personal-injury trust unlikely to meet its obligations, it is impossible to predict how much of its assets, if any, would be transferred to the smaller trust fund, the report said.
Last year, the personal-injury fund said it had spent virtually all of its funds after paying about 20,000 claims and could not pay remaining victims or their survivors for up to 20 years. Johns-Manville has since been working with the courts to develop a plan for replenishing the trust.
