Earlier this month two subsidiaries of the chemical giant RPM International Inc., Bondex International and Specialty Products Holding Corporation, filed for bankruptcy in a maneuver intended to abate huge losses due to asbestos related lawsuits.
The bankruptcies followed the last of a seemingly non-stop trickle of multi-million dollar payouts to the victims of asbestos exposure and their families. The most recent payout came after Bondex International elected not to settle with a man who developed mesothelioma partially because of exposure to their products, but instead to gamble more serious penalties against a lower payout in a court of law. Bondex International ended up sharing responsibility for %60 of an $11 million verdict with Georgia Pacific and Kelly Moore, landing a critical blow to Bondex International’s financial security.
Mesothelioma is an aggressive and fatal cancer that has been linked with exposure to dangerous asbestos fibers. Asbestos fibers, historically found in a variety of products and raw materials in some workplaces, enters the body through accidental inhalation or ingestion. The microscopic, thread-like fibers then pass through the lung or intestinal walls where a soft tissue that surrounds the body’s organs known as the mesothelium entangles them.
Deposits of asbestos fibers in the mesothelium trigger an internal scarring reaction. After years or even decades, that scarring can develop into malignant tumors which spread throughout the body and eventually cause organ failure and death.
Bondex International has been involved in a variety of asbestos related lawsuits over the past twenty years as diagnoses of asbestos related disease continue to rise. Several years ago the company set aside some $190 million to cover existing and future asbestos claims, but that amount didn’t stretch as far as the company had imagined. This year an additional $288 million was reserved to cover future asbestos related claims, causing the company to report a loss of more than $85 million for the quarter ending last month.
The bankruptcy declaration could help to Bondex International to avoid further liabilities.
“This action has been taken to once and for all resolve the asbestos-related Bondex legacy liability. These filings bring an immediate halt to all tort system costs associated with the Bondex asbestos liabilities, and enable the filing entities to utilize section 524(g) and other provisions of the U.S. Bankruptcy Code to achieve a permanent and comprehensive resolution of asbestos-related liability,” said RPM International Inc.’s CEO, Frank Sullivan.
These types of maneuvers, as well as the establishment of federal funds to cover the medical needs of asbestos affected families, could indicate the homestretch for the battle against asbestos and negligent asbestos companies throughout the USA. As more and more companies are held responsible for asbestos illnesses and evidence of their negligence continues to mount, affected individuals and families stand a far greater chance of being heard and compensated fairly.
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