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Fraud: The Code Word of Asbestos Companies

The Wall Street Journal as well as the New York Times business writer, Joe Nocera, have hailed the decision of Judge George Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina, for exposing the supposed fraud of the asbestos bankruptcies and law suits.

This arose as a result of the bankruptcy of Garlock, Inc. and its protestation that it does not deserve to have to pay out enormous amounts to protect the individuals who have cancer and lung disorders from exposure to Garlock’s asbestos products.

Unfortunately Judge Hodges seems to have bought the same argument that hundreds of state civil courts have rejected; that the asbestos products of Garlock were not really dangerous. It is unfortunate that the desire to protect the rights of the injured from being dragged through the mud in in a court meant to protect business has resulted in the controversy in North Carolina.

First, when a person who has or had asbestos disease files a lawsuit, that suit names a number of companies to achieve full redress from the purveyors of this toxic material. It was actually the companies themselves which caused the adding of every possibly liable company to a suit as if all asbestos product manufacturers were not sued, the ones sued would try to blame others not named. Thus the need to join all manufacturers was REQUIRED.

The success of proving that the asbestos product manufacturers were responsible took over twenty years despite continued lying by the asbestos companies, just as cigarette manufactures lied for over 30 years about the dangers of their products.

After claimants repeatedly proved the liability of the asbestos companies, the companies filed for bankruptcy under the corporate friendly laws of the bankruptcy courts. As more and more claimants with asbestos diseases filed cases, large sums were put into trust to pay those injured parties some minimum compensation.

These company trusts usually paid out between 1 and 10 percent of the amounts that the particular company had paid in state court trials. Remember, the amount each paid in state court trials was NOT the full amount of the compensation to the dead, dying and injured. It was only their share under state law. This was not double dipping; it was only forcing each company to contribute its fair share.

When bankruptcy courts allowed companies to pay only pennies on the dollar the remaining defendants, UNDER THE LAW OF ALL 50 STATES, had to pay more to properly pay the injured. This is what led Garlock to file its bankruptcy. The North Carolina bankruptcy court calls foul if the lawyers for the injured did not want to divulge each and every amount received from other bankruptcy estates in estimating Garlock’s liability.

However the liability of Garlock depended on its settlements and court verdicts before it fled the state justice system. If Judge Hodges had reviewed the court dockets of the state courts that oversaw the litigation, he would have seen that the number of bankruptcy claims filed by an injured plaintiff had to be revealed and the amount received from each reported to a judge when a judgment was entered against any defendant in a case. Thus the transparency existed and exists today. To call this fraud is to ignore the safeguards in the state civil system.

It is because of this that when any person reads about “fraud” they need to understand that is a code word of asbestos company defendants to try and avoid paying fair compensation, and I am sorry to say, the misconceptions of judges who ignore the real victims: the sick and dying from exposure to asbestos.