Myth:  Asbestos lawsuits have driven many asbestos manufacturers into bankruptcy, causing businesses to close and jobs to be lost.

Fact: The fact that some asbestos companies have taken advantage of the bankruptcy courts to pay off their debts and reorganize does not mean they are not flourishing.  They have not gone out of business;  they are under all the protection of Chapter 11 and have started over again and are thriving. 

Fact: Armstrong, for example, had 15,400 employees when they filed for Chapter 11, they have 16,500 today. Another company that filed for bankruptcy protection, Owens- Corning, had 18,000 employees when they filed for Chapter 11, and they still have 18,000 employees today. Owens-Corning’s annual sales on the other hand have skyrocketed, from $3.7 billion before bankruptcy to $4.9 billion following bankruptcy.

Fact: Emory University’s John H. Harland Professor of Finance, Accounting, and Economics George J. Benston analyzed seven of the largest asbestos companies who are in Chapter 11 reorganization.  Based on his analysis of the seven companies’ financial statements over the five years 1998 – 2002 and projections over 2003 – 2005, he concludes: “On the whole, they essentially have increased or stabilized their sales, assets, employment, and profitability, and have projected increases.  It is fair to say that they are viable and likely to be increasingly successful companies that should generate funds to exit bankruptcy significantly stronger than when they went in.”

Myth: The Labor Unions that represent the asbestos workers and other victims of asbestos poisoning support the Frist/Hatch Trust Fund proposal.

Fact: In his October 27, 2003 letter to Senator Frist, John Sweeney, President of the AFL-CIO, opposed the announced agreement between corporations and insurers to contribute a maximum of $114 billion to an asbestos trust fund.  “[T]he business and insurance funding proposal is grossly inadequate to provide fair compensation for victims, representing roughly $40 billion less than the funding provided for by the Senate Judiciary Committee in S. 1125,” wrote Mr. Sweeney.  The AFL-CIO has also repeatedly and consistently expressed serious reservations with the funding mechanism in the bill, particularly the lack of any guarantee in the bill that funds will be collected from the companies and insurers in any specific amounts.  Labor also insists on inclusion of the Biden provisions that returns claimants to the tort system if the fund runs dry – provision that were rendered hollow by the Frist/Hatch bill.

Myth: Congress needs to pass the Frist/Hatch Trust Fund bill because asbestos cases are overwhelming our courts with too many lawsuits, many involving workers who are not sick, delaying compensation for victims who need the money.

Fact: Our courts are well equipped to handle this litigation, and have managed it well.  In all state and federal courts during 2001, there were only 60 asbestos trials, which involved fewer than 150 people, in 2001.  About 50,000 claims were settled out of court during the same period.

There is only one reason the number of asbestos claims has grown: because companies knowingly poisoned millions of Americans throughout the nation. Asbestos companies, not victims, have created this problem. But the fact is the courts are treating the asbestos companies fairly.

Fact: Only people who have been diagnosed with an asbestos-related disease, and who are able to provide proof of exposure to asbestos fibers, are compensated by the courts. According to the most recent data from the Manville Trust, a reliable benchmark for trends in asbestos litigation, more than 85 percent of claims have been filed by injured workers with cancer, asbestosis or other severe asbestos-related illnesses.

Fact: Moreover, State courts throughout the country expedite cases for asbestos victims with fatal diseases such as mesothelioma. Judges in most states give priority to extremely sick or dying patients when asked to do so by their attorney.  And courts in the states with the majority of claims, move to the front of the line cases of those victims who are the most sick.  A number of these states, including California, Texas, New York, Illinois, Washington, Oregon and Louisiana, either by statute or formal procedure, provide expedited treatment to existing cases with an urgent need.

Myth:  The asbestos bill is really a jobs bill – by forcing bankruptcies, asbestos lawsuits have cost jobs.

Fact: According to Professor Bentson’s analysis, the asbestos-related bankruptcies have not materially affected jobs; therefore, the Frist/Hatch proposal is not a jobs bill – instead, it will bailout the asbestos companies and their insurers on the backs of innocent victims and their families.  As Professor Bentson reveals, total employment at the largest asbestos companies that are in bankruptcy did not decline materially. In fact, post-Chapter 11 filing employment increased at one company, Babcock & Wilcox, by 39%. Other companies also increased their post-filing employment.  Three companies in the study decreased their post-filing employment – the largest decrease was 10% - but importantly, in the case of two of the companies that decreased their post-filing employment, these decreases resulted form pre-filing restructuring programs and divestitures made in the ordinary course of business and were unrelated to the Chapter 11 reorganizations. 

Fact: All the companies reviewed by Professor Bentson met their obligations to fund employee pensions. Post-Chapter 11 filing pension contributions increased substantially from $64.5 million in 1999 to $114.6 million in 2000 to $243.2 million in 2001.  Contributions went down in 2002 to $107.2 million.  These contributions indicate on-going funding, rather than a onetime contribution. 

• Victims dying of mesothelioma (these victims typically die within a year from diagnosis) will be thrown into financial chaos in their final days. Even if they are granted financial relief before they die it will be about one-third of what they now receive, on average, in the courts, barely enough to cover their medical bills.  Their families will have little to fall back on when they are gone.