 |
 |
||||||
[November 2008]
Asbestos Liability Forces Christy Refractories into Bankruptcy
St. Louis-based manufacturing company Christy Refractories, LLC, has recently filed for bankruptcy as a direct result of its inability to cope with increasing numbers of asbestos-related personal injury claims.
The company filed for the protection of Chapter 11 bankruptcy last week concerning liability relating not to the company itself, but to a subsidiary acquired in 1995. The subsidiary once manufactured asbestos-containing products.
Christy Refractories was apparently aware in 1995 that the subsidiary had manufactured asbestos products and might, in the future, be subject to liability claims. In fact, the company was even aware that there were already lawsuits pending back in 1995.
The company’s bankruptcy petition stated that over the last decade or so, as more people have been diagnosed with asbestos-related diseases such as mesothelioma and more lawsuits have been filed, its liability has increased to the point where it requires the protection that bankruptcy provides.
The petition specifically states that there are currently more than 1,000 lawsuits pending against Christy Refractories from people exposed to asbestos in locations where the subsidiary company’s asbestos products were used. The cases range from those diagnosed with pleural mesothelioma to any other asbestos-related illness.
The company has currently paid out approximately $27 million in asbestos liability claims, and can pay out a further $18 million. However, it’s not clear that the company’s assets will be available to satisfy future claims.
Nearly 400,000 people in the United States have filed personal injury lawsuits after being exposed to asbestos and experiencing mesothelioma symptoms. Many such cases have resulted in multi-million dollar verdicts or settlements for plaintiffs. Some estimates say that the total cost of asbestos litigation could eventually top $200 billion in the U.S. alone.
As a result of the enormous number of asbestos liability claims, more than 70 asbestos manufacturers have been forced to file for bankruptcy since 1976. In fact, more than half of that total has filed for bankruptcy since the year 2000.
As former vermiculite-mining company W.R. Grace has already done, Christy Refractories will likely create a trust fund to satisfy future asbestos-related claims.
ENDS