The handwriting was on the wall. The first significant defendant to bail out was Unarco, which filed for bankruptcy in early 1982. Unarco’s liability was primarily based on the Unibestos product line, which it had sold to Pittsburgh Corning in 1962. This was not considered, at the time, to be a particularly mesothelioma significant event, as the assets and insurance coverage of Unarco had been limited.
Later in 1982, however, Johns-Manville filed for bankruptcy protection. This sent shock waves throughout the country and, in fact, the world, as Johns-Manville was a gargantuan, diversified and quite profitable Fortune 500 company with a healthy balance sheet, so long as the asbestos mesothelioma liabilities were kept off it.
What allowed J-M to pull this off was an obscure change in the bankruptcy laws. Under the old bankruptcy law, debts, such as personal injury mesothelioma liabilities, could only be discharged (i.e., eliminated) if they were liquidated. This means that the debt has been reduced to a sum certain.
Asbestos law claims, such as handled by mesothelioma attorneys, are unliquidated until there is a jury verdict. What the new law did was to allow liable companies to limit or eliminate liabilities for unliquidated personal injury claims.
Since the J-M bankruptcy, a number of defendants have also sought or been forced into bankruptcy protection, including:
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