Christy Refractories Co, LLC, a St. Louis-based manufacturer, has filed for bankruptcy protection due to a growing number of asbestos injury lawsuits filed against the company. This will likely result in a trust being established to satisfy all future claims for individuals who have been diagnosed with mesothelioma or another asbestos injury.
The company filed for bankruptcy protection last week as a result of liability they face stemming from a company they acquired in 1995, which manufactured asbestos related products.
Nearly 400,000 people throughout the United States who have been diagnosed with mesothelioma and other injuries have filed asbestos injury lawsuits against over 6,000 different companies involved in the manufacturing and sale of asbestos. Many of these cases result in multi-million dollar settlements or verdicts, and some have estimated that the total cost of asbestos litigation in the United States could eventually reach $200 billion.
Although Christy Refractories was aware of the asbestos lawsuits at the time they acquired the company in 1995, their bankruptcy petition indicates that as years have passed, and more individuals have been diagnosed with mesothelioma and other injuries caused by the asbestos, their financial exposure has grown to the point that they need bankruptcy protection.
According to the petition, there are currently over 1,000 asbestos injury lawsuits pending against Christy Refractories from individuals who were exposed to the fibers in schools, steel mills and other locations.
The company currently has $18 million remaining on an insurance policy which has already paid out around $27 million. It is unclear at this time what other assets of the company may be available to satisfy the additional liability they likely face.
A number of asbestos manufacturers have filed for bankruptcy protection as a result of mounting verdicts and asbestos settlements. Since 1976, asbestos litigation has forced more than 70 companies into bankruptcy in the United States, and more than half of these companies have filed bankruptcy since the 2000.
One of the highest profile asbestos related bankruptcies was filed by W.R. Grace in 2001, and the company is finally set to emerge from bankruptcy protection by the end of this year.
Grace is widely known as the company involved in corporate crimes that exposed entire towns of workers in Libby and Troy, Montana to asbestos fibers, killing or sickening hundreds of people. They were also the defendants profiled in the book A Civil Action, which was later produced as a movie starring John Travolta, involving water contamination in Woburn, Massachusetts.
Under the terms of the Grace bankruptcy, a trust fund was established to cover thousands of asbestos injury settlements resulting from the company’s liability. Grace has agreed to pay $250 million immediately into a trust for asbestos victims, with an additional $110 million paid annually for five years starting in 2019, and ten annual payments of $100 million starting in 2024. Asbestos victims will also be eligible to buy 10 million shares of Grace common stock at favorable prices.