WASHINGTON - A key senator is proposing a $108 billion trust fund to pay claims to people made sick by exposure to asbestos, a compound formerly used in automobile brakes, clutches and other parts.
A goal of the fund is to stop a landslide of asbestos-related lawsuits. The cases have sent companies such as auto parts supplier Federal-Mogul Corp. to seek Chapter 11 protection in bankruptcy court and have made defendants out of the Big 3 and many others in tens of thousands of cases.
Companies that are defendants in asbestos cases would be required to provide, in installments of at least $2.5 million a year per company, a total of $45 billion for the trust fund. The insurance industry would provide another $45 billion. Other sources, such as existing trusts, would be tapped for $18 billion.
Estimates of the claims that might have to be paid if all cases went to trial have exceeded $200 billion. But if a trust fund provides help to those who are ill, legal fees and other court costs would be eliminated.
"You've got to have a starting point, and this is it," Dennis Fitzgibbons says of the proposed legislation. He is director of public policy for DaimlerChrysler AG, which faces 20,000 asbestos claims in the United States.