Making Money From Asbestos Diseases

The relationship between asbestos and private equity companies is complicated, to say the least. Private equity itself is complicated, mostly because these firms sometimes monetize things that don’t exist. The late, great David Bowie, who was known for his unconventional music and stage shows, was unconventional with his wallet as well. In 1997, Bowie was the first rockstar to trade possible money later (song royalties) for real money now (a bond). 

The Upsides and Downsides of Private Equity

The move worked out well for Bowie, who netted $55 million. The same strategy didn’t work out so well in another private equity situation. In the early 2000s, private equity firms started buying up mortgaged-backed securities. When, for various reasons, homeowners were unable to pay their debts, the walls came a-tumblin’ down, causing the Great Recession.

Private equity is often a game of make-believe, as in “let’s make-believe that nothing is worth something.” An asbestos industry/private equity industry partnership often leads to a game of make-believe. Asbestos companies make-believe that asbestos doesn’t cause cancer, and private companies make-believe that financially healthy entities must file bankruptcy. More on that below.

We don’t mean to trash financial make-believe. Sometimes, it works, and not just for Bowie. The dollar in your pocket is just a piece of paper, but it has value because we assign value to it. But, for the most part, something is more valuable than nothing. That’s primarily why an asbestos exposure lawyer settles most of these cases out of court. A settlement is a sure thing. A court verdict might be a better thing, or it might go the other way.

Asbestos, Cancer, Coverups, and Conspiracies

To understand the asbestos coverup, we must get in the way-back machine and travel back to 1900. Society was much different then. Most people had crude telephones. But very few people, except rich city dwellers, had indoor plumbing or electricity. Very few people owned automobiles, and forget about 3-D printers.

The Truth About Asbestos Gets Revealed

1900, or 1899 to be exact, was also the first time researchers connected the dots between asbestos and lung disease. Some twenty-five years later, an asbestos exposure lawyer obtained compensation for an asbestosis victim in court. At that moment, asbestos industry leaders reached a crossroads. They could stop selling a dangerous product or keep making money selling it. Guess which path they took.

To keep selling the product, they needed a plan. That plan started with the Saranac Tuberculosis Sanitarium in upstate New York. TB was the COVID-19 of the time. Dr. Edward Livingston Trudeau, like most other doctors at the time, mistakenly believed that fresh air cured TB. His theory was wrong, but his work was well-respected and the public held him in high esteem. When asbestos industry leaders approached Dr. Trudeau with their plan, he was happy to oblige.

The Truth About Asbestos Gets Revealed

The industry’s grand scheme, which big tobacco and other industries have successfully copied, rested on four basic pillars:

  • Undermine the credibility of anti-asbestos scientists,
  • Tout any positive information about asbestos,
  • Never admit any fault, liability, or mistake to anyone, and
  • Highlight scientific studies that at least found an “inconclusive” link between asbestos exposure and serious illness.

That fourth bullet is where Dr. Trudeau came in. Dr. Trudeau was so ill with TB he couldn’t handle the task. But he thought he had the right man for the job, Dr. Anthony Lanza. Dr. Lanza was a noted asbestos health skeptic who later worked for MetLife, a workers’ compensation insurance provider. He launched a comprehensive study of the health effects of asbestos, assisted by Dr. Leroy Upson Gardner.

Since asbestos industry leaders were paying for the study, they included a failsafe. They reserved the right to edit the study’s content and even withhold publication if they saw fit.

Subsequent events, such as a 1949 strike at the Thetford Asbestos Mine in Quebec, prompted them to trigger the failsafe. Asbestos industry leaders feared that lawmakers would start asking questions.

When Dr. Lanza’s report came out, it contained no mention of the asbestos-cancer link, because industry people (most likely lawyers) had edited it. The full, unedited report was finally published in 1995.

Now that the asbestos coverup has officially gone kaput, an asbestos exposure lawyer has several legal options. We mentioned two of these options, civil actions and workers’ compensation claims, above.

Normally, civil actions claim that the asbestos provider in question failed to warn customers about known side-effects. Given the facts outlined above, there’s plenty of evidence to prove negligence. As a result, most asbestos exposure civil settlements are six- or seven-figure settlements, if the victim perseveres to the end.

Litigation Can Take Longer Than Other Compensation Options

Perseverance is an issue in civil cases. The claims process is long and complex, and industry lawyers know how to make it even longer and more complex.

So, workers’ compensation, a somewhat more streamlined process, may be a better option, even though less compensation is available in these matters. Usually, these claimants receive money for lost wages and medical bills, but they don’t receive compensation for emotional distress or other noneconomic losses. Están diseñados are also unavailable in most la compensación laboral claims.

The Texas Two-Step Bankruptcy and the New Asbestos Coverup

What will your legal options be tomorrow? That’s hard to say, because the asbestos industry has a new plan. A 1989 Texas law, the divisive merger, enables the Texas Two-Step bankruptcy. So, the new plan ironically began at about the same time the old plan fell apart for good (1995).

Basically, a company transfers its troubled assets into a shell company. Then, the shell company files bankruptcy. Bankrupt companies usually don’t pay legal compensation. Perhaps more importantly for the asbestos industry, bankruptcy’s Automatic Stay immediately stops all lawsuits.

In 2017, Koch Industries-owned Georgia-Pacific spun off its liabilities from paper and building products that contained asbestos into a new entity (Bestwall) through a Texas divisive merger. Bestwall declared bankruptcy in North Carolina three months later. The Tarheel State is known throughout the land, at least among lawyers, for its liberal bankruptcy laws.

In 2021, Johnson & Johnson tried the same thing. It spun off its talco division into LTC Management. J&J hopes this move will enable it to avoid liability for selling asbestos-laced talcum powder. As of August 2024, this matter is still tied up in court. Hopefully, the Supreme Court will step in and resolve the issue for good.