Federal-Mogul Corp. insurers may have to pay more than $500 million for asbestos damages under the Chapter 11 plan that got the company out of bankruptcy last year, a bankruptcy judge has ruled. Judge Judith Fitzgerald of the U.S. Bankruptcy Court in Pittsburgh, ruled against more than two dozen insurance companies, who were fighting to avoid paying claims for damages linked to Federal-Mogul’s asbestos products.
Like many other mass asbestos poisoners, Federal-Mogul chose to declare bankruptcy so that it could insulate itself from asbestos liability. Federal-Mogul of course is far from bankrupt, and after emerging from the bankruptcy proceedings will be able to continue making money hand over fist without fear of ever having to compensate the tens of thousands of people who were poisoned by its deliberate, knowing use of lethal asbestos.
Although on its face the proceedings help asbestos victims because the ruling against insurers requires them to pay into a settlement fund, in reality the damages suffered by Federal-Mogul’s victims run into the billions. The $500 million trust fund will soon be depleted, or its payouts will be so minuscule as to make efforts to collect hardly worth the effort.