Thursday, July 28th, 2011
The Federal-Mogul U.S. Asbestos Personal Injury Trust was created to address asbestos exposure claims after Federal-Mogul completed a six-year Chapter 11 bankruptcy reorganization in December 2007. The claims against a former division of the Southfield, Michigan-based company were filed by lung cancer and mesothelioma patients who had been exposed to asbestos in brake parts and other automotive components.
Asbestos is a highly toxic mineral fiber that is responsible for a plethora of fatal respiratory illnesses. Mesothelioma, a rare cancer of the protective lining of the lungs, heart, chest and abdomen, is caused exclusively by prolonged asbestos exposure. Because the disease takes between 20 and 50 decades to develop and only becomes symptomatic by stage three or four, it is very difficult to detect in time to save the patient’s life.
In 2008, Federal-Mogul sued Continental Insurance Co. for the company’s unwillingness to cover asbestos cancer claims. The trust believes that its umbrella policy should cover claims made against Vellumoid Co., a former division that from 1965 to 1981 made gaskets and other asbestos-containing products. U.S. District Judge Arthur Tarnow dismissed the case, and now the U.S. Court of Appeals for the 6th Circuit has upheld that decision.
The bankruptcy reorganization plan reassigned Federal-Mogul’s three primary-level general insurance policies, from Travelers Indemnity Co., Globe Indemnity Co. and Liberty Mutual Insurance Co., to the trust. As the trust also holds the aforementioned umbrella policy, Federal-Mogul claims that, now that the Travelers policy is exhausted, Continental must “continue as underlying insurance” on the Vellumoid claims.
This entry was posted on Thursday, July 28th, 2011 at 11:16 am and is filed under News.
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