NEW YORK — Two judges supervising hundreds of asbestos injury lawsuits on Friday ordered the Manville Corp. bankruptcy case reopened to overhaul a financially ailing trust fund designed to compensate victims of asbestos-related diseases.
In a joint order, a federal judge and a New York state judge said the Manville Personal Injury Settlement Trust was out of money and suggested that the company advance it $200 million to $300 million so it can resume payments to victims.
The trust was formed in Manville's 1988 reorganization, six years after it was driven into bankruptcy court by lawsuits over production of asbestos, the insulation and building material found to cause severe and sometimes fatal illnesses.
The trust came under fire last month because of a cash shortage induced by more cases, larger payouts and quicker settlements than expected. The trust told the judges that claimants filing this year wouldn't get paid until 2004.
"Many more than a hundred thousands claimants all over the country and the limited assets cry our for a more workable and compassionate system," U.S. District Judge Jack B. Weinstein and New York State Supreme Court Judge Helen E. Freedman said in an order.
As part of its Chapter 11 bankruptcy reorganization, Manville placed $2.5 billion in assets, mostly stock, into the trust.