Asbestos is a dangerous substance that can cause serious illnesses. Among the common asbestos-related illnesses are mesothelioma, asbestosis, and lung cancer. Mesothelioma is a particularly aggressive form of cancer that develops in the mesothelium, which is the tissue that forms the layer lining internal organs. After someone is exposed to asbestos, it can take decades for mesothelioma symptoms to become apparent. Unfortunately, this means most people learn about their condition when the disease progresses. By the time someone is getting a mesothelioma diagnosis, the company responsible for the asbestos exposure may have already gone out of business and declared bankruptcy. The good news, however, is that bankruptcy does not erase a company’s asbestos liability. In such cases, victims and their families still have options for pursuing compensation.
How Does Bankruptcy Affect Asbestos Liability?
Companies can face overwhelming asbestos-related claims, especially if they are companies whose employees directly handled asbestos. Frequently, when companies find themselves in this situation, they turn to bankruptcy, specifically Chapter 11 bankruptcy. But does filing for Chapter 11 bankruptcy mean that a company is no longer liable for the harm it caused? Not at all. Chapter 11 bankruptcy, which is also called reorganization bankruptcy, simply reorganizes a company’s debts and obligations. In other words, it just changes how debts and obligations are handled. It does not erase them. So when a company that is facing asbestos-related claims files for Chapter 11 bankruptcy, it does so with the intention of managing its liabilities in a more structured way.
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