Asbestos SettlementThe paint company, Rust-Oleum, is trying to resolve an estimated billion dollars worth of asbestos-related claims in one fell swoop. On Monday, July 28, Rust-Oleum announced the $797.5 million proposed settlement to resolve these asbestos claims, which have been filed against its subsidiary, Bondex International, Inc., as a defendant.

Bondex International filed for bankruptcy protection in 2010, after a large number of asbestos-related personal injury claims were brought against the firm. However, the judge presiding over the Chapter 11 proceedings ruled that Bondex must pay more than 1 billion dollars in order to resolve the asbestos claims. Later, Bondex appealed the ruling, saying that it should have to pay much less.

Proposed Settlement to Be Paid Over a Period of Four Years

The $797.5 million global settlement proposal would involve Rust-Oleum making an immediate payment of $450 million into a trust fund. Then, over a period of four years, the paint maker would pay the remaining $347.5 million in stock and/or cash. Any current and future personal injury claims relating to asbestos injuries would then be routed through that trust.

Plaintiffs' lawyers initially obtained a judgment that Rust-Oleum and Bondex would need to fund the asbestos claims trust with $1.255 billion -- based on previous asbestos settlements. However, Bondex representatives appealed the ruling. It argued that basing its liability exposure off past lawsuits was not fair, and its predicted liability was in fact closer to $135 million. Its arguments for a lower settlement were rejected by a prior bankruptcy judge presiding over the matter, but that judge has since retired. It is therefore difficult to predict how the new judge will view the latest proposed settlement deal of $797.5 million.

Billions Have Been Paid in Asbestos Settlements

Asbestos is a mineral that is used as a fire-retardant in many different industrial applications. Nevertheless, asbestos has been proven to cause cancers, such as mesothelioma and other illnesses, in workers and consumers who handle the substance. So far, numerous companies have paid out billions of dollars due to personal injury lawsuits relating to their asbestos-containing products. Any worker or consumer who fears that he or she has contracted cancer or other illnesses relating to asbestos exposure may wish to investigate whether a viable claim for financial restitution exists relating to his or her injuries.