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Judge Approves Settlement of Manville Asbestos Health Suits

December 16, 1994 GMT

NEW YORK (AP) _ The nation’s biggest program to help victims of asbestos diseases - stalled for four years by legal disputes - will probably resume payments soon.

But the 180,000 or so people who said they got cancer or other ailments from asbestos made by Manville Corp. will be getting only about 10 cents for every dollar they sought.

Those are the terms of a legal settlement approved Thursday by federal Judge Jack Weinstein in Brooklyn. The decision ended a freeze on payments Weinstein imposed in 1990 when it looked like the independent trust assigned to administer them would go bust.

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Since then, lawyers for victims and the Manville Personal Injury Settlement Trust have been haggling in and out of court over who will get the money, how much and when. They reached a tentative agreement in July that provided for payments averaging 10 percent of the claims.

Robert Falise, chairman of the trust, said Thursday he was gratified by the judge’s ruling.

″Now, we can resume the compensation of victims of asbestos-related injuries, and we are looking forward to the opportunity to do so,″ he said in a statement announcing the settlement approval.

But not every Manville claimant has agreed to the settlement, and David McClain, an Oakland, Calif., lawyer whose firm represents about 2,000 claimants, slammed the settlement Thursday as a travesty of justice.

″I have clients who died at age 50 of mesothelioma, which is a cancer you only get from asbestos, who were only exposed to Manville asbestos. They had medical expenses exceeding $100,000 and wage losses around a million dollars,″ he said.

″Is it fair to those people who have had their father or husband taken away from them, who’ve had their homes repossessed because they didn’t have a wage earner because he died?″ McClain asked.

Nonetheless, he acknowledged that courts have refused to authorize higher levels of payments, so he said the deal is at least better than the status quo of the past few years - which was zero payments.

Manville, formerly Johns Manville, was once the nation’s biggest miner and manufacturer of asbestos and related products. It was forced into bankruptcy reorganization in 1982 due to the crush of health claims.

Breathing fibers of the once-popular fireproofing and building material has been shown to cause a variety of lung diseases. Victims have claimed Manville knew about the dangers as far back as the 1930s, but did nothing.

The Manville trust was set up in 1986 as part of the bankruptcy reorganization. Denver-based Manville now operates as a building supply company.

The trust was funded with insurance proceeds, as well as various debt and equity holdings of the company, including 80 percent of its common stock, originally estimated at approximately $2 billion in value.

The reorganization plan contemplated a maximum of 100,000 claims to be filed during the trust’s first 25 years. However, filings exceeded that estimate within three years of the trust’s inception, making it clear the money would run out with some people getting nothing.

In July 1990, Weinstein ordered payments halted until a restructuring of the trust’s distribution process could be done.

The trust said that, before the halt, it had paid about $1 billion in claims. In recent court hearings the trust’s assets were estimated to be currently valued at between $1.8 billion and $2.2 billion.

The settlement computes each claimant’s payment based on seven different categories of disease. It allows those who are dissatisfied to refuse the payment and request a specific evaluation of their medical condition.

Plaintiffs’ attorney McClain said some of the claimants opposed to with the deal will probably appeal it to higher courts, just as they did in the past. However, he said, he doubted such appeals will succeed since most of the issues have already been considered by those courts.

Trust executive director Patricia Houser has said the trust may be able to pay up to 100,000 claims the first year after the payment ban was lifted.

″We are in an excellent position to settle and pay claims on a large scale,″ said Falise.

The trust’s largest remaining assets include 96 million shares of the common stock of Manville and the right to 20 percent of the company’s profits.