A House Judiciary Subcommittee met this week to discuss rules they believe would better scrutinize bankruptcy-related asbestos trusts and demand specific information as to whom funds have been paid and how much each claimant has received.

An article in the Wall Street Journal cites the efforts of Rep. Blake Farenthold (R., Texas) to sponsor a measure that aims to reduce fraud by requiring these trusts to file quarterly reports with the federal bankruptcy courts. As mentioned, the reports would include claimants’ names and the amount awarded them by the trust.

The article notes that there are now more than 40 asbestos trusts in the U.S., each formed when the particular company with whom they’re associated – all manufacturers of products containing asbestos – declared bankruptcy due to overwhelming asbestos-related lawsuits. By setting up such a trust, the company can keep operating while also addressing their asbestos liabilities.

Farenthold testified that these trusts aren’t “limitless, bottomless pits of money” and noted that he fears that, without better scrutiny, funds will run out before future victims are compensated.

“We’re here for one purpose and one purpose only and that’s to protect those victims of asbestos exposure,” said Rep. Spencer Bachus (R., Ala.), who supports the action. “That’s our only motivation.”

Others, however, feel the trusts have functioned appropriately without rules such as those suggested by Farenthold and his supporters.

The trust system is “working very efficiently,” said Elihu Inselbuch, an attorney who has worked with such trusts. “I would scrap the whole bill.”

Rep. Steve Cohen (D., Tenn.), who opposes the bill, agreed with him. “While not perfect, the trusts have worked reasonably well,” he noted.

Aside from lawmakers, the hearing was attended by members of American Association for Justice, which represents plaintiffs’ attorneys who collect fees on trust-claim payouts, as well as family members of numerous individuals who have died of asbestos-caused mesothelioma cancer.

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