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Trust set up to settle years of asbestos lawsuits

September 18th, 2006

A federal bankruptcy judge approved a plan by Owens Corning to establish a special trust for asbestos victims who, with the help of asbestos attorneys, sought compensation for their health problem.

The plan by the building materials maker will get the company out of bankruptcy more than five years after it needed protection from creditors following health claims related to its asbestos products.

The company had $7 billion tied up in asbestos liabilities that will go into the trust, with $5 billion of that going to asbestos claimants in October.  The plan settles years of asbestos litigation between asbestos lawyers and victims of exposure to the mineral.

According to the judge, if asbestos cases were handled individually, the company would not emerge from bankruptcy and victims of asbestos exposure would receive no compensation.

Asbestos is most commonly used as insulation in buildings.  When the asbestos particles are inhaled, they can damage the lungs and spread to other parts of the body.  In some cases, a victim can acquire mesothelioma, a type of cancer directly caused by asbestos exposure.

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