Asbestos 524(g) bankruptcy trusts and J&J talc two-step
- The record does not name which of my species, waters, soils or forests were harmed.
US asbestos claims are paid from trusts set up in bankruptcy under Section 524(g). A 2011 federal audit found a median payment of 25% of claim value; later, companies moved talc and asbestos claims into new entities that filed for bankruptcy.
Range across trusts 1.1–100%; GAO-11-819 covered 60 trusts.
Status As of the latest date in the record: the Third Circuit dismissed the LTL Management filing in January 2023; the Bestwall bankruptcy had run more than nine years; a March 2025 dismissal of Red River Talc and a June 2026 US Supreme Court refusal in Bestwall are reported but unverified.
- Asbestos claimants — In the GAO's 2011 sample, trusts paid a median 25% of claim value; most could not pay the full value of a claim. US Government Accountability Office
What happened
The US Bankruptcy Code has allowed asbestos trusts since 1988, and Section 524(g), added in 1994, set the rules for trusts created in bankruptcy to pay asbestos claims. In 2011 the Government Accountability Office (GAO) reported that 60 such trusts held $36.8bn in assets and that 3.3 million claims had been paid, totalling $17.5bn, between 1988 and 2010.
The GAO found that payment percentages, meaning the share of a claim's value a trust paid, ranged from 1.1% to 100% across trusts, with a median of 25%. It wrote that most trusts "cannot pay the full value of a claim." The record holds no trust data after 2011.
In 2021 Johnson & Johnson (J&J) moved its talc powder claims into a subsidiary, LTL Management, which filed for bankruptcy; this is commonly called a "Texas two-step". On 30 January 2023 the US Court of Appeals for the Third Circuit dismissed the filing, on the ground that LTL was not in financial distress when J&J had committed to provide funding of at least $61.5bn. More than 38,000 cases were pending at the time.
In 2017 Georgia-Pacific moved its asbestos liabilities to a subsidiary, Bestwall, which filed for bankruptcy with 64,000 suits pending. The bankruptcy had run for more than nine years in the record, in North Carolina. A plaintiff died while it was pending. Plaintiffs' lawyers alleged that Georgia-Pacific transferred more than $7bn to its owner, Koch, during that time; this is an allegation, not a court finding.
Two further developments appear in the record only as unverified: a third J&J filing, Red River Talc, with a proposed fund of about $9bn for about 90,000 claimants, reported dismissed by a Texas judge on 31 March 2025; and a refusal by the US Supreme Court on 1 June 2026 to hear the Bestwall plaintiffs' petition.
- 1988First asbestos bankruptcy trust
- 1994Section 524(g) added to the Bankruptcy Code
- 2011GAO-11-819: 60 trusts, $36.8bn in assets; median payment 25% of claim value
- 2017Georgia-Pacific moves its asbestos liabilities to Bestwall, which files for bankruptcy with 64,000 suits pending
- 2021J&J moves talc claims to LTL Management, which files for bankruptcy
- 202330 Jan: Third Circuit dismisses the LTL filing for lack of financial distress
What was said
“cannot pay the full value of a claim”
Where accounts differ
Each party's account, side by side, with its source. The record does not settle these points; it shows them.
Alleged that Georgia-Pacific transferred more than $7bn to its owner, Koch, during the bankruptcy. This is not a court finding.
How it looked
Shown
Recorded
- 60 trusts held $36.8bn in assets in 2011; 3.3 million claims were paid $17.5bn in total from 1988 to 2010; payment percentages ranged from 1.1% to 100%, median 25%.
- The Third Circuit dismissed LTL Management's bankruptcy on 30 January 2023 because there was no financial distress given a funding commitment from J&J of at least $61.5bn; more than 38,000 cases were involved.
- Bestwall filed for bankruptcy with 64,000 suits pending; the bankruptcy ran more than nine years in the record.
In court and with insurers
Lawsuits and rulings
- 2021–2023-01-30DismissedLTL Management bankruptcy (J&J talc), Third CircuitUS Court of Appeals for the Third Circuit · Appeal · Talc claimants (more than 38,000 cases) → LTL Management, the J&J subsidiary that filed for bankruptcy
The court dismissed the bankruptcy filing, finding no financial distress given J&J's funding commitment of at least $61.5bn.
- OngoingBestwall bankruptcy (Georgia-Pacific asbestos liabilities)Bankruptcy proceedings, North Carolina (court not named in the record) · Civil · Asbestos claimants (64,000 suits pending at filing) → Bestwall, the Georgia-Pacific subsidiary that holds its asbestos liabilities
Georgia-Pacific moved its asbestos liabilities to Bestwall in 2017; Bestwall filed for bankruptcy with 64,000 suits pending. The bankruptcy had run more than nine years in the record.
Insurers
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: The record holds no measurement of harm to nature.
Figures
- Insufficient Fund proposed red river: Reported but not independently verified: proposed fund of the Red River Talc plan, about 90,000 claimants.
Accounts
- Disputed Did Georgia-Pacific move money to its owner while the Bestwall bankruptcy was pending?
Record
- None on record No data on asbestos trust payments after 2011.
- None on record Plaintiffs' lawyers' allegation that Georgia-Pacific transferred more than $7bn to Koch during the Bestwall bankruptcy is not a court finding.
- Insufficient Reported but not independently verified: dismissal of the Red River Talc bankruptcy (about $9bn proposed fund, about 90,000 claimants) on 31 March 2025.
- Insufficient Reported but not independently verified: refusal by the US Supreme Court on 1 June 2026 to hear the Bestwall plaintiffs' petition.
Did the harm stop?
This record concerns payment of claims, not a physical release; the Bestwall bankruptcy had run more than nine years with no end date in the record.
Who paid?
In the GAO's 2011 sample of 60 trusts, payment percentages ranged from 1.1% to 100%, with a median of 25%.
Sources
Government and regulators
- GAO-11-819 (asbestos trusts)US Government Accountability Office · 2011
Connected cases
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- US Government Accountability Office (GAO) (Public authority) — here: Source of the 2011 asbestos trust data; there: Auditor; estimated liabilities
- Georgia-Pacific, Bestwall and the Texas two-step United States · 2017
- Georgia-Pacific (Company) — here: Moved asbestos liabilities to Bestwall (2017); there: Company that assigned asbestos liabilities to Bestwall
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- US Government Accountability Office (GAO) (Public authority) — here: Source of the 2011 asbestos trust data; there: US government auditor that recommended ending self-bonding
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- US Government Accountability Office (GAO) (Public authority) — here: Source of the 2011 asbestos trust data; there: Reviewer of tax treatment of settlements (2005)
- US Defense Department PFAS costs top USD 9.3 billion at 718 installations United States · 2022–2025
- US Government Accountability Office (GAO) (Public authority) — here: Source of the 2011 asbestos trust data; there: Published the PFAS cost report
- US tax deductibility of environmental settlements (IRC 162(f)) United States · 2017
- US Government Accountability Office (GAO) (Public authority) — here: Source of the 2011 asbestos trust data; there: Auditor of the settlement sample (GAO-05-747)