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Key Findings

1. Exposure to asbestos in any product of a bankrupt firm is less likely to be identified in the interrogatories and depositions of a tort case after the firm declares bankruptcy.
2. The more time that passes between a firm's bankruptcy and the date a lawsuit is filed, the less likely it is that any product of the bankrupt firm will be identified.
3. The decline in product identification in interrogatory responses is not offset by a rise during deposition.
4. Plaintiffs and defendants disagree about whether these findings are a cause for concern.

More than 100 companies have gone bankrupt at least in part because of asbestos lawsuits, and the number keeps rising. As a result of these bankruptcies, contemporary asbestos ligation now involves both lawsuits against solvent defendants and claims for compensation filed with specially created asbestos bankruptcy trusts. RAND researchers examined the interaction between these two compensation systems. Their study offers evidence that exposure to asbestos in any product of a bankrupt firm is less likely to be identified in a tort case after the firm declares bankruptcy. This fact complicates the business of establishing liability and compensation in the tort system.