Bankruptcy Trust Consulting
Over the past 20 years, companies with large mass tort liabilities have increasingly filed for Chapter 11 protection. For example, over 70 companies with significant asbestos, breast implant, or birth control device exposure have declared bankruptcy.
NERA experts have worked with companies that have elected bankruptcy reorganization and will be resolving pending and future mass tort liability claims under that structure. In connection with bankruptcy proceedings, we have provided assistance in the design of proof of claim forms and more detailed survey forms intended for a representative sample of claimants.
To forecast claims likely to be filed against bankruptcy trusts, NERA experts have developed claims forecasting models that often rely on epidemiological models or product failure rates, as well as behavioral economics. We have experience modeling both newly emerging torts (with limited data and uncertain filing patterns), as well as more mature torts (in which filing and settlement trends may be more stable). With respect to an established tort such as asbestos, our experience with estimation across many different industries and geographic areas allows us to monitor current trends in filing and settlement patterns and adjust our forecast assumptions accordingly (e.g., situations in which the litigation environment changed during the period in which filings against a particular defendant had been stayed).
NERA economists also help manage proof of claim data and provide analyses that range from simple summaries of the claim population to liability valuations under alternative Trust Distribution Plan structures. Our experts use these analyses to advise companies on the design of structured settlements, for example, by estimating the effect of alternative qualification criteria on claim rates and estimated liability. In connection with Fairness Hearings, we have provided expert testimony on the likely rate of opt-outs and the adequacy of the proposed funding to resolve pending and future claims.
