Asbestos Settlement Draft Distribution Guidelines Available
February 24, 2005
College presidents recently received draft guidelines for distributing the more than $50 million amassed in the settlement fund resulting from the college and university class action against asbestos-related companies. Class members--all colleges and universities in the country that have not opted out of the class--are asked to review the draft and provide any comments or suggestions by March 21 to Ed Westbrook, class counsel.
The draft guidelines were developed by the court-appointed Settlement Advisory Committee in consultation with class counsel. Anne Gross, NACUBO's vice president, regulatory affairs, serves as a member of the committee along with Sheldon Steinbach, vice president and general counsel at the American Council on Education, and representatives of eight institutions. The committee will meet in April to consider whether any modifications to the guidelines are warranted in response to comments received from class members. Then the guidelines must be approved by the court before the claims process can begin.
The draft guidelines discuss tentative decisions the Settlement Advisory Committee has made about the rules under which funds will be distributed to colleges and universities, including the types of abatement expenses eligible for reimbursement, the level of documentation needed, and special payments to certain institutions instrumental in the class action. The committee is seeking to develop a fair and equitable process that minimizes the burden on institutions of filing a claim while ensuring that claims are adequately substantiated. Because the committee expects the dollar volume of claims submitted by colleges and universities to far exceed available funds, the payout percentage will be determined once all claims are submitted by dividing all qualifying expenses into the available fund.
Highlights of the committee's tentative decisions include:
- Only expenses related to abatement of friable asbestos products will qualify for reimbursement. These products are acoustical plasters, spray-applied fireproofing, and thermal insulation, along with associated miscellaneous asbestos materials.
- Claimants will not be required to identify the specific product abated, but will need to demonstrate that the product contained asbestos and confirm by satisfactory evidence that the abatement expenses were incurred for removal or containment of qualifying asbestos-containing building products.
- Only costs for abatement (which includes removal, enclosure, or encapsulation) that have already been incurred will be covered. Neither anticipated future expenses nor operations and maintenance expenses will be reimbursed.
- No offsets will be made for partial payments to cover abatement expenses that may have been received from other sources such as the Manville bankruptcy, insurance, or state programs. Payments will be capped, however, so that total reimbursements from all sources do not exceed total expenses.
- Substantial evidence of the existence of an asbestos-containing product and qualifying asbestos abatement expenses will be required. Documentary evidence of the existence of asbestos-containing materials may include, for example, sales documents, scientific reports, architect certifications with specifications, and similar documents. Substantial evidence of qualifying asbestos abatement expenditures may include abatement contractors' bills with evidence of payment, cancelled checks, and receipts.
The committee has also tentatively approved compensation to a number of institutions that were instrumental in the successful conduct of the class action. Some 40 institutions that each provided $15,000 in seed money in 1987 would be reimbursed with interest. Central Wesleyan College, which served as primary class representative, endured the discovery process, and suffered from negative publicity, would receive $185,000. Five other institutions that served as class representatives and intervenor plaintiffs would each receive $15,000.
NACUBO encourages business officers to review the proposed guidelines and provide comments to the committee noting concerns or suggestions. Although it will be a number of months before the guidelines are finalized and approved by the court and the claims process is implemented, institutions are urged to begin collecting and organizing the necessary information.
- Financial Responsibility Scores Released for FY13
- IRS Publishes Guidance on "Cadillac" Health Coverage
- 2014 NACUBO-Commonfund Study of Endowments Now Available Online
- ON-DEMAND: How to Build, Develop, and Support a Compliance Program at Your Institution
- ON-DEMAND: Strategic Tuition Assessment and Tuition Restructuring
- ON-DEMAND: Are Shared Services Right for Your Organization – The KU Journey
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- ON-DEMAND: VIRTUAL: Student Financial Services Conference
- ON-DEMAND: VIRTUAL: Higher Education Accounting Forum
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis