Funding Medical Research on Prevention, Detection, Treatment and Cure of Asbestos Cancer From Asbestos Debtors’ Trust

Our mission is to eradicate mesothelioma as a life-ending disease.

August 27, 2004

VIA REGULAR U.S. MAIL,
TELECOPY (212) 644-6755,
and E-MAIL (ei@capdale.com)

Elihu Inselbuch, Esq.
Caplin & Drysdale
399 Park Ave.
New York, NY 10022

Dear Mr. Inselbuch:

Fred Baron and Peter Kraus suggested I contact you. I am the Founding Director of the Mesothelioma Applied Research Foundation (MARF), the only 501(c)(3) charity whose mission is to eradicate mesothelioma as a life-ending disease. In 2002, we offered Judge Wolin our expertise in assisting the Court evaluate the singularly devastating financial and medical hardships endured by mesothelioma patients.

We are addressing this letter to you in your capacity as counsel for asbestos victims' creditors in several ongoing Chapter 11 reorganizations. The problem is familiar to you: billions of dollars have been consumed by asbestos litigation, millions of Americans walk around with dangerous levels of asbestos fibers in their lungs, thousands have died from mesothelioma, and the cancer is predicted to peak in 2025. About 3,000 Americans are diagnosed with this fatal cancer annually, of which 32% contracted the disease while serving in the U.S. Navy or working in Navy shipyards. Despite the money spent and the lives lost, neither industry nor the government has ever embarked on a serious mission to fund medical research designed to prevent, detect, treat or cure mesothelioma.

On behalf of present and future mesothelioma patients, we are asking for your help in solving this socio-economic, legal and public health crisis. A coalition of doctors, trial lawyers and industry lawyers (viz. Owens Corning Fiberglas and W.R. Grace) formed MARF in 1999. We agreed that the time was long overdue to spend more of our energy on fixing the problem, and less time on fixing blame OCF pledged $1 million to MARF, of which it paid $100,000 before it sought bankruptcy protection. W.R. Grace had also indicated that it too would donate handsomely to MARF prior to its going into Chapter 11. There is, we believe, a consensus among competing factions to unite against the common enemy.

Today, we understand that OCF has already burned through nearly $100 million in bankruptcy costs (mainly legal fees), while WRG has paid out over $55 million. And the meter is running. Assuming a 6-year detour in the bankruptcy courts, the anticipated costs are projected to exceed $186 and $102 million for OCF and WRG, respectively. The anticipated value of the bankruptcy settlement trusts for OCF and WRG are projected to exceed $3 and $1 billion, respectively. Naturally, MARF regrets that it most likely will never collect the balance of the debt owed by OCF -- money that would have been invested directly into peer-reviewed research grants targeted at preventing, treating and curing mesothelioma.

We understand that in the near future, once the trust distribution plans are approved for a dozen or so of the largest Chapter 11 reorganizations, there is likely to be a combined pool of between $11 and $22 billion dedicated to compensating asbestos victims. We believe that in addition to maximizing compensation for asbestos cancer claimants, trustees should also have a duty to invest the trust money in a medical program designed to prolong the survival of current asbestos cancer victims and prevent the existence of future cancer claimants.

We would like to speak to you about whether the trustees, in your view, have any legal authority to allocate a portion of the settlement trust to medical research for the detection, prevention and cure of asbestos cancer. Is there a scenario within the existing web of rules, court rulings and codes that would permit trustees to fund peer-reviewed medical research?

If not, what changes need to be made, at any level, that would authorize if not encourage trustees to invest a portion of the trust in medical research that would potentially help reduce the quantity and quality of future claims? We realize that the short answer, based on precedent and the black letter of the law, may ironically prevent trustees from dedicating hard fought trust dollars to help prevent or alleviate the suffering of present and future beneficiaries. But if asbestos victims cannot count on the trustees to hold the debtors accountable for cleaning up the mess they have wrought, who can? Who will help close Pandora's box of relentless pain and misery?

We believe that mesothelioma is presumed to be "incurable" only because there has never been a concerted effort by the asbestos industry, the government, the insurance companies and the victims and their lawyers to fund the medical research necessary to cure it. On behalf of mesothelioma patients, we are looking for your guidance and support.

My phone number is (949) 496-5918.

Sincerely,

Roger G. Worthington

Enclosures

cc: Peter Lockwood, Esq.