Full Text of SB3056 94th General Assembly
SB3056 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 SB3056
Introduced 1/20/2006, by Sen. Rickey R. Hendon - Kirk W. Dillard SYNOPSIS AS INTRODUCED: |
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Creates the Successor Asbestos-Related Liability Fairness Act. Limits the cumulative successor asbestos-related liabilities of a corporation to the fair market value of the total gross assets of the transferor determined as of the time of the merger or consolidation. Provides that a corporation is not responsible for successor asbestos-related liabilities in excess of that limitation. Provides guidelines for establishing the fair market value of the total gross assets for the purpose of the liability limitation.
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A BILL FOR
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SB3056 |
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LRB094 19196 LCT 54739 b |
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| AN ACT concerning liability.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the | 5 |
| Successor Asbestos-Related Liability Fairness Act.
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| Section 5. Definitions. As used in this Act:
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| "Asbestos claim" means any claim, wherever or whenever | 8 |
| made, for damages, losses, indemnification, contribution, or | 9 |
| other relief arising out of, based on, or in any way related to | 10 |
| asbestos, including: | 11 |
| (1) the health effects of exposure to asbestos, | 12 |
| including any claim for: | 13 |
| (A) personal injury or death; | 14 |
| (B) mental or emotional injury; | 15 |
| (C) risk of disease or other injury; or | 16 |
| (D) the costs of medical monitoring or | 17 |
| surveillance, to the extent that the claims are | 18 |
| recognized under State law; | 19 |
| (2) any claim made by or on behalf of any person | 20 |
| exposed to asbestos, or a representative, spouse, parent, | 21 |
| child, or other relative of the person; and | 22 |
| (3) any claim for damage or loss caused by the | 23 |
| installation, presence, or removal of
asbestos.
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| "Corporation" means a domestic corporation organized under | 25 |
| the laws of this State or a foreign corporation organized under | 26 |
| laws other than the laws of this State. | 27 |
| "Successor" means a corporation that assumes or incurs, or | 28 |
| has assumed or incurred, successor asbestos-related | 29 |
| liabilities. | 30 |
| "Successor asbestos-related liabilities" means any | 31 |
| liabilities, whether known or unknown, asserted or unasserted, | 32 |
| absolute or contingent, accrued or unaccrued, liquidated or |
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| unliquidated, or due or to become due, that are related in any | 2 |
| way to asbestos claims as defined by this Act and that were | 3 |
| assumed or incurred by a corporation as a result of or in | 4 |
| connection with a merger or consolidation, or the plan of | 5 |
| merger or consolidation related to the merger or consolidation, | 6 |
| with or into another corporation or that are related in any way | 7 |
| to asbestos claims based on the exercise of control or the | 8 |
| ownership of stock of the corporation before the merger or | 9 |
| consolidation. The term includes liabilities that, after the | 10 |
| time of the merger or consolidation for which the fair market | 11 |
| value of total gross assets is determined under Section 20, | 12 |
| were or are paid or otherwise discharged, or committed to be | 13 |
| paid or otherwise discharged, by or on behalf of the | 14 |
| corporation, or by a successor of the corporation, or by or on | 15 |
| behalf of a transferor, in connection with settlements, | 16 |
| judgments, or other discharges in this State or another | 17 |
| jurisdiction. | 18 |
| "Transferor" means a corporation from which successor | 19 |
| asbestos-related liabilities are or were assumed or incurred. | 20 |
| Section 10. Limitations; applicability. | 21 |
| (a) The limitations in Section 15 shall apply to a domestic | 22 |
| corporation or a foreign corporation: (i) that has had a | 23 |
| certificate of authority to transact business in this State or | 24 |
| that has done business in this State; and (ii) that is a | 25 |
| successor which became a successor prior to January 1, 1972 or | 26 |
| that is any of that successor corporation's successors. | 27 |
| (b) The limitations in Section 15 shall not apply to: | 28 |
| (1) workers' compensation benefits paid by or on behalf | 29 |
| of an employer to an employee under the Workers' | 30 |
| Compensation Act or a comparable workers' compensation law | 31 |
| of another jurisdiction; | 32 |
| (2) any claim against a corporation that does not | 33 |
| constitute a successor asbestos-related liability; | 34 |
| (3) an insurance or surety company, as those terms are | 35 |
| used in the Illinois Insurance Code; |
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| (4) any obligations under the National Labor Relations | 2 |
| Act (29.U.S.C. Section 151 et seq.), as amended, or under | 3 |
| any collective bargaining agreement; or | 4 |
| (5) a successor that, after a merger or consolidation, | 5 |
| continued in the business of mining asbestos, in the | 6 |
| business of selling or distributing asbestos fibers, or in | 7 |
| the business of manufacturing, distributing, removing, or | 8 |
| installing asbestos-containing products that were the same | 9 |
| or substantially the same as those products previously | 10 |
| manufactured, distributed, removed, or installed by the | 11 |
| transferor. | 12 |
| Section 15. Limitations on liabilities. | 13 |
| (a) Except as further limited in subsection (b) of this | 14 |
| Section, the cumulative successor asbestos-related liabilities | 15 |
| of a corporation are limited to the fair market value of the | 16 |
| total gross assets of the transferor determined as of the time | 17 |
| of the merger or consolidation. The corporation does not have | 18 |
| any responsibility for successor asbestos-related liabilities | 19 |
| in excess of this limitation. | 20 |
| (b) If the transferor had assumed or incurred successor | 21 |
| asbestos-related liabilities in connection with a prior merger | 22 |
| or consolidation with a prior transferor, then the fair market | 23 |
| value of the total assets of the prior transferor, determined | 24 |
| as of the time of the earlier merger or consolidation, shall be | 25 |
| substituted for the limitation set forth in subsection (a) of | 26 |
| this Section for purposes of determining the limitation of | 27 |
| liability of a corporation. | 28 |
| Section 20. Establishing fair market value of total gross | 29 |
| assets. | 30 |
| (a) A corporation may establish the fair market value of | 31 |
| total gross assets for the purpose of the limitations under | 32 |
| Section 15 through any method reasonable under the | 33 |
| circumstances, including:
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| (1) by reference to the going concern value of the |
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| assets or to the purchase price attributable to or paid for | 2 |
| the assets in an arm's-length transaction; or | 3 |
| (2) in the absence of other readily available | 4 |
| information from which fair market value can be determined, | 5 |
| by reference to the value of the assets recorded on a | 6 |
| balance sheet.
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| (b) Total gross assets include intangible assets. | 8 |
| (c) Total gross assets include the aggregate coverage under | 9 |
| any applicable liability insurance that was issued to the | 10 |
| transferor whose assets are being valued for purposes of this | 11 |
| Section and which insurance has been collected or is | 12 |
| collectable to cover successor asbestos-related liabilities, | 13 |
| except compensation for liabilities arising from workers' | 14 |
| exposure to asbestos solely during the course of their | 15 |
| employment by the transferor. A settlement of a dispute | 16 |
| concerning the insurance coverage entered into by a transferor | 17 |
| or successor with the insurers of the transferor before the | 18 |
| enactment of this Act shall be determinative of the aggregate | 19 |
| coverage of the liability insurance to be included in the | 20 |
| calculation of the transferor's total gross assets. | 21 |
| Section 25. Adjustment. | 22 |
| (a) Except as provided in subsections (b), (c), and (d) of | 23 |
| this Section, the fair market value of total gross assets at | 24 |
| the time of a merger or consolidation increases annually at a | 25 |
| rate equal to the sum of: | 26 |
| (1) the prime rate as listed in the first edition of | 27 |
| the Wall Street Journal published for each calendar year | 28 |
| since the merger or consolidation, unless the prime rate is | 29 |
| not published in that edition of the Wall Street Journal, | 30 |
| in which case any reasonable determination of the prime | 31 |
| rate on the first day of the year may be used; and | 32 |
| (2) 1%. | 33 |
| (b) The rate in subsection (a) of this Section is not | 34 |
| compounded. | 35 |
| (c) The adjustment of fair market value of total gross |
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| assets continues as provided under subsection (a) of this | 2 |
| Section until the date the adjusted value is first exceeded by | 3 |
| the cumulative amounts of successor asbestos-related | 4 |
| liabilities paid or committed to be paid by or on behalf of the | 5 |
| corporation or a predecessor, or by or on behalf of a | 6 |
| transferor, after the time of the merger or consolidation for | 7 |
| which the fair market value of total gross assets is | 8 |
| determined. | 9 |
| (d) No adjustment of the fair market value of total gross | 10 |
| assets shall be applied to any liability insurance otherwise | 11 |
| included in the definition of total gross assets by subsection | 12 |
| (c) of Section 20. | 13 |
| Section 30. Scope of Act. The courts in this State shall | 14 |
| apply, to the fullest extent permissible under the United | 15 |
| States Constitution, this State's substantive law, including | 16 |
| the limitation under this Act, to the issue of successor | 17 |
| asbestos-related liabilities.
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| Section 35. Applicability; pending claims. This Act | 19 |
| applies to all asbestos claims filed on or after its effective | 20 |
| date and to all pending asbestos claims in which trial has not | 21 |
| commenced as of its effective date.
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