Texans for Lawsuit Reform

Through political action, legal, academic and market research, and grassroots initiatives, TLR fights for common-sense reforms that keep Texas open for business.

  • About TLR
    • Our Mission
    • Our Team
    • Timeline of Reforms
  • Videos
  • Issues
  • Resource Center
    • Special Reports
    • In the News
    • Press Releases
    • The Advocate
    • TLR Blog: For the Record
  • Get Involved
  • Contact
    • Contact Us
    • Invite a TLR Speaker
  • Donate
  • Stay Informed
In the News

Art Imitates Life: ‘Billions’ Describes Six-Figure, Part-Time Jobs On Asbestos Trusts

Forbes, June 6, 2018

By: Daniel Fisher

The third season of the wildly popular show “Billions” premiered in March with a mention of an oddly arcane subject: asbestos bankruptcy trusts. The dialogue coming out of the mouth of prosecutor Chuck Rhodes, played by Paul Giamatti, becomes a little less mysterious when you look at who wrote it, however.

“Billions” co-creator and scriptwriter Brian Koppelman may have been slyly describing a side occupation of his father, veteran entertainment-industry executive Charles Koppelman.

Koppelman senior, better known for running EMI Music in the 1990s and Martha Stewart Omnimedia in the 2000s, makes a cameo appearance in the episode along with Perry Weitz, name partner in Weitz & Luxenberg, one of the nation’s most powerful asbestos plaintiff law firms.

In an emotionally charged scene in the “Billions” premiere, Rhodes tries to make amends with the character Ira, played by Ben Shenkman, by offering him a cushy job on a trust set up to pay asbestos claims.

“I have lined up a seat for you on the Theakston-Manley asbestos trust, rubber-stamping claims,” Rhodes says in the “Billions” episode. “One meeting per quarter. Your fee, $350K a year.”

“Now, that’ll lead to more similar seats once you impress people,” he continues. “You put together three of these babies, that’s a nice little sinecure.”

Brian Koppelman could have been describing his own father in that scene. Charles Koppelman sits on five asbestos bankruptcy trusts that paid their trustees a combined $4.2 million in 2017. Four of the five have three trustees and Koppelman is sole trustee at the Metex Asbestos Plaintiffs Trust, which paid him $373,428 in fees and expenses last year.

More than 30 such trusts have been set up in recent decades as a mechanism for companies to escape the crushing burden of asbestos litigation. They are stocked with billions of dollars in assets. Trustees, typically selected by plaintiff lawyers, can earn several hundred thousand dollars a year for part-time jobs overseeing the management and dispensing of claims from the trusts.

Koppelman initially agreed to speak with Legal Newsline, dismissing his role on the bankruptcy trusts as a “non-story.” He later referred requests for comment to an outside spokesman, who said in a prepared statement: “Mr. Koppelman’s role as a trustee is a matter of public record and he’s proud of the service he has been entrusted to provide. Even a brief review of his background will demonstrate his qualifications.”

Koppelman, 78, runs CAK Entertainment, where he negotiates merchandising and finance transactions for stars like Wendy Williams, Pitbull, Nicki Minaj and Jennifer Lopez. He got his start in the entertainment industry as an Adelphi University undergraduate in the Ivy Three, a pop group whose only hit single “Yogi” made it to the Top Ten in 1960. He later became a producer of acts like Jerry Lewis and the Playboys and then rose to the top of EMI Music before branching out into other businesses, including running the eponymous businesses of Steve Madden and Martha Stewart after each was convicted of securities fraud.

Koppelman, a non-lawyer, declined to say how he came to be a member of asbestos trust boards, but he and Weitz both sit on the board of Counsel Financial, a litigation finance firm run by former asbestos lawyer Joseph DiNardo.

Counsel also once counted among its investors Sheldon Silver, the former Speaker of the New York Assembly who was convicted on May 11 of engineering a scheme involving asbestos plaintiffs that yielded him millions of dollars in referral fees from Weitz & Luxenberg.

Koppelman’s role on multiple bankruptcy trusts is not unusual in a closely knit world where a few plaintiff firms control how trusts are set up and administered. Under Section 524(g) of the U.S. Bankruptcy Code, companies can obtain a “channeling injunction” placing all present and future asbestos claims in a special trust set up to pay those claims over time.

Plaintiff lawyers typically negotiate a “prepackaged” bankruptcy before going into court, including the names of proposed trustees as well as a Future Claims Representative who is supposed to represent the interests of claimants who haven’t yet manifested asbestos-related disease.

Since 524(g) requires a supermajority of present claimants to vote in favor of a plan, the lawyers representing those claimants hold an effective veto.

“In exchange, they want control over anybody who has a say about how this money is handed out,” said David Christian with DCA Law, who has represented numerous insurance companies in the often-adversarial process of determining who will ultimately foot the bills for asbestos claims. “They want somebody who is pliable.”

The search for pliable trustees, critics say, leads to the same people serving on multiple trusts, earning hundreds of thousands of dollars for each assignment. Koppelman’s co-trustee on two trusts is Alfred M. Wolin, a retired federal judge whom the Third Circuit ordered off of several asbestos cases after insurers complained he had held hundreds of ex parte meetings with plaintiff lawyers. The court didn’t accuse Wolin of wrongdoing but cited the appearance of impropriety. Now in private practice, Wolin serves on seven asbestos bankruptcy trusts.

Other trustees seem to be selected for their expertise in accounting, financial management and arbitration. Another asbestos judge-turned-arbitrator-turned-bankruptcy trustee is Dan Stack, who retired after 23 years on the bench in Madison County, IL – a court system frequently derided as a “Judicial Hellhole” because it draws so many asbestos lawsuits from out of state – to join two other trustees at the Flintkote Bankruptcy Trust. The trust, with more than $700 million in assets, paid the three a total of $1.3 million in trustee fees in 2016.

One of the trusts Koppelman helps oversee illustrates the importance of appointing trustees who safeguard the interests of future claimants as well as those of the plaintiff lawyers representing current claimants. The T H Agriculture & Nutrition trust was established in 2008 by a unit of Philips Electronics with $900 million in assets, a startling number given that THAN had been a peripheral player in asbestos litigation that never paid more than $39 million in claims in a single year.

Once in business, the trust started paying claims at 100% of estimated value, quickly transferring $325 million to current claimants and their lawyers, who typically collect 30% or more of any claim. Most of the claimants who were paid full value were among the more than 90,000 who voted for the plan and whose lawyers controlled the structure and management of the trust.

After the highest-value claims had been paid, the trust announced a 16-month halt, then readjusted its estimates to reduce the payout to 30%, citing the need to preserve assets for the future against a higher-than-expected $2.5 billion in claims.

The THAN trust was dominated by frequent fliers on the asbestos bankruptcy scene including Koppelman and Wolin, as well as an expert witness who has testified on the value of asbestos claims in nearly every bankruptcy in the past decade or so. The Future Claims Representative was Samuel Issacharoff, a NYU Law School expert on class actions and civil procedure who swore that future claimants were well protected under the first plan of distribution.

Christian, the lawyer who frequently represents insurers at odds with plaintiff lawyers, co-wrote a 2011 article blaming plaintiff lawyers and their hand-picked allies on the bankruptcy trusts for what happened at the THAN Trust. He and his co-authors concluded that “thousands of claims were suddenly manufactured and voted on,” giving plaintiff lawyers overwhelming control over the process.

“But to date, Section 524(g) and the rights of the future claimants have been abused without the FCR or any other party in the case raising any complaint or question in any document filed in the public document,” they wrote.

Koppelman’s spokesman declined to discuss his relationship with plaintiff lawyers, other than to deny that Weitz, a member of the Trust Advisory Committee that set up THAN, had recommended him. Koppelman’s “selection as a trustee required the approval of the board of each trust and, ultimately, approval by the court,” the spokesman said.

Follow us on Facebook

Comments Box SVG iconsUsed for the like, share, comment, and reaction icons

Texans for Lawsuit Reform

10 hours ago

Texans for Lawsuit Reform

When 30-year-old Quinnton Allen violated his parole for possession of a firearm, a Houston judge not only allowed him to stay on parole but granted him a PR bond for a felony. Unfortunately, the decision to release him on bond may have cost a man’s life. Read and share: bit.ly/3OvDU5z ... See MoreSee Less

Link thumbnail

29-year-old man murdered after judge grants felony PR bond to armed robber recently paroled from prison

bit.ly

HOUSTON – “I’ve never had any of these defendants we’ve profiled on Breaking Bond on parole and on a felony PR bond charged with murder,” said Andy Kahan with Crime Stoppers. “This is a fi...
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 0
  • Shares: 1
  • Comments: 3

Comment on Facebook

That judge should be held accountable

His family should get a good lawyer & sue the city & the judge…

The judge should be held as an accomplice to the murder before the fact and sued in civil court for his contribution to the death of the citizen.

Texans for Lawsuit Reform

1 day ago

Texans for Lawsuit Reform

Texas ports are thriving today, but in the early 2000s, abusive personal injury lawsuits threatened to shut them down. As the Port of Houston begins a long-awaited expansion, read more about the common-sense lawsuit reform in 2007 that saved our state’s shipping industry in this week’s TLR blog, For the Record: bit.ly/3aeTy6n ... See MoreSee Less

Learn More

Play
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 6
  • Shares: 2
  • Comments: 0

Comment on Facebook

Texans for Lawsuit Reform

2 days ago

Texans for Lawsuit Reform

Wishing everyone a very happy Fourth of July! ... See MoreSee Less

Wishing everyone a very happy Fourth of July!
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 5
  • Shares: 0
  • Comments: 1

Comment on Facebook

Happy Independence Day America Today we celebrate our Republic 🇺🇸


Follow us on Twitter

lawsuitreform avatarTLR@lawsuitreform·
4h 1544803550676615169

Join us in pursuing our mission of creating a fair, balanced, and predictable legal system! #lawsuitreform #stoplawsuitabuse

Get Involved

Texans for Lawsuit Reform has thousands of supporters from across Texas who are committed to a fair and balanced civil justice system.

bit.ly

Reply on Twitter 1544803550676615169Retweet on Twitter 15448035506766151691Like on Twitter 15448035506766151692Twitter 1544803550676615169
lawsuitreform avatarTLR@lawsuitreform·
10h 1544713193846603777

When 30-year-old Quinnton Allen violated his parole for possession of a firearm, a Houston judge not only allowed him to stay on parole but granted him a PR bond for a felony. The decision to release him on bond may have cost a man’s life. Read & RT:

29-year-old man murdered after judge grants felony PR bond to armed robber recently paroled from prison

HOUSTON – “I’ve never had any of these defendants we’ve profiled on Breaking Bond on parole and on a felony PR bond charged with m...

bit.ly

Reply on Twitter 1544713193846603777Retweet on Twitter 1544713193846603777Like on Twitter 1544713193846603777Twitter 1544713193846603777
lawsuitreform avatarTLR@lawsuitreform·
5 Jul 1544441042120089600

Sign up for the TLR Weekly News Roundup to receive a daily digest of headlines & news stories about #lawsuitreform from Texas & around the country!

Sign up for the TLR Weekly News Roundup!

Please use the form below to receive a daily digest of TLR Clips - headlines and news stories about lawsuit reform from Texas and around the country.

bit.ly

Reply on Twitter 1544441042120089600Retweet on Twitter 1544441042120089600Like on Twitter 15444410421200896001Twitter 1544441042120089600

Texans for Lawsuit Reform
1701 Brun Street
Houston, Texas 77019

Ph. 713-963-9363
  • About TLR
  • Our Mission
  • Our Team
  • Timeline of Reforms
  • Videos
  • Issues
  • Resource Center
  • For the Record
  • Special Reports
  • In the News
  • Press Releases
  • Invite a TLR Speaker
  • Get Involved
  • Invite a TLR Speaker
  • Donate
  • Stay Informed
  • Contact TLR

Copyright © 2022 · Texans for Lawsuit Reform. All rights reserved. | Privacy Policy

Copyright © 2022 · Texans for Lawsuit Reform.
All rights reserved.
Privacy Policy