II 

115TH CONGRESS 

2D SESSION S. 2564 

To amend title 11, United States Code, to promote the investigation of 

fraudulent claims against certain trusts, to amend title 18, United States 

Code, to provide penalties against fraudulent claims against certain 

trusts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 15, 2018 

Mr. TILLIS (for himself, Mr. CORNYN, and Mr. GRASSLEY) introduced the following bill; which was read twice and referred to the Committee on the 

Judiciary 

A BILL 

To amend title 11, United States Code, to promote the 

investigation of fraudulent claims against certain trusts, 

to amend title 18, United States Code, to provide penalties against fraudulent claims against certain trusts, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Providing Responsible 

5 Oversight of Trusts to Ensure Compensation and Trans6 parency for Asbestos Victims Act of 2018’’ or the ‘‘PRO7 TECT Asbestos Victims Act of 2018’’. 


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1 SEC. 2. REDUCTION OF FRAUDULENT CLAIMS AND DE2 MANDS RELATING TO CERTAIN TRUSTS. 

3 (a) IN GENERAL.—Section 524(g) of title 11, United 

4 States Code, is amended— 

5 (1) in paragraph (4)(B)(i), by striking ‘‘the 

6 court appoints a legal representative’’ and inserting 

7 ‘‘the United States trustee or bankruptcy adminis8 trator appoints, under paragraph (10), a future 

9 claims representative’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(8) INVESTIGATION OF FRAUDULENT CLAIMS

12 AND DEMANDS.— 

13 ‘‘(A) IN GENERAL.—Notwithstanding sec14 tion 302(d)(3) of the Bankruptcy Judges, 

15 United States Trustees, and Family Farmer 

16 Bankruptcy Act of 1986 (28 U.S.C. 581 note), 

17 rule 9035 of the Federal Rules of Bankruptcy 

18 Procedure, or any other provision of law, in any 

19 judicial district of the United States, the United 

20 States trustee may investigate the administra21 tion and operation of a trust described in para22 graph (2)(B)(i), including a trust described in 

23 paragraph (2)(B)(i) that was created before the 

24 date of enactment of the PROTECT Asbestos 

25 Victims Act of 2018. 


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1 ‘‘(B) AUTHORITY OF THE UNITED STATES

2 TRUSTEE.—In conducting an investigation 

3 under subparagraph (A), the United States 

4 trustee shall have the authority— 

5 ‘‘(i) to conduct discovery, including by 

6 any means of discovery available to a 

7 trustee in an action under chapter 5 of 

8 title 11, relating to the trust, a claimant of 

9 the trust, or a claim against the trust, in10 cluding a claim filed by a claimant against 

11 the trust in a bankruptcy court or other 

12 forum, notwithstanding the effect of any 

13 order purporting to limit the access of the 

14 United States trustee to any information 

15 relating to that discovery; 

16 ‘‘(ii) to conduct an audit or contract 

17 for an audit of any claim or demand paid, 

18 or to be paid, in whole or in part by the 

19 trust; 

20 ‘‘(iii) if the United States trustee has 

21 reasonable grounds to believe that a false 

22 claim or demand to be paid in whole or in 

23 part by a trust was made, to refer the 

24 matter to the United States attorney for 

25 the relevant judicial district, and, on the 


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1 request of the United States attorney, as2 sist the United States attorney in carrying 

3 out a prosecution based on that false claim 

4 or demand; and 

5 ‘‘(iv) to request that the court exercise 

6 any authority and impose remedies avail7 able to it, including those— 

8 ‘‘(I) under the terms of the plan 

9 of reorganization to prevent abuse or 

10 mismanagement of the trust; and 

11 ‘‘(II) under section 105. 

12 ‘‘(C) STANDING.—In carrying out this 

13 paragraph, the United States trustee shall have 

14 standing to raise, to appear, and to be heard on 

15 any matter for which the court has jurisdiction 

16 or for which the court has reserved jurisdiction 

17 under the terms of the plan of reorganization. 

18 ‘‘(9) ACCESSING TRUST INFORMATION.— 

19 ‘‘(A) IN GENERAL.—Subject to section 107 

20 and any appropriate protective order, a trust 

21 described in paragraph (2)(B)(i) shall, on writ22 ten request, provide, in a timely manner, any 

23 information relating to any payment from, and 

24 any demand for payment from, the trust to a 


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1 party to an action at law or equity if the action 

2 relates to liability for asbestos exposure. 

3 ‘‘(B) COSTS.—A trust described in para4 graph (2)(B)(i) may require, from the person 

5 making a request under subparagraph (A), pay6 ment of any reasonable cost incurred to comply 

7 with the requirements under subparagraph (A). 

8 ‘‘(10) APPOINTMENT OF FUTURE CLAIMS REP9 RESENTATIVES.— 

10 ‘‘(A) IN GENERAL.—On notification by a 

11 plan proponent of the intention of the plan pro12 ponent to seek an injunction under this sub13 section, the United States trustee or bank14 ruptcy administrator, after consultation with 

15 parties in interest, shall appoint, subject to the 

16 approval of the court, a disinterested individual 

17 to serve as the future claims representative. 

18 ‘‘(B) SUPPORT.— 

19 ‘‘(i) IN GENERAL.—The future claims 

20 representative, subject to the approval of 

21 the court, may employ 1 or more attor22 neys, accountants, or other professional 

23 persons to represent the future claims rep24 resentative or assist the future claims rep25 resentative in carrying out the duties of 


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1 the future claims representative under this 

2 subsection. 

3 ‘‘(ii) QUALIFICATIONS.—An attorney, 

4 accountant, or other professional person 

5 employed under clause (i) to represent or 

6 assist the future claims representative— 

7 ‘‘(I) shall be a disinterested per8 son; and 

9 ‘‘(II) may not represent any 

10 other entity having an adverse interest 

11 in connection with the case. 

12 ‘‘(11) POWER OF THE COURT.—Notwith13 standing any other provision of law, including para14 graph (1)(B), sections 1127, 1141, and 1144 of this 

15 title, and section 157 of title 28, the court may issue 

16 any order, process, or judgment that is necessary 

17 and appropriate— 

18 ‘‘(A) to carry out the provisions of para19 graphs (8) and (9); or 

20 ‘‘(B) to enforce or implement a court order 

21 or prevent an abuse of process relating to a 

22 trust described in paragraph (2)(B)(i). 

23 ‘‘(12) BENEFITS UNDER MEDICARE.— 

24 ‘‘(A) POTENTIAL ELIGIBLE CLAIMANTS.— 

25 Not later than 60 days after a claim is subVerDate Sep 11 2014 04:36 Mar 27, 2018 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2564.IS S2564

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1 mitted to a trust described in paragraph 

2 (2)(B)(i), the administrator of the trust shall 

3 determine whether the claimant is entitled to 

4 benefits under the Medicare program under 

5 title XVIII of the Social Security Act (42 

6 U.S.C. 1395 et seq.). 

7 ‘‘(B) REQUIRED INFORMATION.—If a 

8 claimant is determined to be entitled to benefits 

9 under subparagraph (A), the administrator of 

10 the trust shall submit to the Secretary of 

11 Health and Human Services, in the form and 

12 manner (including frequency) specified by the 

13 Secretary of Health and Human Services, the 

14 information described in section 1862(b)(8)(B) 

15 of Social Security Act (42 U.S.C. 

16 1395y(b)(8)(B)).’’. 

17 (b) COMPENSATION.—Section 330(a)(1) of title 11, 

18 United States Code, is amended— 

19 (1) by inserting ‘‘a future claims representative 

20 appointed under section 524(g)(10)(A),’’ after ‘‘sec21 tion 333,’’; and 

22 (2) by inserting ‘‘, 524(g)(10)(B),’’ after ‘‘sec23 tion 327’’. 


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1 (c) REOPENING CASES.—Section 350 of title 11, 

2 United States Code, is amended by adding at the end the 

3 following: 

4 ‘‘(c) INVESTIGATIONS BY UNITED STATES TRUST5 EE.—On the request of the United States trustee, a case 

6 shall be reopened in the court in which that case was 

7 closed in order to enable the United States trustee to con8 duct an investigation under section 524(g)(8).’’. 

9 SEC. 3. CRIMINAL PENALTIES. 

10 Section 152 of title 18, United States Code, is 

11 amended— 

12 (1) in paragraph (8), by striking ‘‘or’’ after the 

13 semicolon; 

14 (2) by striking the comma at the end of para15 graph (9) and inserting a semicolon; and 

16 (3) by inserting after paragraph (9) the fol17 lowing: 

18 ‘‘(10) knowingly and fraudulently makes a false 

19 representation to a trust described in section 

20 524(g)(2)(B)(i) of title 11, or any official of a trust 

21 described in that section, in relation to an investiga22 tion conducted under section 524(g)(8)(A) of that 

23 title; or 

24 ‘‘(11) knowingly and fraudulently makes a false 

25 claim or demand to be paid in whole or in part by 


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1 a trust described in section 524(g)(2)(B)(i) of title 

2 11,’’. 

3 SEC. 4. AUTHORITY OF UNITED STATES TRUSTEE. 

4 Section 586 of title 28, United States Code, is 

5 amended by adding at the end the following: 

6 ‘‘(g) INVESTIGATION OF FRAUDULENT CLAIMS AND

7 DEMANDS.— 

8 ‘‘(1) IN GENERAL.—The United States trustee 

9 may investigate the administration and operation of 

10 a trust, including a trust that was created before the 

11 date of enactment of the PROTECT Asbestos Vic12 tims Act of 2018— 

13 ‘‘(A) described in section 524(g)(2)(B)(i) 

14 of title 11; or 

15 ‘‘(B) established under section 105(a) of 

16 title 11 for the purpose of assuming the asbes17 tos-related liabilities of a debtor. 

18 ‘‘(2) AUTHORITY OF THE UNITED STATES

19 TRUSTEE.—In conducting an investigation under 

20 subparagraph (A), the United States trustee shall 

21 have the authority— 

22 ‘‘(A) to conduct discovery, including by 

23 any means of discovery available to a trustee in 

24 an action under chapter 5 of title 11, relating 

25 to the trust, a claimant of the trust, or a claim 


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1 against the trust, including a claim filed by a 

2 claimant against the trust in a bankruptcy 

3 court or other forum, notwithstanding the effect 

4 of any order purporting to limit the access of 

5 the United States trustee to any information re6 lating to that discovery; 

7 ‘‘(B) to conduct an audit or contract for 

8 an audit of any claim or demand paid, or to be 

9 paid, in whole or in part by the trust; 

10 ‘‘(C) if the United States trustee has rea11 sonable grounds to believe that a false claim or 

12 demand to be paid in whole or in part by a 

13 trust was made, to refer the matter to the 

14 United States attorney for the relevant judicial 

15 district, and, on the request of the United 

16 States attorney, assist the United States attor17 ney in carrying out a prosecution based on that 

18 false claim or demand; and 

19 ‘‘(D) to request that the court exercise any 

20 authority and impose remedies available to it, 

21 including those— 

22 ‘‘(i) under the terms of the plan of re23 organization to prevent abuse or mis24 management of the trust; and 

25 ‘‘(ii) under section 105. 


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1 ‘‘(3) STANDING.—In carrying out this sub2 section, the United States trustee shall have stand3 ing to raise, to appear, and to be heard on any mat4 ter for which the court has jurisdiction or for which 

5 the court has reserved jurisdiction under the terms 

6 of the plan of reorganization. 

7 ‘‘(4) JUDICIAL DISTRICTS ESTABLISHED FOR

8 ALABAMA AND NORTH CAROLINA.—Notwithstanding 

9 section 302(d)(3) of the Bankruptcy Judges, United 

10 States Trustees, and Family Farmer Bankruptcy 

11 Act of 1986 (28 U.S.C. 581 note), rule 9035 of the 

12 Federal Rules of Bankruptcy Procedure, or any 

13 other provision of law, the United States trustee for 

14 the appropriate region described in section 581(a) 

15 shall have the authority to carry out this subsection 

16 with respect to a trust described in paragraph (1) in 

17 a case that is filed in a judicial district established 

18 for the State of Alabama or North Carolina.’’. 

Æ 


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