What happens if a defendant files for bankruptcy while my case is pending?

If a company files for bankruptcy, you can no longer sue it. The lawsuit against the company is put on hold pending the bankruptcy proceedings. In most asbestos-related bankruptcies, the bankruptcy judge reviews the companies’ finances and liabilities and sets up a trust fund to compensate asbestos victims. Such trust funds might take a number of years to set up, and the amount of compensation available is typically less than what you may have received if the company had not gone through bankruptcy.