Claims Bound By Section 524(g) Channeling Injunction

Section 524(g) of the Bankruptcy Code is a unique and powerful tool that provides the means for a debtor plagued with massive asbestos liabilities to reorganize by channeling such claims into a trust. While asbestos bankruptcies are becoming less frequent, precedent construing Section 524(g) remains important because the use of channeling injunctions outside the context of asbestos liability is often influenced by Section 524(g) precedent, as in In re Continental Airlines, 203 F.3d 203 (3d Cir. 2000). For that reason, a recent U.S. Court of Appeals for the Third Circuit opinion, In re W.R. Grace & Co., Nos. 12-1521/12-2904, 2013 U.S. App. LEXIS 18346 (3d. Cir. Sept. 4, 2013), is noteworthy for its confirmation that, in the face of some creative arguments to the contrary, a channeling injunction under Section 524(g) can indeed bind "all asbestos-related claims" against a debtor, including indirect claims from a governmental body for indemnification and contribution