A channeling injunction is a court order, issued when an asbestos bankruptcy plan is confirmed, that permanently bars lawsuits against the reorganized company and sends (channels) all present and future asbestos claims to a trust instead.
Origin
The first channeling injunction was approved in the Johns-Manville bankruptcy in 1986. Congress codified the approach for asbestos cases in 1994 as Section 524(g) of the Bankruptcy Code, which sets conditions such as a trust funded in part by the company's stock and approval by at least 75 percent of voting asbestos claimants.
Significance in Asbestos Context
Because of the injunction, a person diagnosed today usually cannot sue a company that went through asbestos bankruptcy and must file a trust claim instead. Section 524(g) can also protect certain related parties, such as insurers or parent companies, when they contribute to the trust. In 2024 the Supreme Court held in Harrington v. Purdue Pharma that bankruptcy plans generally cannot release claims against non-debtors without consent, but it did not disturb Section 524(g)'s specific authority in asbestos cases.
Example Sentence
Because the manufacturer's 2006 plan included a channeling injunction, the family filed a claim with its trust rather than naming it in the lawsuit.
Related Terms
524(g) Trust, Chapter 11, Asbestos Trust, Trust Distribution Procedures, Texas Two-Step, Manville Trust
Notes
- Your lawyer will check every company in your exposure history for a bankruptcy and trust.
- Claims against a trust have their own deadlines, separate from lawsuit deadlines.
Category: Trust System & Claims · All Lexicon terms A–Z
This page is provided for general informational purposes and does not constitute legal advice. Every asbestos case turns on its own facts, exposure history, diagnosis, deadlines, available evidence, and applicable law. Reviewing this page does not create an attorney-client relationship. For advice about your specific situation, call 833-4-ASBESTOS for a free case review.