Channeling Injunction

Injunction issued by a bankruptcy court under a plan of reorganization barring claimants from asserting claims against insurance carriers, or other third parties providing consideration under the plan. In essence, proceeds of insurance policies, or other debtor or third party funds, are “channeled” into a trust or some other segregated fund, to be used for distribution to creditors. Commonly used in asbestos, environmental, and other mass tort cases.

Bankruptcy Code § 105(a), § 524(g).

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