A group of former miners must return to bankruptcy court to determine the fate of their lawsuit against W.R. Grace & Co.'s insurers for asbestos-related injuries, a federal appeals court held.
According to bankruptcy law, the insurers—Continental Insurance Co. and Transportation Insurance Co.—would be shielded from the suit by a special “channeling injunction” if three conditions exist: they are named in the chemical company’s already-approved Chapter 11 plan; they are theoretically liable for the asbestos claims against the debtor; and if they acted under a “statutory relationship” of providing insurance coverage to W.R. Grace.
The first two conditions ...
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