Third Circuit Affirms Bankrupt Asbestos Defendants’ Transfer of Insurance Recovery Rights to Personal Injury Trusts Notwithstanding Insurance Policies’ Anti-Assignment Provisions

The U.S. Court of Appeals for the Third Circuit, in its May 1, 2012, decision in In re: Federal-Mogul Global, Inc. held that asbestos defendants who file Chapter 11 petitions and seek to resolve their asbestos-related liabilities through the creation of a personal injury trust under Section 524(g) of the Bankruptcy Code may transfer their rights under their liability insurance policies to the trust notwithstanding the policies’ anti-assignment provisions.