Despite decades of litigation, asbestos claims still seem to find their way into bankruptcy courtrooms. To respond to the growing number of asbestos-related bankruptcies, Congress enacted section 524(g) to the Bankruptcy Code. In general, Chapter 11 debtors utilizing section 524(g) may channel present and future mass tort related claims to a settlement trust. Doing so effectively discharges these debtors of the obligation to adjudicate present and future mass tort claims.

Outside of bankruptcy law, it is perfectly acceptable for a debtor to prefer one creditor over another. For example, in any given month a consumer holding two credit cards may very well choose to pay off one credit card in its entirety while making only the minimum payment on the other. Bankruptcy law, on the other hand, purports to promote fairness and equality amongst similarly situated creditors.