Energy services firm McDermott International ( MDR) dodged more than a technical bullet this weekend when a court ruled it didn't have to return more than a half-billion dollars to a subsidiary facing huge asbestos liabilities, analysts said. The ruling, by a federal court in New Orleans, suggests the company may be able to isolate the liability within its subsidiary, Babcock & Wilcox. Babcock, which used asbestos as an insulator in its industrial boilers, faces at least $1 billion in present and future claims, and filed for Chapter 11 protection in February 2000. In an ongoing case, the court ruled Friday that McDermott did not have to return $622 million in assets to Babcock & Wilcox. The plaintiffs claimed that when B&W transferred the assets to its parent company in the summer of 1998, it was insolvent, making the transfer fraudulent. The court ruled otherwise. "Since the start of Chapter 11, the asbestos claimants committee has tried to make this case about everything but Babcock & Wilcox," said John Donley, a lawyer with Kirkland & Ellis, McDermott's defense. "They've been trying to get at assets of McDermott Inc. and McDermott International. This lawsuit alleging fraudulent transfers was the linchpin of their strategy," he said.