News & Analysis as of

Third-Party Chapter 11

Cranfill Sumner LLP

Supreme Court Sends Earthquake Through Bankruptcy Cases, Past, Present, and Future

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The legal wrangling over Purdue Pharma, L.P.’s bankruptcy plan has been splashed over the news. In Purdue Pharma’s case, the reorganization plan called for Purdue Pharma to become a non-profit organization, while the Sackler...more

Fox Rothschild LLP

The Impact of Purdue Pharma

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It has been approximately two months since the highly anticipated Supreme Court decision in Harrington v. Purdue Pharma L.P., and it is already making a significant impact in bankruptcies around the country. In September...more

Faegre Drinker Biddle & Reath LLP

Post-Purdue Pharma, Two Bankruptcy Courts Chime In on Preliminary Injunctive Relief for Nondebtors

For decades, bankruptcy courts have extended the automatic stay through preliminary injunctions halting litigation against a debtor’s nondebtor codefendants. Such relief was relatively routine when the codefendants were the...more

Venable LLP

The Evolving Status of Settlement Bar Orders after Purdue

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Following the U.S. Supreme Court’s ruling in Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P, et al., which disallowed non-consensual third-party releases in Chapter 11 plans of reorganizations, bankruptcy...more

Eversheds Sutherland (US) LLP

US Supreme Court weighs in on nonconsensual third-party releases in bankruptcy

The US Supreme Court has recently issued a pivotal decision that has significant implications across various sectors, including legal, corporate, and public health. The decision settles a significant legal dispute that has...more

Hogan Lovells

Optimizing Your Future (Part II): An Update After the Supreme Court’s Landmark Decision in Purdue

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The Supreme Court’s landmark decision in Harrington v. Purdue Pharma L.P. – holding that the Bankruptcy Code does not authorize the release of third-party claims against non-debtors in a reorganization plan without the...more

Blake, Cassels & Graydon LLP

Impact transfrontalier de la décision de la Cour suprême des États-Unis dans l’affaire Harrington v. Purdue Pharma L.P.

Le 27 juin 2024, la Cour suprême des États-Unis a publié une décision très attendue qu’elle a rendue dans l’affaire William K. Harrington, United States Trustee, Region 2, Petitioner v. Purdue Pharma L.P. et al. (l’« affaire...more

Blake, Cassels & Graydon LLP

Cross-Border Implications of the U.S. Supreme Court’s Decision in Harrington v. Purdue Pharma L.P.

On June 27, 2024, the Supreme Court of the United States released its highly anticipated decision in William K. Harrington, United States Trustee, Region 2, Petitioner v. Purdue Pharma L.P. et al. (Purdue). At issue was...more

Ballard Spahr LLP

Supreme Court: No Nonconsensual Nondebtor Releases in Bankruptcy

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In Harrington v. Purdue Pharma L.P. et al., the U.S. Supreme Court held that nonconsensual releases of third-party claims against nondebtors are not authorized under the Bankruptcy Code, resolving a longstanding circuit...more

Faegre Drinker Biddle & Reath LLP

Supreme Court Denies Nonconsensual Third-Party Releases in Purdue

On June 27, 2024, in one of its most high-profile bankruptcy decisions, the U.S. Supreme Court decided Harrington v. Purdue Pharma L.P., et al., No. 23-124, holding that the U.S. Bankruptcy Code does not authorize releases...more

Paul Hastings LLP

The Purdue Decision on Third Party Releases and Its Practical Implications

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In a landmark decision that will significantly impact future reorganization plans, the Supreme Court categorically held in Harrington v. Purdue Pharma L.P., that bankruptcy courts lack the authority to approve nonconsensual...more

Vinson & Elkins LLP

SCOTUS in Purdue: Non-Debtor Third-Party Releases Are Not Permitted in Chapter 11 Plans Without Consent

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On June 27, 2024, the United States Supreme Court (the “Supreme Court” or “Court”) rendered a 5-4 opinion in Harrington v. Purdue Pharma, L.P. that “the [B]ankruptcy [C]ode does not authorize a release and injunction that, as...more

Lowenstein Sandler LLP

Purdue Pharma: Supreme Court Prohibits Non-Consensual Third-Party Releases; Ruling Will Reshape Bankruptcy Practice

In a landmark 5-4 decision in Harrington v. Purdue Pharma that will significantly reshape corporate bankruptcy practice, the U.S. Supreme Court resolved a circuit split regarding the authority of a bankruptcy court to approve...more

Lowenstein Sandler LLP

High Court Should Maintain Insurer Neutrality In Bankruptcy

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A recent Expert Analysis article penned by Frank Perch, "High Court Should Endorse Insurer Standing In Bankruptcy," advocates for the U.S. Supreme Court, in Truck Insurance Exchange v. Kaiser Gypsum Company Inc., to adopt a...more

Fox Rothschild LLP

Are Gate-keeper Provisions in Chapter 11 Confirmation Orders a Stopgap for Nonconsensual Third-Party Releases?

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As many bankruptcy practitioners are aware, there is a circuit court split with respect to the allowability of non-consensual third-party releases. Notably, in the Purdue Pharma case, the United States Court of Appeals for...more

Kerr Russell

U.S. Supreme Court to Address Permissibility of Non-Consensual Third-Party Releases in Chapter 11 Bankruptcy Plans

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As the calendar turns to autumn, the United States Supreme Court (“SCOTUS”) is commencing its new term and preparing to address a monumental issue that will impact chapter 11 law and the mass tort system: the permissibility...more

Dorsey & Whitney LLP

Recent Divergent Views on Third-Party Injunctions in Mass Tort Bankruptcies

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A third-party injunction in a chapter 11 bankruptcy is generally used to protect a non-bankrupt entity from liability that is shared with, or derivative of, a bankrupt entity. Third-party injunctions are difficult to obtain...more

McDermott Will & Emery

Second Circuit Assesses Propriety of Third-Party Releases in Purdue

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On May 30, 2023, the US Court of Appeals for the Second Circuit released its long-awaited opinion addressing Purdue Pharma’s confirmed chapter 11 bankruptcy plan. Although the appeal challenged more than one aspect of the...more

Vinson & Elkins LLP

In re Purdue Pharma L.P.: Second Circuit Reverses S.D.N.Y and Holds Bankruptcy Court Has Subject Matter Jurisdiction and Statutory...

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On May 30, 2023, the United States Court of Appeals for the Second Circuit (the “Second Circuit” or the “Court”) rendered a much anticipated opinion (the “Opinion”), reversing the order of the United States District Court for...more

White and Williams LLP

Third-Party Releases Possibly Headed To Scotus Following Purdue Pharma Plan Confirmation

The Second Circuit’s decision on May 30, 2023, to reverse the Southern District of New York’s (SDNY) decision and uphold the Bankruptcy Court approval of third-party releases in the Chapter 11 plan of Purdue Pharmaceuticals...more

Vinson & Elkins LLP

To Release or Not to Release? Courts Remain Split on Release Provisions

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Third-party release provisions are a common feature of almost every chapter 11 plan in large bankruptcy cases. Despite this, there has long been a split among bankruptcy courts and Circuit Courts of Appeal on the scope and...more

Kerr Russell

Third-Party Releases In Chapter 11 Bankruptcy

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Historically, a business (known as a debtor) filed for chapter 11 to restructure its debts owed to creditors through a plan of reorganization. The debtor would receive a discharge of any debts not required to be repaid under...more

Vinson & Elkins LLP

Another Delaware Bankruptcy Court Approves Third-Party Releases and Opt-Out Mechanisms Amidst Disagreements with Other Circuits

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On July 29, 2022, Laurie S. Silverstein, Chief Judge of the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), issued an opinion on confirmation of the chapter 11 plan (the “Plan”) of the Boy Scouts of...more

Vinson & Elkins LLP

In re Mallinckrodt PLC.: Delaware Bankruptcy Court Approves Non-Consensual Third-Party Releases in Contrast to Purdue and Ascena

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On February 3, 2022, as part of a series of recent decisions addressing third-party releases, Bankruptcy Judge John T. Dorsey of the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) confirmed the chapter...more

Vinson & Elkins LLP

District Court in Virginia Continues Questioning of Third-Party Releases – At Least in the Absence of Detailed Findings of...

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Judge Colleen McMahon recently opined in Purdue1 that “the lower courts desperately need a clear answer” as to the validity of third-party releases. On January 13, 2022, the United States District Court for the Eastern...more

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