On March 12, 2015, the United States Court of Appeals for the Eleventh Circuit affirmed the authority of a bankruptcy court to issue non-consensual, non-debtor releases in connection with the confirmation of a plan of reorganization. With this decision, the Eleventh Circuit joined the majority view that such releases are permissible under certain circumstances.

Background -

Seaside Engineering and Surveying, LLC (the “Debtor”) filed for Chapter 11 bankruptcy relief on October 7, 2011. The Debtor filed a reorganization plan that provided for the release by the Debtor’s creditors of certain non-debtor parties, including the principals of the Debtor, for any acts or omissions “in connection with, relating to, or arising out of” the Debtor’s Chapter 11 case or plan of reorganization (the “Release”).