News & Analysis as of

Chapter 11 Third-Party Release Agrements Bankruptcy Code

Cadwalader, Wickersham & Taft LLP

Fifth Circuit Holds that Gatekeeping and Injunction Provisions in Bankruptcy Plans Cannot Shield Non-Debtors From Liability

On March 18, 2025, the United States Court of Appeals for the Fifth Circuit held in In re Highland Capital Mgmt., L.P., that a plan’s gatekeeping and injunction provisions could not extend to claims against most non-debtors...more

DLA Piper

SDNY Bankruptcy Court Approves Settlement Agreements with Nonconsensual Third-Party Releases for Insurance Companies

DLA Piper on

In the chapter 11 bankruptcy case of In re Roman Catholic Diocese of Rockville Centre, New York, Case No. 20-12345 (MG), the US Bankruptcy Court for the Southern District of New York recently approved settlement agreements...more

Ward and Smith, P.A.

Should I Care About the Purdue Pharma Decision?

Ward and Smith, P.A. on

On June 27, 2024, the United States Supreme Court decided the Purdue Pharma appeal. In a five-to-four decision, the Supreme Court held that a bankruptcy court may not extend to non-debtors the benefits of a Chapter 11...more

Venable LLP

Supreme Court Strikes Down Bankruptcy Courts’ Ability to Order Non-consensual Third-Party Releases

Venable LLP on

Last week, in a 5-to-4 decision in the case of Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P, et al., the U.S. Supreme Court struck down the ability of bankruptcy courts to order non-consensual third-party...more

DarrowEverett LLP

Release Me? Supreme Court to Resolve Contentious Bankruptcy Issue

DarrowEverett LLP on

In March 2022, we discussed the decision by the Southern District of New York (the “District Court”) overturning the U.S. Bankruptcy Court for the Southern District of New York’s (the “Bankruptcy Court”) confirmation of...more

Jones Day

Second Circuit Green Lights Purdue Pharma Chapter 11 Plan Containing Nonconsensual Third-Party Releases

Jones Day on

There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various non-debtor parties involved in the process of...more

McDermott Will & Emery

Second Circuit Assesses Propriety of Third-Party Releases in Purdue

McDermott Will & Emery on

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

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

Vinson & Elkins LLP on

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

Dorsey & Whitney LLP

A Tale of 4 Cities: How Different Jurisdictions Recently Address Third-Party Releases

Dorsey & Whitney LLP on

The ability of a chapter 11 going-concern debtor to be discharged from its prepetition liabilities is common place and not controversial.  11 U.S.C.  § 1141(d). However, the ability of a debtor to release third-party...more

Seward & Kissel LLP

Bankruptcy System Faces Gov't Backlash

Seward & Kissel LLP on

Key bankruptcy issues, including the propriety of third-party releases and the so-called "Texas Two-Step," as well as determination of proper case venue, have recently drawn the attention of mainstream media, the public at...more

Nelson Mullins Riley & Scarborough LLP

11th Circuit Approves of Third-Party Releases Despite Debtor’s Failure to Comply with Strict Notice Requirements of Bankruptcy...

Overview - Although a discharge might not release third parties and protects only the debtor against a determination of personal liability, in In re Le Ctr. on Fourth, LLC, 17 F.4th 1326 (11th Cir. 2021), the Eleventh...more

Patterson Belknap Webb & Tyler LLP

Releases: How Did We Get Here and What is Next?

As a result of Purdue Pharma’s proposed plan of reorganization, and the ongoing opioid epidemic that continues to grip the nation, the debate over non-consensual third-party releases has gone mainstream despite being a...more

Rosenberg Martin Greenberg LLP

Is the End Near for Third Party Releases In Chapter 11 Plans?

When the Bankruptcy Reform Act of 1978, the foundation on which the current Bankruptcy Code is constructed, was enacted, bankruptcy cases customarily involved a debtor addressing claims only against it. Consistent with that...more

Skadden, Arps, Slate, Meagher & Flom LLP

A Look at 2019 Court Decisions That May Shape Restructuring Issues in the Year Ahead

A series of decisions over the past year — on issues such as make-whole premiums, intercreditor agreements, backstops for rights offerings and nonconsensual third-party releases — will likely have a significant impact in 2020...more

Jones Day

Washington District Court Overturns Approval of Third-Party Releases in a Settlement Agreement and Related Free-and-Clear Sale

Jones Day on

For nearly 25 years, courts in the Ninth Circuit have consistently refused to sanction nonconsensual third-party releases as part of chapter 11 plans. A ruling recently handed down by the U.S. District Court for the District...more

Patterson Belknap Webb & Tyler LLP

Stern Challenge to Third-Party Plan Releases Fails in Delaware

In hindsight, it seems inevitable that constitutional and other jurisdictional problems would arise when Congress, in enacting the Bankruptcy Reform Act of 1978, created impressive new powers and responsibilities for the...more

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