Consensual Third-Party Releases
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
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
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
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
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
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
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
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
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
Judge Martin Glenn granted recognition to a UK scheme of arrangement with third-party releases that lacked full creditor consent. In re Avanti Communs. Grp., PLC, No. 18-10458, 2018 Bankr. LEXIS 1078 (Bankr. S.D.N.Y. Apr. 9,...more