The Supreme Court recently issued its long-awaited decision in Harrington v. Purdue Pharma L.P., 144 S.Ct. 2071 (U.S. 2024) (“Purdue Pharma”), addressing whether nonconsensual third-party releases are permissible under the Bankruptcy Code. In a 5-4 decision, the Court ruled that nonconsensual third-party releases are not permitted under the Bankruptcy Code. Notably, however, the Supreme Court … Continue Reading
Two controversial mechanisms are available in many circuits to assist parties in a chapter 11 case to reach a global resolution and obtain plan confirmation: non-consensual third-party releases and preliminary stays against third-party litigation. On July 28, 2021, the House Committee on the Judiciary Subcommittee on Antitrust, Commercial and Administrative Law announced proposed legislation, the … Continue Reading
A recent decision by Bankruptcy Judge Stuart Bernstein, made in connection with plan confirmation in the SunEdison bankruptcy case, strikes down non-consensual third-party releases on a variety of bases. The decision analyzes issues regarding subject matter jurisdiction, the circumstances of deemed consent, and the applicable substantive requirements for a non-consensual release. In their plan of … Continue Reading