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Debtors Non-Debtors

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

Akerman LLP

Purdue Pharma Foretells a Troubled Future for Bar Orders

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In Harrington v. Purdue Pharma L.P., the Supreme Court held that the Bankruptcy Code does not authorize a bankruptcy court to grant a release and injunction that extinguishes direct claims against nondebtor third parties...more

Troutman Pepper Locke

What Types of Releases Are Contained in a Chapter 11 Plan, and Do I Have to Agree to Them? - Creditor’s Rights Toolkit

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Chapter 11 plans contain various releases – some in favor of the debtor and some in favor of certain nondebtor third parties. While creditors are bound by a Chapter 11 discharge, they have options for dealing with a plan's...more

Offit Kurman

2024: Year in Review: Third-Party Releases After Purdue Pharma

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The most notable decision in the bankruptcy world in 2024 was the Supreme Court’s decision in Purdue Pharma. Harrington v. Purdue Pharma, L.P., 144 S. Ct. 2071 (2024). At the heart of the fight in Purdue Pharma were...more

Hendershot Cowart P.C.

Executory Contracts and Contract Rejection: What Non-Debtors Need to Know About Bankruptcy

Hendershot Cowart P.C. on

Bankruptcy debtors have special rights in contracts or leases where both parties have outstanding obligations, known in legal terms as “executory contracts” or “unexpired leases”. If you are doing business with a company that...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

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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

Miller Canfield

In Purdue Pharma, Supreme Court Rules That Nonconsensual Releases Are A Nonstarter

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On June 27, 2024, the United States Supreme Court issued its long-awaited opinion in Harrington v. Purdue Pharma L.P., holding that the Bankruptcy Code does not permit nonconsensual releases of nondebtors. As a...more

Jones Day

Business Restructuring Review November–December 2023 | Vol. 22 No. 6

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Health Care Provider Bankruptcy Update: Patient Care Ombudsman Not Necessary In Every Health Care Business Bankruptcy Case - Recent headlines have starkly illuminated the headwinds facing health care providers struggling...more

Jones Day

Florida Bankruptcy Court Substantively Consolidates Debtor and Non-Debtor Entities

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The Bankruptcy Code does not explicitly authorize the equitable remedy of "substantive consolidation"—i.e., treating the assets and liabilities of two or more related entities as if they belonged to a single, consolidated...more

Pillsbury Winthrop Shaw Pittman LLP

When Does an Alter Ego Suit Alleging Debtor and Non-Debtor Are “One and the Same” Violate the Discharge Injunction?

The Ninth Circuit Bankruptcy Appellate Panel holds that a discharge injunction does not bar an alter ego claim against a non-debtor where, under applicable law, the result of an alter ego finding is not to deem the entities...more

Troutman Pepper Locke

Who Is the Claims Agent and What Type of Information Can I Obtain on Their Website? - Creditor’s Rights Toolkit

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Troutman Pepper's Creditor’s Rights Toolkit is a series that provides practical insights to help creditors confront the challenges of commercial bankruptcy. A claims agent is a third party retained by the debtor to take on...more

Seward & Kissel LLP

Bestwall Bossa Nova, Core Strategy, Auction Over(stock), and Vice Price

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Georgia-Pacific may maintain bankruptcy pause on lawsuits, court rules | Reuters - The 4th U.S. Circuit Court of Appeals recently ruled to extend Georgia-Pacific’s protection against lawsuits while its subsidiary...more

White and Williams LLP

Second Circuit Finds Willful Stay Violation in Foreclosure Sale of Non-Debtor’s Real Property

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On July 6, 2022, the Court of Appeals for the Second Circuit (the Circuit Court), in analyzing an issue of first impression, entered a decision clarifying the expansive applicability of the automatic stay provision of the...more

Jones Day

Delaware Court Holds Rejection Eliminates Non-Debtor's Exclusive Right to Provide Services to the Debtor

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Nine Point Energy Holdings, Inc. and its affiliates (collectively, "Nine Point" or "Nine Point debtors") constituted an oil and gas production and exploration company that sought to reorganize in chapter 11 through a going...more

Vinson & Elkins LLP

In re Purdue Pharma L.P.: S.D.N.Y. Holds Bankruptcy Court Lacks Statutory Authority to Approve Sackler Family Releases

Vinson & Elkins LLP on

On December 16, 2021, in a significant decision, the United States District Court for the Southern District of New York (the “District Court”) vacated the order confirming the chapter 11 plan of Purdue Pharma L.P. (“Purdue”)...more

Snell & Wilmer

Delaware Bankruptcy Court Provides Guidance on the Scope of The Automatic Stay

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On December 3, 2020, the United States Bankruptcy Court for the District of Delaware entered an opinion in In re Extraction Oil & Gas, Inc., Case No. 20-11548 (CSS), holding that two entities (the “State Court Plaintiffs”)...more

Ballard Spahr LLP

NY Court of Appeals Holds No Bankruptcy Preemption of Lender Tort Claims Against Related Third Parties

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Summary - The State of New York Court of Appeals held that claims against non-debtor related parties, based on their actions to aid or induce Chapter 11 debtors to breach contractual loan covenants, were not subject to...more

Snell & Wilmer

Ninth Circuit Now Allows Some Nonconsensual Third-Party Releases in Chapter 11 Plans

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The Ninth Circuit has generally prohibited nonconsensual third-party releases in bankruptcy reorganization plans since at least 1949. See In re Lowenschuss, 67 F.3d 1394, (9th Cir. 1995) (citing Commercial Wholesalers, Inc....more

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