Jeffrey Garfinkle speaks a panel on “Third Party Releases, Injunctions, and Exonerations in Chapter 11 Plans and Settlements” on October 21, 2021 from 5:30pm to 7:00pm
Non-consensual third-party releases – releases of liability that might be afforded to non-debtor persons with ties to a chapter 11 debtor’s estate – have long been the subject of important Circuit Court decisions. Undoubtedly, the availability of third-party releases has been venue-determinative for many large corporate chapter 11 cases that have confirmed plans centered on such relief. Most recently, mass-tort bankruptcy mega-cases have highlighted the significance of the availability, standards and opt-out mechanisms related to non-consensual third-party releases with political discourse on the topic now reaching a “fever pitch.” In the shadow of the Purdue Pharma bankruptcy case and hastily-drafted legislation pending before Congress, which could strictly limit Federal Court powers in this area, the panel will explore the status quo and discuss whether there are standards under which it would be beneficial for the Bankruptcy Code to expressly allow third-party releases in the context of a chapter 11 plan.