In its recent landmark opinion in Purdue Pharma, the U.S. Supreme Court put to rest a controversial circuit spilt by holding "that the Bankruptcy Code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seeks to discharge claims against a nondebtor without the consent of affected claimants." Put simply, Purdue forbade nonconsensual nondebtor releases. The court, however, was careful to confine its ruling to precisely the foregoing, and expressed no opinion on plan releases other than nonconsensual ones. In particular, the court was careful to note, "Nothing in what we have said should be construed to call into question consensual third-party releases offered in connection with a bankruptcy reorganization plan."

In sharp contrast to nonconsensual releases, consensual releases by creditors of claims against non-debtors via plan confirmation have long been commonplace and uncontroversial. One type of consensual release is the so called "opt-out" release. A plan's "opt-out" release of creditors' claims against nondebtors will be binding on a creditor unless that creditor "opts-out" of the release. A creditor's means for expressing its election to opt-out is often a box on the plan ballot that it can check if it wishes to opt-out of the nondebtor releases in the plan. Courts regard creditors returning ballots with this box unchecked as having expressed their consent to be bound by the nondebtor releases.