Corinne Ball, with Jones Day. Courtesy photo District Court Rejects Non-Consensual Third-Party Releases in Purdue Pharma Plan; While Plaintiffs Return to the Race to the Courthouse, Distress Investors Will Reap Opportunities
The court ruled that the shareholder releases that formed the basis of a settlement that led to the debtor's plan of reorganization exceeded the scope of the bankruptcy court's statutory authority by releasing direct causes of action owned by nonconsenting creditors against non-debtors.
December 22, 2021 at 12:45 PM
13 minute read
In an eagerly anticipated decision, the U.S. District Court for the Southern District of New York recently vacated the Purdue Pharma confirmation order. The court ruled that the shareholder releases that formed the basis of a settlement that led to the debtor's plan of reorganization exceeded the scope of the bankruptcy court's statutory authority by releasing direct causes of action owned by nonconsenting creditors against non-debtors.
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