Recently, there was another appeal to Judge McMahon in Purdue addressing extension by the bankruptcy court of the preliminary injunction to stay litigation against the Sacklers and other nondebtor defendants. The bankruptcy court issued the preliminary injunction “to enjoin what the automatic stay could not: (1) governmental actions to enforce regulatory or police powers, and (2) actions against [r]elated [p]arties that might have an impact on the res of the estate.”

This fall, the bankruptcy court extended the preliminary injunction for the thirty-seventh time and overruled an objection by the State of Maryland. Maryland subsequently appealed. Notably, in her prior rulings Judge McMahon correctly assessed Chapter 11 does not authorize releases of third parties, absent the consent of the affected claimholders, as determined and confirmed by the Supreme Court in Harrington v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024). The State of Maryland had unsuccessfully opposed the request for a further extension of the preliminary injunction, relying on that decision to argue that if the bankruptcy court did not have authority to issue a permanent injunction, it could not possibly have the authority to issue a preliminary injunction.