There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various.
A third-party injunction in a chapter 11 bankruptcy is generally used to protect a non-bankrupt entity from liability that is shared with, or derivative of, a bankrupt entity..
As a result of Purdue Pharma’s proposed plan of reorganization, and the ongoing opioid epidemic that continues to grip the nation, the debate over non-consensual third-party releases.
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.