Southern District of New York Holds That Bankruptcy Court Lacks Statutory Authority to Approve Non-Consensual Third-Party Releases

Mayer Brown partners Adam C. Paul, Sean T. Scott, Louis S. Chiappetta, Aaron Gavant, and Tyler R. Ferguson recently published an article for Mayer Brown’s Perspectives & Events portal on the December 16, 2021, decision in which Judge Colleen McMahon of the US District Court for the Southern District of New York reversed the bankruptcy court order confirming the Chapter 11 plan of Purdue Pharma, L.P. and its affiliated debtors, holding that the Bankruptcy Code did not authorize the plan’s non-consensual third-party releases. Judge McMahon’s decision is now the subject of an expedited appeals process whose outcome has the potential to substantially affect the ability of shareholders and other third parties to obtain releases in a Chapter 11 case.

The full article is available here.