July 17, 2024 - In late June, in Harrington v. Purdue Pharma, the United States Supreme Court ruled that non-consensual third-party releases were not authorized by the bankruptcy code and thus rejected the Purdue Chapter 11 plan of confirmation. Because non-consensual third-part release are ubiquitous in corporate bankruptcies, the decision has important ramifications for the broadly syndicated and private credit markets.
The LSTA hosted a webinar last week to discuss the Purdue decision and what it may mean for corporate restructurings. The LSTA’s Elliot Ganz moderated a panel that included Judge Craig Goldblatt of the Delaware Bankruptcy Court, Phil Anker, a partner at Wilmer Hale, and Dan Kamensky, the founder of the Creditor Rights Coalition and Adjunct Professor at NYU Stern School of Business. The panel reviewed what the decision said (and didn’t say), how it might impact not just the Purdue case but other “mass-tort” bankruptcy cases that often rely on non-consensual third-party releases, how third-party releases are typically used in corporate restructurings and how corporate restructurings might have to adjust given the inability to enact them after the Supreme Court’s decision. These questions were recently addressed by a distinguished group of bankruptcy and restructuring specialists in a symposium sponsored by the Creditor Rights Coalition, available here. A replay of the webinar is available here.
