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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Thursday, June 5, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00

This course is $0 with these passes:

CLE
ALL

This CLE webinar will discuss whether Harrington v. Purdue Pharma L.P., 603 U.S. 204, 144 (2024), applies only to plans of reorganization or also limits nonconsensual third-party releases from being approved in other types of settlement or sale agreements routinely approved by bankruptcy courts, and why or why not. The program will review In re Hopeman Brothers Inc. No. 24-32428 (Bankr. E.D. Va. Jan. 24, 2025), and In re Roman Catholic Diocese of Rockville Center, N.Y., No. 20-12345 (Bankr. S.D.N.Y. Dec. 4, 2024), ECF No. 3465, in which the bankruptcy courts approved nonconsensual third-party releases as part of insurer settlements with the debtors. The panel will explore arguments that the subject nonconsensual third-party releases contravened Purdue, each court's reasoning in favor of approving nonconsensual third-party releases, the key facts and competing interests that controlled or that might have changed the outcome, and how insurers and debtors might leverage the holdings and rationales in other contexts to either reanimate nonconsensual third-party releases or to show that Purdue is to be applied beyond confirmation.

Description

Although Purdue was a seminal decision that changed the benefits and mechanics of resolving litigation through bankruptcy, its scope is not unlimited. The bankruptcy courts in Hopeman Brothers and other similar cases have found Purdue inapplicable to Section 363 sales and to certain settlements approved pursuant to Bankruptcy Rule 9019, in part because Purdue appears to be at odds with Section 363's promise of a "free and clear" sale. Yet the proponents of settlements have been careful to show that the relief was narrowly tailored "to the facts presented" and a valid exercise of the debtor's business judgment.

Nonetheless, Hopeman will not be the last word. It was an asbestos case, which enjoys special status under the Bankruptcy Code, even if the transaction at issue was a standard "buy back" of insurance coverage. Courts are wary of allowing parties to bypass confirmation and achieve through a sale what they cannot get through a plan. Some courts have drawn distinctions between discharging or releasing claims of third parties and liquidation of claims, for example In re Bird Global Inc., et al., Case No. 23-20514-CLC. Whether such distinctions will withstand scrutiny is to be seen. Although Purdue did limit itself to addressing nonconsensual third-party releases through confirmation and 11 U.S.C. 1123(b)(6), different facts may well produce different results.

Listen as the experienced panel of bankruptcy lawyers unpacks just how much the parties can limit Purdue to the confirmation context and the ability of lawyers to leverage Section 363 and other types of bankruptcy relief to indirectly resurrect nonconsensual third-party releases.

Outline

I. Introduction

II. Currently prevailing rationales for limiting releases beyond confirmation

III. Currently prevailing rationales for limiting Purdue

IV. Critical facts and procedural posture of recent cases

V. Best practices for securing or limiting releases

Benefits

The panel will review these and other key issues:

  • Do decisions allowing nonconsensual third-party releases in sale orders make a distinction with a difference?
  • How broad is too broad for nonconsensual third-party releases in sale orders?
  • Will courts scrutinize releases in sale orders in light of proposed plans?
  • What happens if a creditor opts out of the plan release?