When the Supreme Court decided Harrington v. Purdue Pharma L.P., many assumed the era of nonconsensual third-party releases was over.[1]

That assumption is largely right in domestic Chapter 11 cases. It is wrong in Chapter 15.[2]

In Purdue, the Supreme Court held that the Bankruptcy Code does not authorize a Chapter 11 plan to release and enjoin claims against a nondebtor without the consent of affected claimants. Harrington v. Purdue Pharma L.P., 603 U.S. 204, 227 (2024). The Court reasoned that § 1123(b)(6), the Chapter 11 plan “catchall” provision, does not give bankruptcy courts the radically different power to discharge claims against nondebtors who have not themselves filed bankruptcy or subjected their assets to the bankruptcy process. Id. at 216–27. The Court emphasized that its holding was narrow: it did not decide what qualifies as a consensual release, did not address plans that fully satisfy claims against third-party nondebtors, and did not address whether substantially consummated plans could be unwound. Id. at 226–27.

But Chapter 15 is different. Within twelve months of Purdue, two bankruptcy courts — and now a district court on appeal — confirmed just how different.

Chapter 11 Confirmation vs. Chapter 15 Recognition

Chapter 11 is a domestic restructuring regime. It governs how a debtor reorganizes under U.S. law, how creditors vote, how claims are classified and treated, and what a U.S. bankruptcy court may include in a domestic plan.

Chapter 15 serves a different function. It is an ancillary framework designed to assist foreign insolvency proceedings, promote cooperation between U.S. and foreign courts, protect creditors, and foster the fair and efficient administration of cross-border insolvencies. See 11 U.S.C. § 1501(a). After recognition of a foreign main proceeding, Chapter 15 authorizes the bankruptcy court to grant “any appropriate relief” necessary to effectuate Chapter 15’s purposes, and to provide “additional assistance” to a foreign representative. 11 U.S.C. §§ 1507(a), 1521(a). The court’s discretion is bounded only by the limited categories of prohibited relief and by § 1506’s “manifestly contrary to public policy” exception — a deliberately narrow standard.

That structural difference is now the core of the post-Purdue release debate.

Crédito Real: The Delaware Test Case

In In re Crédito Real, S.A.B. de C.V., SOFOM, E.N.R., the foreign representative of one of Mexico’s largest non-bank lenders sought recognition of a Mexican concurso mercantil as a foreign main proceeding and asked the Delaware bankruptcy court to give full force and effect to a Mexican court-approved plan containing nonconsensual third-party releases. The releases shielded parties to the restructuring support agreement, the indenture trustee, former directors and officers, and other related parties. In re Crédito Real, No. 25-10208 (TMH), 2025 WL 977967 (Bankr. D. Del. Apr. 1, 2025), aff’d, No. 25-371-CFC (D. Del. Mar. 31, 2026).

The U.S. International Development Finance Corporation, a U.S. unsecured creditor, objected. It argued that Purdue foreclosed the requested relief; that recognition fell outside “any appropriate relief” under § 1521(a); and that enforcement would be “manifestly contrary” to U.S. public policy under § 1506. Judge Thomas M. Horan rejected each argument in a March 11, 2025 bench ruling, later memorialized in a written opinion. On March 31, 2026, Chief Judge Colm F. Connolly affirmed — the first appellate-level ruling holding that Purdue does not extend to Chapter 15 recognition.

The reasoning is structural. Purdue interpreted §§ 1123(b)(6) and 1141(d) — provisions that do not operate in Chapter 15. Section 1521 instead frames available relief in terms of what the foreign proceeding requires, subject to enumerated limitations that do not include third-party releases. Where Congress wanted to limit Chapter 15 relief, it did so expressly. The plain-language inference is that other relief — including foreign-approved releases — falls within the court’s discretion.

The § 1506 public policy analysis was equally decisive. The court emphasized that “manifestly contrary” is a deliberately high bar — generally requiring either fundamental procedural unfairness in the foreign proceeding or a severe impingement on a U.S. constitutional or statutory right. Neither was present: creditors had notice, the opportunity to object, voting rights, and appellate remedies in Mexico. The court also noted that Congress has itself authorized nonconsensual third-party releases in at least one context — § 524(g) asbestos channeling injunctions — making it difficult to characterize foreign-approved releases as categorically offensive to U.S. policy.

Odebrecht: SDNY Reaches the Same Result by a Slightly Different Route

Three weeks later, Chief Judge Martin Glenn of the Southern District of New York issued In re Odebrecht Engenharia e Construção S.A. — Em Recuperação Judicial, 669 B.R. 457 (Bankr. S.D.N.Y. 2025). The Brazilian recuperação judicial plan of Novonor (f/k/a Odebrecht) had been confirmed in Brazil. When the U.S. Trustee objected to enforcement of release language in the proposed Chapter 15 recognition order — language the Trustee characterized as creating nonconsensual third-party releases — Judge Glenn overruled the objection.

The case is notable because the release protection there appeared in the proposed U.S. recognition order rather than in the Brazilian plan itself. Judge Glenn rejected the distinction. The court reasoned that §§ 1507 and 1521(a) are not constrained to mirror precisely the relief granted by the foreign court; if the foreign proceeding satisfies the recognition standards and the release furthers the purposes of Chapter 15, the U.S. court may grant the relief whether the release sits in the foreign plan, the foreign order, or the U.S. recognition order. The opinion largely tracks Crédito Real’s § 1506 analysis.

Together, Crédito Real (now affirmed) and Odebrecht (not appealed) point in the same direction: Purdue stops at the Chapter 11 border. The two decisions also build on a body of pre-Purdue Chapter 15 case law that had long recognized foreign third-party releases under comity principles. See, e.g., In re Avanti Communications Group PLC, 582 B.R. 603, 618–24 (Bankr. S.D.N.Y. 2018) (enforcing non-debtor guarantor releases approved in U.K. scheme of arrangement under §§ 1507 and 1521); In re Vitro S.A.B. de C.V., 701 F.3d 1031, 1067–69 (5th Cir. 2012) (affirming denial of comity-based relief enforcing Mexican plan’s nonconsensual non-debtor guarantor releases under §§ 1507 and 1521); In re Metcalfe & Mansfield Alternative Investments, 421 B.R. 685, 696–700 (Bankr. S.D.N.Y. 2010) (recognizing Canadian CCAA plan containing third-party releases).

The Practical Implications

For cross-border restructuring professionals, this matters in several concrete ways.

First, restructuring strategy. Foreign parents and groups with material U.S. operations or assets may have a stronger incentive to restructure under foreign insolvency regimes that permit broader release relief, then seek recognition and enforcement under Chapter 15. That does not turn Chapter 15 into a release loophole — recognition will still turn on notice, fairness, creditor participation, jurisdiction, and the § 1506 public policy gatekeeper. But Crédito Real establishes that release architectures unavailable under domestic Chapter 11 may be available through foreign-court approval and Chapter 15 recognition.

Second, creditor participation. Creditors who oppose third-party releases need to fight that battle in the foreign proceeding, not at the U.S. recognition stage. A creditor that waits to make its release objection only in the Chapter 15 case will face a harder path if the foreign process provided notice, an opportunity to object, voting rights, and appellate remedies. The U.S. Trustee’s Odebrecht objection is a useful illustration: even a sophisticated objector with strong procedural arguments lost on the merits.

Third, evidentiary record-building. Debtors and foreign representatives should plan the Chapter 15 case with the recognition-and-enforcement record in mind. The salient questions are whether the foreign court approved the release; whether affected creditors had meaningful procedural protections, including voice and vote; whether the release was integral to the foreign plan rather than a bolted-on extra; and whether enforcement would actually offend a fundamental U.S. policy — not whether the release could have been ordered in a domestic Chapter 11.

The Takeaway

Purdue remains a landmark. It sharply limits the ability of domestic Chapter 11 plans to impose nonconsensual third-party releases outside the statutory framework Congress has provided.

But Purdue did not rewrite Chapter 15.

The post-Purdue lesson is that the enforceability of a third-party release may depend not only on what the release says, but on where and how it was approved. In Chapter 11, the question is whether the Bankruptcy Code authorizes the U.S. court to impose the release. In Chapter 15, the question is whether the U.S. court should recognize and enforce foreign relief as a matter of comity, fairness, and cross-border cooperation. That is a meaningful difference — and one that sophisticated parties in global restructurings are already building into their strategy.

Nelson Mullins attorneys are deeply experienced in navigating the evolving landscape of bankruptcy law — including the nuanced implications of Purdue on third-party releases and cross-border restructurings. For tailored guidance, reach out to our Bankruptcy and Financial Restructuring team at nelsonmullins.com.