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Oct. 14, 2024
Purdue Pharma: An Analysis of the Supreme Court Decision Barring Third-Party Releases
Business Law Today
American Bar Association
In an article published on October 11 in Business Law Today, Dylan Trache provided insight on the decision by the U.S. Supreme Court related to Purdue Pharma’s highly publicized bankruptcy plan wherein the Sackler family would pay billions in return for release of any and all claims of debtors and third parties amid litigation around opioid sales.
“A sharply divided Supreme Court in Harrington v. Purdue Pharma L.P. has barred the issuance of nonconsensual third-party releases in Chapter 11 bankruptcy plans,” explained Trache. “In a 5–4 decision, the Court held that ‘the bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seeks to discharge claims against a nondebtor without the consent of affected claimants.’”
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