Second Circuit Affirms Permissibility of Nonconsensual Third‑Party Releases in Purdue Pharma Bankruptcy Case

On May 31, 2023, Cravath prepared a memo for its clients entitled “Second Circuit Affirms Permissibility of Nonconsensual Third‑Party Releases in Purdue Pharma Bankruptcy Case.” The memo examined the significance of the U.S. Court of Appeals for the Second Circuit’s recent opinion reversing the District Court and affirming the permissibility of nonconsensual third‑party releases in bankruptcy plans under appropriate circumstances. Along with allowing the Purdue Pharma debtors to confirm their bankruptcy plan and claimants to receive payments thereunder, the decision reestablishes bankruptcy courts within the Second Circuit as potential venues for future mass tort bankruptcy filings. The memo also outlined the seven factors the Court provided to guide future courts in evaluating the propriety of granting nonconsensual third‑party releases.

Please click here to read the memo.