The Role of Third-Party Releases In Successful Chapter 11 Reorganizations

Part One of a Two-Part Article This two-part article will examine the role of third-party releases in successful Chapter 11 reorganizations. This part will address the factors considered in each Circuit where such releases have been deemed permissible within the confines of the Bankruptcy Code, evaluate several recent cases highlighting the uncertainty created by the current Circuit split, and consider options for creating a clear, nationwide standard.

14 minute read April 01, 2023 at 12:05 AM
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By John J. Rapisardi and Jacob T. Beiswenger
The Role of Third-Party Releases In Successful Chapter 11 Reorganizations

For nearly three decades, courts have wrestled with whether and to what extent the U.S. Bankruptcy Code authorizes non-debtor, third-party releases in a Chapter 11 plan of reorganization. The results over that time have yielded continuing confusion and uncertainty.

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